Category Archives: Uncategorized

simulation

Artificial intelligence is enjoying an overdue appreciation these days.  All of the major elements have been there for at least ten years if not longer–compute power to collect source information and to process it, and connectivity to share that source and results.  The fact that storage ability and cost have only recently caught up are more of a convenience for one particular and obvious application of AI than some critical component as I see it.  Approaches we categorize as AI have been far greater in reach and application than the bulk of us beyond those who’ve dedicated their careers to it have appreciated, and for some time.  Such is the social side of computing though.

AI isn’t the only field of computing that’s enjoying a resurgence.  The advent of affordable, high quality displays sparking new (and old) discoveries in virtual reality is a similar story. While all of the ingredients have been there to do what we’re doing now in VR for over twenty  years (in this case in a practically prepackaged form even), some key ingredients doubling as mental aids in discovery of the obvious have appeared to provide enough fuel for the required momentum.  The concept of the mainframe has endured a rebranding as all things currently ‘cloud’, and that’s a similar story–advances in handheld devices (similarly driven by display technology) and connectivity seem to have encouraged the existence of “cloud storage” and “cloud computing”.  They’ve even inspired a new-found appreciation for virtualization–yet another technology that’s been around for years.

What’s maybe the most interesting result of the popularity of AI is the idea that we’re living in a simulation.  While VR, quantum computing, and likely other subfields probably helped play a role here, today’s applications of concepts from AI might be the biggest social influence.  Enough people have seemed to envision how much possibility there is in what we call AI that the mental leap from ‘fake people’ to ‘fake world’ is now small enough to be entertained.  Of course we could have gotten there much sooner, all of the mental aids have been there for years.  Then again maybe the speed of tech is making the speed of social thinking seem slower than it would otherwise.

The almost comical discovery of previously developed approaches in computing is a recurring challenge–at least socially–for the field.  We don’t seem to be very good at identifying the current roadblocks to application of certain approaches, because if we did we’d be saying more things like “this is a great approach, and in a few years when required technology X catches up to its needs we’ll be able to tap into much more of its potential”.

That’s not the only recurring challenge, and I don’t think it’s even the most significant.  That prize goes to another.  While we tend not to truly appreciate the application of approaches when the needed resources aren’t quite there yet, when they are we almost always suffer from ‘end-all, be-all’ thinking, and in my mind that has been the single largest barrier to advancement of the field.  Any sizable leap in computing where we can immediately realize the potential is usually met with sentiment like “this is the greatest thing since sliced bread”.  We tend to greatly over-apply it to problems across computing.

I remember a lot of discussions with peers at the advent of XML where I’d stress that it’s only a loose common structured means for human expression of data, nothing else has changed…good persistent data structure organization has been around for a long time.  The sour-faced responses would make me doubt my take on it, but to drive home the danger of over-applying XML I’d usually bring up the old concept that discovering errors as early as possible in development (for ex. statically in code via compute assistance, not data) implies a cost of XML-ifying things that should make us step back and think.  I’d say “look at the extreme, us building an app that reads and executes XML logic…would you want to maintain and extend something like that for all of your processing needs?”  And still, I’d get the usual negative responses, and I’d yet again attribute them not as much to my suggested lack of intelligence (a suggestion I’ve always agreed with on the whole by the way) as to the black-and-white thinking disease that seems to plague engineering as a whole.  I might have been on to something, because the more I think about the popularity of concepts like living in a simulated world, the more I wonder if this black/white mental disease really is just confined to those of us that gravitate towards engineering.

What’s interesting here though, and it’s why I mentioned all of this dry crap that probably no one cares about, is the similarity in thinking across society as a whole as it relates to the concept that we might be living in a simulation.  As someone with some experience in that arena, I’m here to say that the seemingly profound nature of this concept might say more about us than the concept or even its implications.  The basics of the idea have been around for a long time in forms ranging from religion to philosophy to certain movies to ‘ancient aliens’.  The only thing that’s changed is that tech has advanced enough beyond very real ability to something inducing a mental spark in enough minds.  It’s now newly-fueled by the “unlikely outcomes” of the last few months too, and now you can’t get away from this gargantuan “what if”.  And for anyone with spirituality, the idea might even garner a “uhh yeah, God, hello?”.  What it yields from me is a shrug and a smile.  It’s as interesting a question now as it’s always been to me.  The possibilities don’t really change anything for me.  It says a lot more to me about our lack of desire to see the current self-imposed limits of our notion of “reality”, what we think we know, and what we let happen to us when we finally grow beyond those bounds.

As potential simulations themselves, Copernicus and Galileo might be proud that we’ve dodged a people-centric view here by this much entertaining of the idea that we’re an experiment, but they might have that same sour face I know so well when it comes to us labeling yet another new center of the universe for the next few months…or whatever our attention span has reduced to these days.  I think they like us more when we reject black-and-white thinking and other forms of limited thinking.  At least I do.

“modern economic policy” or gambling addiction?

Speaking of perceived reality, this is one that’s been brewing in drafts for a while.  Not sure there’s much more I have incentive to say, so here goes…

There’s been this running list of things I’ve wanted to get out of my head and into this thing, but one of my biggest weaknesses is being distracted by stuff that’s not important and from stuff that is.  The other excuse is spending a good amount of time oscillating between indifference and denial about news.  Indifference because it seems like there’s nothing any one of us can do.  It’s like “ok, my eyes are open…wow ok, seeing is about all that can be done?”  Denial because that conclusion doesn’t feel right.

This is what was on my mind when I started this–the ‘Brexit’.  Some of the same pitfalls in thinking patterns are in full effect, and the disparity between them and the totality of what’s going on is just mind-blowing.  When I say pitfalls, what I mean is that chronic process we tend to ignore but still tend to follow where when we hear a certain idea that connects with our belief system, we merge it in, reinforcing the system.  I think we all do it by default.  The problem is that it’s self-fulfilling, and if the belief system is sufficiently narrow versus the totality it’s aimed at then the reality that it paints–a reality that we live and so are greatly affected by–is going to be mis-representative.  That’s actually one of the things I wanted to bleed off of my mind, so I’ll leave it with this one idea.  Listening (I mean truly listening) is a good way of warding off those limiting types of thought.

There are a lot of sides to the situation, but I want to focus on just one right now–the sheer departure from reality in economic discourse.  Case in point:

http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

…by Paul Krugman, which likely explains a lot.

The entire pro-exit contingent is almost irrationally blasted here by a professional who doesn’t even understand the mix of motivations involved.  The ideology touted here shouldn’t surprise anyone, but it’s still hard to believe people take things like this out into public.

There are all of these “tools” that many economic thinkers believe were validated by the “Great Recession”/”crisis”.  Yet no one has seemed capable of explaining why spending has been in such a depressed state for such an extended period of time. There’s no research into causality to discredit here because there are no direct links beyond “this occurred within a timeline that supports correlation”. And there’s no mental room to entertain the possibility that the extended spending ‘slump’ may have been in part due to the use of the very tools many experts vehemently claim to work.

Still, the inability to identify a plausible cause is dwarfed by the mental disconnect regarding credit in all of this. When an economy tanks and credit is overextended, attempts to stimulate the economy may not only be ineffective in making a connection with spending, it may also cause even greater damage if they actually succeed. Conservative views would tend to suggest that if you are over-extended in credit that you work to pay back debt–otherwise your spending ability becomes eroded by service fees on that debt. And while modern economic policy claims to effectively foster increased spending, especially during a ‘recession’–there is no room to acknowledge a reality in which spenders are better off not only employed but using some of the resultant earnings to pay off debt instead of assuming more. There is no attempt to consider a timeline beyond the now in this mindset much less the past. And that’s a danger with these policies: they rewrite the past and fabricate a guaranteed future. Observing these signs in an actual person, many would likely suspect gambling disease. And that’s because it is.

When you hear something like this…

“It’s true that you can’t run big budget deficits for ever (although you can do it for a long time), because at some point interest payments start to swallow too large a share of the budget. But it’s foolish and destructive to worry about deficits when borrowing is very cheap and the funds you borrow would otherwise go to waste.”

…it’s hard not to hear something different: “Yes, eventually I have to address my debt (and not my underlying problem because I don’t have one), but I feel a hot streak coming…now.  No wait, it’s coming…not now, now…” etc.  And the same kind of non-logic that addicts use to justify their actions is employed.  Rates aren’t low  because people are dying to lend, it’s because policy has artificially forced them to be so.  The climate isn’t ripe for spending because people are dying to sell things, it’s artificially created by the same policy that’s being defended here.

And the reality being clutched to here is so intent on rolling the dice that they’d rather the government to spend on people’s behalf than let the ‘opportunity’ slip by.  The departure of this mindset from reality mirrors that of the financial sectors on the lead-up to 2008.  And these are our “leaders” of economic thought.

The bottom line: you cannot guarantee psychological results. This scares supporters of “modern economic policy” because they make their living on demonstrating effective economic control.  On a wider scale, this kind of thinking is extremely black and white, there is no acknowledgement of concepts outside of the realm that these instructions live within.  The people that promote this type of thought also direct the management of value earned by our society.  This is an example of the impact of closed-minded thought.

reality

This has been at the forefront of my mind for some time now.  I touched on it in the last entry–the concept of “what objectively is” and what we perceive that ‘what’ to be.  Life over the last few years has been interesting.  I’ve been lucky to have things happening in my life that seemed like tragedies at first but in time served as great encouragement to grow in new ways.  One is in the concept of perceived reality and its role in our existence.

The basic idea is about as simple as things get: what we believe to be objective reality greatly shapes where we go with our lives.  One aspect of that is learning–our notion of reality drives what we decide to learn and not learn.  Another is the impact on our experience–the notion that if someone draws from their learning a positive view then they’ll live a positive life…draw a negative one and they’ll lead a more negative life, in simple terms.  Finally, and perhaps the most profound aspect is faith: what we believe may be and how that affects our well-being and actions.

First, I want to back up and use some history to set a direction here with the major initial steps in development of western philosophy.  Yes, I mean Plato, and so then in many respects Socrates.  In school I groaned at the subject.  Nowadays I have to smile, because that groaning was an illustration of the subject matter Plato devoted a lot of time to and touched profoundly on: the idea of the “real” and the “imaginary” and their impact on us.  I’ve sectioned off this background for anyone already familiar.

Relevant Aspects of the Work of Socrates and Plato

Up until the time of Socrates, in the west there wasn’t much thought put into perception.  There’s a natural sort of reinforcing dialog between the real world and living beings interacting with it.  For example you see a fruit, pick it up, feel it in your hand, eat it, and experience consuming a fruit.  That experience serves to reinforce a notion that physical reality is an objective thing, is all that matters, and is maybe even all that ‘exists’.  It is after all a key to survival.  If you need sustenance, you use your senses and your perception of what they tell you to find and eat food.  Having eaten it, you survive another day.  You have your vision into reality and your ability to operate within it to thank.  What else matters?  What else exists?  Anthropologists might point at early nomadic life as a major influence here on the emphasis of importance on our perception of reality.  When you don’t have a means to accumulate for your needs like growing food, life is hand-to-mouth.  You put something in your hand (or skip the hand and go straight to the mouth I suppose) through interactions in the real world.  On top of that, since you have no reserves you don’t have much time to stop and think about your existence.  As a result, that existence may be primarily defined by the real world.  (And the parallel with modern life and what we must/may spend time doing is an interesting one, although that’s maybe a separate subject.)

In the west, as I understand it, life in Greece seemed to experience an explosion of personal growth in comparison to life before.  Pythagoras, Socrates, Plato, Aristotle, and other wonderful thinkers provided a means to explore thought in ways that have endured our existence for centuries.  Pythagoras and his ‘crew’ quickly discovered one aspect of the beauty of mathematics (to put it one way).  Discovering some of what mathematics says about the physical world compelled him and his peers to celebrate and expound on the philosophical and to an extent the religious impact.

Socrates recognized the value of abstract thought as illustrated by mathematics, and one main concept he promoted in response was the value of thought focused on subjects not directly tied to physical reality.  He devoted great energy to both evolving this ‘abstract thought’ and promoting its value.  Interestingly enough, he believed this growth in thought and understanding to be granted solely by the Gods in the form of awakening preexisting memory of it in us.  That may have just been his unconscious way of being thankful for being able to find answers within himself, but the idea that we have all the answers within ourselves is an enthralling idea in itself.  It’s a big reason why I’m writing this too.

While Socrates focused on abstract thought  for its own virtue, Plato seemed more preoccupied with the relation between thought about the real world and thought focused on abstract concepts.  The majority of his primary work in The Republic seems devoted to this.  Influenced by Socrates, he acknowledged first the aspects of our physical experience that give clues that can aid in learning and understanding in general (The Analogy of the Sun).  This concept highlighted the transformation from observation to understanding, and it led to the contrast between the ‘real’ and the ‘abstract’ that Plato was focusing on at the prompting of Socrates’ work.  There was a big difference in Plato’s eyes between the influence of the real world on thought and the influence of abstract concepts on thought.  The motivation reveals itself later in The Republic, but it is a profound observation in a world so previously (and still?) focused on ‘the real world’.

Plato dissected thought using this idea in the Analogy of the Divided Line.  Here he accomplished two main things–he categorized the spectrum of “knowledge” (provable conjecture about the nature of things) into four groups, and he assigned a relative importance to those groups.  The smallest group is what we know of the real world through our senses: our reception of physical light, sound, smell, taste along with our resulting mental model of the world assembled from this input.  This is our ‘knowledge’ of the physical world, and more specifically what we believe the physical world to be.  The second group of knowledge (twice as large or important as the first) is knowledge of the actual physical world itself, our objective understanding of physical reality.  The natural sciences are placed into this realm: science senses and gathers clues about the physical world and uses this data to build objective understanding of it.  This is only knowledge of our physical world as it can be empirically determined regardless of our observation.  Equally large as this is the third body of knowledge: knowledge of abstract observation.  Mathematics is the inspiration here, primarily geometry for its application to physical reality.  Exploring the nature of a circle is an example of abstract exploration.  While there are examples of circles in the physical world, there is a lot to explore with respect to the abstract concept of a circle, divorced from concerns of physical reality.  The final group of knowledge–twice as large or important as the third group–is the result of using abstract exploration to discover abstract universal “truths” or what would become “First Principles”.  This is the holy grail of knowledge in the eyes of at least Socrates.

With the Analogy of the Divided Line, Plato seemed to draw a parallel between the first two groups of ‘knowledge’ and the last two.  Perception of the physical world (the first group) helps drive and direct the development of an objective understanding of it (the second group).  Similarly, perception of the non-physical or abstract (the third group) helps direct the pursuit of objective understanding of it (the fourth) as well.  As with Socrates, Plato placed a greater importance on abstract knowledge than on knowledge of physical reality.

Another significant message in The Republic is an illustration of the impact of vision on knowledge in the Allegory of the Cave.  Plato was in my opinion brilliant in at least one way–he observed and recognized the impact of vision and perception on understanding and knowledge.  He recognized this despite the driving and directing influence of vision and perception on discovery and understanding.  The Allegory of the Cave focuses on the physical world in its analogy although it also applies to concept thought.  For anyone unfamiliar, people in the analogy are restrained in a cave where the only entrance is covered by a sheet.  Behind the sheet is a space occupied by objects and people, with a light source in a fire behind them.  The light casts their shadows onto the sheet, and those restrained in the cave see only shadow projections of the objects and people on the other side.  With no other source of perception available, these people may firmly believe that the objective world consists of two dimensional shapes of various shades of black on a two dimensional surface.

The Allegory of the Cave illustrates multiple notable aspects of thought.  A central aspect is of course the idea that while perception may inspire and influence the pursuit of knowledge, in and of itself it sheds only a subjective light on the empirically or logically provable.  Another limiting aspect to perception is that knowledge and understanding of the physical world is greatly impacted by what is available to perceive of it.  In addition, as it applies to what Socrates and Plato believed to be important, knowledge of the abstract is also constrained by what is made available to perceive it.  However, in the eyes of Socrates and Plato, the key to the ‘science’ of abstract discovery is philosophy.  Philosophy in this way can provide a means to discover, understand, and know abstract concepts through the empirical means of logic (ex. mathematics).  They describe philosophy as akin to becoming unrestrained in the cave and seeing behind the sheet, in essence loosening the moors of perceivable reality on thought.

Socrates and Plato were focused on a specific type of abstract thought: discovery of “truths” obtained through the use of logic.  There are of course other types.  Much (all?) of it can be categorized into the provable (but not connected to a body of known truth) and un-provable (opinion).  There is an inherent risk though in not acknowledging this type of abstract thought within the context of a greater whole.  The ‘types’ of abstract thought in ways defy finite categorization.  Some of this sea of thought has been explored in the time since, even within the realm of philosophy, but much has seemingly existed in a context limited by previous work.  This is at least understandable.  With us programmed to survive in a physical world, when you first start thinking about thought, physical reality might naturally be a main theme having a large influence on thinking.  Constructs like mathematics might also be attractive for being both abstract and having easily observed application to the real world.  With religion also being a constant theme in society, a hard line can naturally be drawn between logic and that which logic cannot seemingly apply to. It was likely natural for philosophers of the time to focus on logic as opposed to other types of abstract thought.

Recorded Eastern thought has parallels with respect to treatment of physical reality.  Buddhism in ways views all value placed on the physical as a distraction from growth, and Taoism in ways embraces the beauty of the physical and the ‘distractions’ it represents.  Both are bodies of thought where physical reality is a main focus.  At the same time, these bodies of thought represent a different type of goal than what Socrates and Plato were aiming for.  Greek philosophy focused on the goal of knowledge about logical truth through reasoning.  Chinese philosophy focused more on the goal of knowledge about existence and contentment.  Rooted in a much different past, this type of thought can explore the unknown in unique ways.

Stepping back from these, there are some commonalities shared by all forms of thought where the goal is understanding.  One is the accumulation of stimuli related to the subject to be understood.  Stimuli fuel observation, another commonality.  Much like the scientific method, observation feeds many things, one being conjecture or theorizing.  Observation also assists in testing theory, discarding that which is not supported by observation and bolstering that which is.  Theory bolstered adequately can be categorized tentatively as “truth”, regardless of the subject matter.  Related truths can be used to build a picture of the subject to be understood.  This picture can be thought of as a “model” of the subject.  Sufficiently developed, this model can be thought of as a reality in itself.  This is empiricism used to grow knowledge.  At the same time, this method of accumulating a coherent body of knowledge also mimics methods of human understanding, which makes it a method with a natural fit for human thought in general.

While the scientific method provides one formalization of it, we build models constantly while learning new subjects.  We seek out relevant stimuli about an unknown subject, we collect and observe, we conjecture, test, and build models of the subject.  There’s a danger that some new as-yet undiscovered observation may invalidate the entire model, but a useful model helps discover these types of observation and can at least serve to eliminate possibilities within the search space being analyzed.  There is also the danger as Plato demonstrated that a model may not represent the subject accurately, but being built from attainable observation and proof/disproof, the model may focus on that aspect of the subject that is able to be interacted with, which may have value in itself.  If the model is advanced sufficiently it may also aid in refining itself and subsequently understanding.

Here is how fundamental this concept of model building is: I believe that humans not only build mental models to form comprehension of subject matter, I believe those models which serve us well are integrated as much as we can mentally manage into a single core model that envelops everything we understand into a single whole.  Sometimes this is easy because one model may contain enough surrounding context to fit within an overarching context of a larger whole.

Sometimes this is hard, especially when there are sufficient gaps between models.  My understanding is by definition limited, and this belief may just be a product of who I am.  On the other hand, having a single model helps reduce the strain on memory.  I forget a lot.  I forget very little of what I fully understand within an understood context.

We constantly build models about aspects of the physical world with which we can interact.  They allow us to operate within it in a semi-intelligible way.  With great work by people like Donald Hoffman, we are finally exploring how this furious model-building relates to its subject.  With similarly great work, famous people like Elon Musk question what the observable, ‘interact-able’ physical world really is and whether there is an agent or agents behind it.

Right now is a great time for thought and understanding.  An aspect of it that has me currently consumed is the impact of thought on sentience, specifically the impact of mental models on our notion of reality.  Because as there are different kinds of abstract thought, those different kinds of abstract thought provide the possibility of infinite kinds of models or “realities”, where a reality can be thought of as the experience of employing a model of an unknown but observable subject.

With that, I want to shift a little (okay maybe a lot) to what I promise are related aspects of psychology.  It’s been observed that children have greatly accelerated mental growth that parallels their physical growth.  Children can learn at a faster rate than their older selves for various reasons.  It’s also been observed that stimuli and observation greatly shape a child’s growth (a great argument for good parenting) in comparison to stimuli and observation experienced later in life.  Nature or nurture, there also seems to be an innate aspect to someone born, whether it’s a product of genes or other factors, that also greatly shapes a child’s growth.  I want to take this observation about adolescent growth further.  I believe we as children form a notion of reality–both physical and non-physical–that sticks with us throughout our lives more permanently than any other age.  That reality is developed and partially ‘hardened’ by the time adulthood is reached.

That model of reality drives–practically defines–what we actually experience.  For example, a child who for various reasons forms a liking for extroversion may experience a social setting as inviting, whereas a child who prefers introversion may experience the same social setting as uninviting.  While that may seem obvious, think about an example where you experienced both settings.  How much do you think your notion of reality influenced how you experienced the setting?  How much do you think your notion of reality was influenced by what you believed to be the *factual* aspects of the setting?  This is key, because we often mistake our experience for factual reality.  It happens much more often than we are willing to think.  It happens on a constant basis.  Maybe it’s influenced by our physical survival programming.  Maybe it’s also influenced by our spiritual survival programming.

All understanding is of course constrained.  A major source of constraint is what’s available to sense.  In terms of physical reality, sensing more of the world in various ways increases availability of information to sense and absorb.  In terms of logical knowledge, building tools to aid in sensing and exploring abstract logical concepts helps increase availability of information to absorb.  In terms of personal contentment, reflection and meditation are similar tools in exposing the self to itself, observing existence and experience, and drawing conclusions about them.  While these non-physical journeys of thought may be less constrained by availability of information than understanding the physical world is, they’re still greatly constrained in terms of generation of stimuli to fuel observation and conjecture.  The tools used to explore thought and even the overall model of existing knowledge that we build upon about those subjects constrain this type of exploration.

That’s worth dwelling on I think.  Acknowledging our limited awareness, our limited experience can serve not only to humble us but encourage us to action.  We often accept certain suppositions as aspects of immutable fact or objective reality, and we even at times value the acceptance of those things and the ability to be at peace with them.  The problem is that this limits our ability to grow our understanding.

This not only affects our growth individually, it affects our growth as a society.  The impact can be easily seen by the state of our world today.  We are in so many ways diametrically opposed in belief to one another.  This serves to discourage understanding of what others experience.  This suppresses empathy.  It divides us.  It does not have to, but preventing it at least requires acceptance of our limitations.  None of us have “all the answers”.  Anymore, I tend to believe that each of us barely has answers for ourselves.  While that may seem bleak, I see it as incentive to be open to growth individually and socially.  More on this later, but we each (and all together) have a lot to gain.

subsequent topics for later:

  • more on the notion that philosophy focuses on understanding concepts, while there is the emotional side to existence as well
  • the role of the subconscious, both in terms of thought and feeling
  • the impact of perceived reality on our faith and well-being
  • dialectic method: its power; contrast to the power of more than two views personified

economics: “why care?”

I’ve had a lot on my mind since the last, I’ll try to get some of it down here, and I’ll try to revisit stuff I just touched on earlier.

Something that someone said last week stuck with me.  A handful of coworkers and I were in a car heading out to lunch, a rare event for us, or at least me.  On the way, we were talking about the bleak outlook of presidential candidates.  My mind jumped to the seemingly inevitable effect on the economy, and I mentioned something about the mental state of economics society today.  Someone in the car immediately interrupted me with “you sound like you care, why care?”.  He sounded aggravated that I was “taking everything so seriously”.  Since I tend to do that, I replied “eh, maybe you’re right”, laughed it all off, and let the conversation wander to the normal fluffy topics those kind tend to do.  It hasn’t sat well with me I guess, because this morning I was mulling back over the conversation again for the second or third time.  Only this time I consciously noticed what I was doing.

One change I’ve put into my life in the last year has been to practice what I preach with regards to transparency: transparency with the self.  I’ve been digging deeper into myself–into less-than-conscious places we normally don’t dig into–to try to surface things that concern me on deeper levels that I don’t normally think about.  The result has been surprisingly nice.  I feel a little less mentally “backed up”, a little less deeply concerned over things in a resolution-less way, and more…a little more content I guess you can say.  Another nice side effect is that I’m tending to act less on ‘unprocessed’ emotion, something we seem to do on a daily basis that isn’t so healthy(!).

I think that’s why I caught myself dwelling on that car conversation.  What was bothering me about it is that my work friend seemed to be expressing apathy over the situation, a feeling that’s been a major reason why I stopped doing this, writing down thoughts.  And more than that, the message he conveyed was “I’ve given up, you haven’t, and you should, so shame on you”.  This election season has been an excuse for me to address my apathy over our condition (a result of confirming that yes things appear to be in as poor order as they smell) and at least try to do something positive, be a positive influence on the situation, divorced from expected outcome.  I’ve been spending more time mulling over “best candidates” regardless of overall quality as opposed to deciding not to vote in apathetic protest like some friends are planning to do.  I still don’t know what my lunch friend plans to do, but I hope he decides to do something.  And I hope he decides to change his view on leadership, since it also sounds like his new philosophy has taken on that narrow, stubborn tint political views tend to take in us.

Before he stopped me, I had been trying to talk about the apparent social trend in economics professional circles, and I was leading into how the next president may likely promote more of the current trend.  That trend seems to be more towards the irrational, gambling side of economic policy and less towards the fiscally responsible side.  Socially, there seems to be more agreement in the last few years over conclusions that seem to defy basic concepts of economics.  These are professionals mind you, people that have devoted their education and profession to the field…people that have allowed themselves to be exposed to a large portion of the vast field of observation in economics, a field with now hundreds of years of history to mature out of adolescence.

Here’s one example of the trend.  The Economist published a piece a few years ago titled ‘The death of inflation’.  It should still be out there, although it might require membership with the publication tightening its reigns on public access.  The article talked about how given what we know from inflation in the 1970s we should be seeing deflation today.  What they observed about the 70s was that as unemployment rose near the end and into the early 80s, labor began to accept wage cuts to get and keep work, and so business felt safe to drop prices in order to stimulate demand (the idea being that they could afford to drop prices if their labor costs were to decrease).  However, in the late 2000s as unemployment rose, competition for jobs increased, and labor accepted lower pay, business did not cut prices and inflation did not change pace.  The article concluded that because economic policy was so effective in ending the inflation of the 70s, people began gaining confidence in *economic policy itself* or at least in resultant economic trends, and that inflation has become “decoupled” from the factors we thought it was tied to.  While the IMF is cited as the core seed of this belief, it’s obvious that the article author agreed, and it’s obvious that socially the idea has since taken hold in economics circles.

Of course factors well outside of the discussion were not mentioned (and likely never considered): the fact that at the same time inflation wasn’t changing, the administration and Congress were erasing debt incurred by business and the Fed was pumping new money at a record pace into banks for borrowing, all while making up excuses as to why it wasn’t leading to more employment.  Economic policy leaders in America never seemed to understand that business won’t budge from their contraction in a climate where their balance sheets aren’t currently compelling them to and they *expect* both demand to decrease and overall outlook to become more grim.  After all, everyone has access to unemployment figures, and if that isn’t an indicator of future demand then who knows what is.  Some economists, notably the most visible, stopped just short of throwing a tantrum and flat out encouraged people to just spend as a solution, disregarding all aspects of the current climate.

Instead of acknowledging that giving business money and pumping money into the economy is an incentive for business to not drop prices even in a depressed climate, a popular conclusion by economists has been that since unemployment is high and deflation hasn’t occurred that inflation no longer exists.  It’s been like this social bow wave of disassociation from basic economic tenets has swept over us.

Here is a basic truth of trade: any time a currency of an overall non-constant amount is used to exchange value, currency equilibrium vs value is disturbed and inflation/deflation is possible.

A most elementary tenet of trade, an obvious conclusion of logic, was being wholly dismissed by the majority of economists while they either failed or refused to acknowledge the consequence of current economic policy.  These are people with PhDs.

While debt continues to increase and economic policy continues to prolong economic reaction to the last bubble, other bubble potentials increase.  Meanwhile, popular economic thought has continued to disassociate from basic aspects of reality.  Paul Krugman himself just released a piece in The Guardian in response to the Brexit claiming that austerity doesn’t work.  He reasoned that every economy that enacted austerity as a policy has suffered since, and that all research showing that austerity was a positive influence on economic recovery has been proven false.  One of our most notable economists actually cited economic figures of only the last ten years to back a belief about the current condition of an economy that has been subjected to adverse policy for over thirty.  That type of thinking is…less than scientific at least.  What’s worse, he observes the current record levels of debt and spending and advocates more of the same as the obvious solution.  There is no room in this mindset for acknowledging the natural reaction of business to recent economic policy, the resultant lack of employment, the natural reaction of labor to their own losses, and the gamble he and others advocate as the solution.  The linchpin in all of this is the stubborn refusal to acknowledge that psychology–a major driving force of economic behavior–cannot be controlled by policy.  The simpleness of this observation apparently eludes our most respected economists.

In a climate of currency divorced from value, debt climbing to record levels, economic damage to the populace at immeasurable levels, and even investment in business decoupling from rationality, we are advocating more spending.  This is the best advice our economics leaders can muster.  And when you look at our presidential candidates, none seem to exhibit a better insight into economics.

Back to the original question: why care?  Well, anyone that doesn’t want to possess value with which to exchange for things like food and water into the future probably has no reason to.

 

some things getting the ole mull-over

Just a quick rundown of some stuff I’m mulling over and plan to dive into later:

  • Power and history: As an insight into my twisted way of thinking, history as both archaeology and a traditional science fueled by things like statistics has shown me great connections to the human condition and our lives.  Whereas in school I could never connect with history as a subject, nowadays I see great application.  In parallel I’ve followed ideas about exploitation by compromised leadership to socio-economic concepts like free markets and peaceful anarchy, mixed economies, mixed social organization approaches, and more communal concepts.  I’ve compared and contrasted these ideas with history, and I want to get some things that have resulted mentally for me out.  I gotta take a mind restroom break, I’m crossing my mental legs here.
  • Evolution of labor specialization vs current monetary policy goals: labor has evolved over time from effort directly exerted to support core life needs to greatly specialized effort sold as service value that requires increased social bonding.  I want to explore that along with some trends in the big picture that might be related in ‘interesting’ ways.
  • Exploring potential limitations/risks of ‘fully free’ markets: there’s been a lot of possibly narrow thought and talk lately about the concept of ‘fully free’ markets (along w/pros/cons vs other approaches).  History might have something subjectively/objectively/statistically to say about human tendencies regarding that.  Philosophy might even be worth looking at too.
  • DIY awareness: I will not lie, I am all about power to the people (confession–romantically so).  I want to capture my own motivations and approaches towards do-it-yourself growth in self awareness through learning, logic, and independent thought.  This is where I try to give back in my own feeble way.  It’s in accord with my ability, so don’t laugh at my present being small and ratty and not forced by social convention.  I’ll probably start by looking at disciplines built on growth of bodies of understanding (ex. sciences like physics, astronomy/astrophysics, sociology/anthropology, economics, etc).  Next I want to go over some great ways to apply related approaches to self awareness.  I’ll want to wrap up with some thoughts about what creating self awareness can do for us beyond putting some of us to sleep and keeping some of us up all night.
  • Survey of significant thought and work to date on labor: I want to really try to dig in with a fully exhaustive look around at what’s been done for labor to date.  I have what feels like a serviceable understanding already of prominent contributors across the spectrum, but this might sit on the back burner a little as I do some more “exercise for the reader” kind of stuff in the background.  It’s a keen humanitarian interest for me with some seriously wide/deep space.

addressing effects, not causes

There’s an article today about Ron Unz, a “silicon valley millionaire” that appears to blur the line between conservative and progressive thinking in leadership ( http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2014-01-12-Millionaire-Minimum%20Wage/id-cf7a4805024a41a5bc8f915c2c4cd689 ). He’s called a wildcard and other things. In this article, he talks about wanting to increase minimum wage. It caught my eye because you don’t often see people resisting prescribed patterns of political thought. It also left me wanting, because while he may be an example of that, there’s something critical still missing.

It’s something I’m seeing a lot of over the past few years–convictions that don’t match the true reality of things, convictions that if blended with that reality might change to other convictions. This example and wage policy in general is as good a topic as any to illustrate. Before I start here, it’s probably a good idea to mention that I am going to be the last person to fail to acknowledge our systemic financial problems. This financial crisis has made reality in this country painfully obvious to me: the power-enabled few are running up a tab, the many are paying the tab in various forms of expense, and most don’t seem to understand who the few really are, what they’re doing, or how.

Wage Control as Policy: Addressing Effects, and Ineffectively

The problem inherent in wage policy is that pay is low for reasons that wage policy seems ultimately unable to fix, and I think at least some of us acknowledge that concept. Worse, wage policy in the long term only seems to perpetuate the need for more wage policy. I’d think a “lone wolf” would have a better chance of understanding that, but maybe that’s a bridge too far right now.

The reason that minimum wage can’t fix the problem is that the problem isn’t wage in itself. The problem is accessibility to compensation comparable to both willing effort and core needs. That sounds like double-speak, I know, but it’s not when you look at the big picture.

One aspect relates to the nature of commerce. A business forced to pay more for an employee’s service than it believes that service is worth (in terms of return on investment) is most likely going to take action to address that gap. Business that remains in the form of business is not in the business of withstanding cost it can possibly address, especially obvious costs like wage control. It’s the nature of business, especially business today (which could be another topic in itself). Further, action a business takes in response to new cost is not likely to involve simply absorbing it in a way that impacts profit if there are “better alternatives”.  Cost reduction options beyond absorbing cost include exerting effort to streamline processes, reducing hours worked per employee by spreading hours across more employees (sometimes even just to dodge benefits), hiring fewer employees, raising prices, increasing labor output, and geographic placement of production (among other options that don’t seem to change the picture substantially here).

Some of those options are more feasible than others. For example, business is usually pretty keen to how much they can charge for their products/services to achieve the maximum profit their market will sustain. Charge more and sales will ultimately go down. Charge less and if cost is held constant they’re leaving profit on the table. There’s usually a little room to move, but not much compared to other options. As far as streamlining processes, it’s a diminishing returns game with not a large amount of room to begin with for many businesses. For businesses with mechanical, easy to model, and easy to measure processes, streamlining them is not only easier to reap large benefit from, it’s often a critical aspect of success. For others, there’s a certain amount that can be done, and the rest is a game of diminishing returns. So among primary options, reducing employee costs is usually one of the easier means of addressing cost.

Minimally, there are too many other attractive options to business in reaction to wage control than simply absorbing cost. This leads to…loss of wage control. Normally, it’s actually labor that winds up bearing more burden.

The financial crisis is a perfect example of this. People that have lost jobs are still having a hard time finding jobs because businesses are still not hiring out of speculative fear. At the same time, businesses are both stockpiling for worse conditions and trying to squeeze more out of their employees. People with jobs likely fear losing them, businesses know this, and so they add increased employee output per labor unit to their stockpiling (like other animals do for winter). How many of us see the spike in coworkers all around us being “let go” and then our job titles/duties change (widen) to fill the gap created by their departure?

To see the problem I’m getting at, compare a business’s difficulty in increasing its efficiency through process streamlining to simply increasing employee output through expanding employee responsibility. Businesses that are competitive usually already have efficiency in place as normal, relatively successful business operation. Further increasing process efficiency in order to recoup costs for use elsewhere is once again a diminishing returns game. In an economic climate where employment is at a premium, how much easier is it for a business to leverage that advantage by simply requiring more output from its employees?

It’s kind of ironic comparing the difficulty of streamlining process to “streamlining employed labor” like this when you think of what most of us experience in the labor pool, and it has something to do with a business’s apparent perception. Companies that don’t depend heavily on process efficiency for various reasons routinely adopt and preserve extremely wasteful aspects of their processes while at the same time squeezing the absolute most that they think they can out of their employees. Even more ironic is how businesses often address waste in their processes…by adding responsibility to labor specifically to recover efficiency from that waste. The joke gets arguably funnier when you look at the lemming groupthink between many large (ex. Fortune 500) companies regarding how they value their employees, some even in the tech sector.

As a side note, some people imagine the impact of the continual “streamlining” of labor output on average daily life for labor, although extreme views usually discount the fact that in all climates society still consumes and that many in the labor pool choose vocations tied to commerce only on the volatile, outer edge of consumption. I’m not going to stray too far from things here, the influence on that picture by social and economic constructs that influence the amount and range of that consumption is a whole other topic (and a good one).

While the things that business does that reduce benefit for employees may seem inhumane, when you look at a dynamic system like ours that for various reasons has large swings in cycles of activity (and there are reasons for that having more to do with policy than ownership of means of production) those actions can compare as pretty lean strategy among the spectrum of all possible. When it comes to a system as deep and dynamic as ours, lean is good, it promotes things like fast corrections to external stimuli. Waste is bad, for one it’s usually borne on the shoulders of those that can’t dodge it.

With that in mind, artificially raising wage through wage control not only introduces a distortion of the system as it was, the response tends to pass the cost on, and usually in part to the same people that wage control was meant to benefit. There are studies that attempt to contradict this, but in every single case they fail to account for third and higher order effects that drastically change the picture. These kinds of effects are an inherent and significant part of a system like ours, so studies that don’t take them into account are hard to give credibility to. Personally I attribute this absence to convictions having more influence than analytical methods.

For example, the overwhelming majority of minimum wage studies focus primarily on the impact of wage control on employment levels. The obvious problem with this is that adverse response doesn’t even have to take the form of reduced employment levels in order to cause damage. A resultant increased cost of living alone is enough to completely neutralize desired effects, render the investment in wage control application greater than returns, and even lead to more cost due to effects of the distortion. Even worse, some studies actually acknowledge price increases as a major business reaction and consider it a favorable outcome because employment levels statistically did not change during the period of study. That of course implies that it doesn’t matter where the cost of wage control goes, even if the cost goes right back to those ‘benefiting’ from wage control.

Here’s another example where shortsightedness reigns and actual outcomes run counter to intent. Ron proposes that wage increases in one sector won’t lead to fewer jobs in that sector because labor can’t easily be replaced with other means of production. He suggests that business can’t also find geographic relief because labor-intensive aspects of production have to occur close to where either required resources exist or where final products/services are provided (ex. agricultural, service-centered sectors). For one, the idea that agriculture has few labor options involving geographic relief is a little short-sighted. I grew up in a region heavily populated at any time by people providing migrant farm labor, much of which may not even have been above the table, and there are no borders to be found anywhere near there that might have been a geographic influence on that. On top of that, automation was transferring a lot of labor needs to other aspects of agriculture besides crop cultivation. Still, service-intensive business (ex. restaurants) is a clear-cut enough example. The problem there (as in other labor sectors) is shared across most ideas related to wage control–there’s no acknowledgement of the common sense realization that cost has to go somewhere, it doesn’t just disappear. In cases like that either businesses deal with the cost internally or pass the cost on through pricing to other places. It’s at least absurd to claim that this passing of cost is controlled.

Another perfect example of this short-sightedness is his mention of Wal-Mart. Force a wage increase on Wal-Mart for its employees, acknowledge that the cost has to go somewhere, and look where it’s likely to go. What is one of the most inexpensive forms of access to a variety of goods? Wal-Mart. If Wal-Mart reacts to forced wage control solely by raising its prices (which Ron actually suggests) then sure, there may be only a 1% increase in Wal-Mart’s prices, but many of its consumers are…people working at Wal-Mart (who likely have second and third jobs on top of it). What does that do to their wage increase? It definitely doesn’t preserve it. Do you think that cost is going to be spread out in a controlled manner exclusively beyond Wal-Mart employees to people that can actually withstand it, even through the chain of subsequent affected transactions passing aspects of that cost further on? Is someone that can afford to pay a little more going to go to Wal-Mart often, when there are alternatives like Target? And it’s easy to do math and say “hey, you have a 10% increase in wage but only a 1% increase in cost for 30% of your total expenditures, that’s great!”. Except that doesn’t account for how much their other costs are similarly affected by the same policy, and it doesn’t account for the fact that price increases are not the only result of wage control. Wage control applied to grocery stores alone can have an impact on costs for these same employees. They can also likely look forward to more employer pressure to increase their output at work and reduced benefits as well. When you see the picture in totality, it’s at least not clear that wage control is helping, and it’s definitely clear that it isn’t helping in the way it was intended.

Another angle worth looking at is the long term effects of a single wage increase compared to initial “sticker shock”. The longer time goes by after a given wage increase, the idea is that business would shift from reacting to the immediate “sticker shock” of a wage increase to a different kind of reaction–one that treats wage as an unavoidable form of labor cost with no consideration of the source. This assumes that none of the realization that occurs to a business due to an immediate wage increase occurs after a certain amount of time after an increase. That is a huge assumption, because business that employs labor near minimum wage is painfully aware of the value versus cost of labor regardless of when changes in wage are enacted. Still, assuming that is the case, employee cost is still higher than a value closer to equilibrium. Even assuming that enough business just treats employee wage as necessary cost, this still doesn’t insulate overpriced labor from cost-cutting measures. When the ratio of liabilities to assets exceeds a desired amount (and this is most definitely not limited to ratios of 1 or more), businesses that want to survive start cutting cost. The first thing to go under the axe due to cost-cutting measures are “low-hanging fruit”–things with the highest combination of cost savings and ease of implementing. To assume that employee cost isn’t evaluated in these cases is a departure from reality: employee cost is evaluated at regular intervals, as someone experiencing anything ranging from performance evaluation to layoff periods can tell you. On top of this, as the amplitude of cycles in our cyclical system shows (and counter to advertised benefits of policy) you can estimate a climate conducive to cost-cutting as roughly occurring one half of the time.  So in general you can expect employee costs to be under scrutiny 1) to varying degrees continuously, and 2) to heightened degrees roughly one half of the time. In a wage control scenario you can expect even higher levels of scrutiny across the board. If that wasn’t enough, all of this is a best-case scenario. We’ve become very accustomed to business sentiment similar to profit at any cost, which leads to action with regards to employees in line with that sentiment.

In a perfect world, wage control would see wage increases result in cost increases only for “those that can afford it”. The optimal outcome from this perspective would likely be business directly deducting it from their profit margin to whatever extent possible.  This of course occurs to some degree in business voluntarily (ie. not through wage control mandate) because it can be extremely smart business strategy, although it’s one end of a spectrum ranging from smartly valuing employees to various forms of “charity” (unidentified waste). The problem is that impacts like this to profit aren’t usually incurred. Business is programmed to maximize profit. A significant amount of cost is going to be transferred out of the immediate vicinity of a business’s books to somewhere else, often to its employees. For sustainable businesses transferring cost externally beyond that, that means consumers.

The next most optimal outcome is probably where cost is transferred to consumers but exclusively absorbed by those that can more easily absorb the cost compared to those that are receiving direct wage control benefit.  If that doesn’t occur, a likely next best scenario is the cost transferred at least in major part away from those that wage policy is directly trying to aid. In that case consumers simply absorb the cost as a collective group through a spreading web of value transfer.

Reality of course doesn’t exactly match these scenarios involving benefit exceeding drawbacks though. People with more wealth have more options as consumers, many of which don’t involve giving business to minimum wage markets, at least not directly. People with less wealth have fewer options, and for core needs if the cost of living goes up their purchase power of course goes down, and the intended benefits of wage control are reduced. This leads to net results that run counter to intent. It’s one of the reasons (and whew there are others) we keep coming back to the same question: raise minimum wage again? Ironically, wage increase exerted across the board of all wage would have an effect closer to intent, although one of the other problems of wage control in that case becomes obvious: wage control tempts cost of living increases and money losing meaning (inflation). Again, studies have been conducted here, but as with many fields of study there’s a failure to account for the totality of the picture, so much so that understanding of the subject is called into question, at least by me.

Let me drive that particular point home, please. There are economists numbered by the dozens if not by 3 digits–some with full PhDs (a few even with Nobel awards in economics) actively contributing to the body of economic knowledge in the field–who fully back wage control yet completely fail to recognize or acknowledge impacts as simple as cost of living. To compare, I got a C+ in Macroeconomics 101. Granted I was not applying myself (neither I nor my teacher tied ideas to things that I was passionate about at the time), but hopefully this says something about the value of both earned degrees and large portions of the body of work in economics. And yes, this most certainly occurs in other fields, especially mine.

People that believe in and apply wage control in systems similar to ours (and there are many) consistently fail to recognize these nth order effects that run counter to intent. The existence of “nth order effects” is a dominant, primary characteristic of these systems–systems that employ wide-scale trade of value in various forms (ex. most if not all major economic systems throughout the world). Many of these effects are common sense–give someone something within a system designed for balance and which tracks such things, and someone else has to shoulder the burden. People draw value judgements at times in situations like this and call it morally justified depending on who has to shoulder the burden, yet they lack the understanding required to even make educated decisions based on those value judgements. When people fail to this degree in understanding how our system works in relation to real people and real lives, it should be obvious that applying policy based on it is at least ill-advised. More importantly, it illustrates a failure to understand why people appear to be in need of wage help in the first place.

Long story short, if you want efficiency in production you can’t have your cake and eat it too to the degree that policies like wage control (especially “minimum wage” concepts) depend on.

Core Causes

Things begin to look even grimmer when you look deeper and begin to realize the core causes that lead people to call for wage policy to begin with–people having significantly low access to the system. There’s one significant economic reason for this (among many others): massive transfers of value directly away from them and from others in their economic vicinity (which has a collateral effect). Due to the inherent nature of the system (some of the same nature that renders wage control ineffective), massive transfers of a magnitude like this require that little comparable equality of value be involved in those transfers…in other words, it requires people cheating (fraud) or altering the rules of the system (creating unbalanced risk) to maximize concentrated wealth or power (personal power or to an immediate vicinity). This causes huge distortions in the system, with cause and effect relationships that greatly benefit those with certain key types of access to the system and greatly harm those without. Worse, the harm increases greatly as someone’s financial stability and access to the system (in order to recoup finance) goes down…at least until the point of government assistance. The ‘web’ of a system like this has these types of cause and effect.

The current financial crisis has made the situation obvious. When you look at the factors leading up to it, they’re similar to ones leading up to previous crises. They primarily have to do with collusion between key members of government and business circumventing both rules for government intended to prevent concentration of power and rules for business to prevent adverse damage to the benefits of market freedom for the people. From a big picture standpoint, collusion created unbalanced risk leading to a bubble, it burst, and everyone lost. Except those people who had the least to do with the causes shouldered the most severe damage in terms of cost versus their financial situation.

As one example of the form that mass transfers of value (distortions of the system) takes, in order to maximize re-electability elected leaders have routinely broken the law by not just consulting with monetary policy makers (which by itself is against the law) but in a deliberate manner with the goal of changing the nature of financial law and regulation in order to affect increased stimulation of markets. The motive for a leader in government is that if times are good (through successful market stimulation) and person X is elected, then person X looks very good in terms of continued electability. One result is “often” excess stimulation (what people call bubbles). Bubbles tend to burst, leading to massive transfers of value that often hit people harder when they have less ability to weather financial storms harder. Their welfare condition is significantly worse (often risking access to core needs for survival), and their ability to recover through options that access to the system provides is reduced, so they feel the effects longer.

Another form of mass distortion occurs when both elected and unelected leaders also collude with industry in order to directly increase their own financial/power ownership. There are countless documented examples of this. The turnstyle between the financial services industry and government financial regulation institutions is as clear evidence as any. Leaders in industry participate in (and often initiate) the collusion alongside those in the government because it allows an increase in private power: collusion that distorts laws/regulation empowers big business to greatly expand profit opportunity, exert existing power to close competition down, create cartels, at times affect risk in markets, and ultimately change the system to maximally provide themselves with continued increases in wealth and various forms of power. Members of government that are involved benefit from similar results like increased wealth, power through business backing, conflicts of interest in investments related to their collusion, the ability to convert their supportive actions into powerful positions in those same businesses, and so on (the list goes on).

Another primary source of mass distortion is special interest representing small sectors of people (in comparison to “by the people, for the people”) colluding with government to further distort the system by successfully exerting power to create undue benefit for their representative group. This occurs steadily in discrete steps over time, and its effects are cumulative. This type of distortion is among the most destructive because of course only certain interests are served (not a more common good) and it usually creates a reaction: favor gained through it usually transfers and transforms favor away from those not in the group. The cumulative effects of it can be devastating in terms of common access to the system. You can thank special interest of this nature for the current state of health care, for example.

Another factor involved in massive transfers of value is monetary policy itself. That’s a whole talk for another day because it both aids the types of collusion already mentioned and influences the exact behavior of resulting mass transfers of value (away from many to few). In addition, it’s a steady tax on people with an added bonus of possibly being buried under a financial avalanche. Monetary policy in this country is based on the premise that orders of magnitude of difference between real owned value and value in note form is necessary to sustain value transfer in a system as large as ours. The reasoning in part is that without it business as a whole could not function on a scale this large (that reasoning is non-factual, but it is the reasoning behind things). The other side of the reasoning is that it provides “breathing room” for monetary policy controls to prevent unpredictable economic activity. In practice, monetary policy has two direct effects on real, earned value owned by real people: its continual application creates a steady loss of value in the form of influencing steady inflation over time (which wage often does not increase to offset), and the strategies employed by monetary policy risk a complete collapse of that value as system reactions on the same order of magnitude as policy are tempted. That’s on top of the ways in which it aids in other types of collusion. Once again, for those of us with less access to the system, there are fewer options available to us to dodge or even weather the impacts here.

You can even blanket these different forms of manipulation of the sytem into one: special interest (interest serving an individual or a select group, at the expense of those outside the group).

The normal means by which both market ‘leadership’ (public and private together) and monetary policy attempt to guide value are in maintenance of financial law and regulation, various forms of direct government financial transactions, and in policy aimed to guide the financial services industry. These are all intended at least in part to provide control over economic activity in order to prevent unstable economic behavior. Whether or not those controls work is a wholly different question, but the intent at least is not to serve a select few. The financial services industry is a poster child for the problem we face though because it may be the single most concentrated and active form of value transfer in this country. When leaders across public and private sectors collude to maximize their own gain by circumventing and even redefining rules, it causes mammoth distortions and redirection of value. This type of power accumulation 100% led to the crisis we are in.

Unfortunately, distortions leading to financial losses is not just a cause but also an effect. The ultimate damage takes the form of the system itself having changed in terms of its rules in order to benefit a select few in an imbalanced way compared to others. This is a significant core cause of financial problems for people, and worse–it affects their access to the system. It influences the available choices for people in terms of education and training for a vocation. It influences who they can work for (assuming they can find work), and it influences how much benefit/cost they can possibly experience in that relationship. It influences how far their earned value can go to pay for the things they need. It influences how much they have to work outside of work to live daily life. It even influences how much people can set aside for a nest egg. This is how much force special interest can exert on someone with few options to choose from to begin with.

All of these forms of special interest are damaging to “normal people” because their options to react are of course relatively limited. Many normal people don’t even see the damage or the factors leading up to it. Even assuming awareness, the playing field starts off unbalanced. By default it is a single person versus many groups and individuals with power comparable to a group. Contrast that with people who have key access to the system: they can afford to exert power to change the system and create more access to power as part (or whole) of their job–actually being paid while devoting part or an entire duration of a full time job to influencing the system. Normal people on the individual level can back and join groups that do have access if they’re able, but usually the goals of those groups don’t mesh 100% (at least) with benefit for them, and the numbers of these groups are dwarfed by others their goals conflict with. The most effective option normal people have always seems to be banding together with others in the same boat. While this power can trump everything in opposition, it requires a high degree of highly voluntary group effort. In practice, most of us know how much effort it actually takes even to form enough power to cause a ripple. We’re just not easily able to do so at a level required to make a difference while we are burdened with daily life’s duties (some of which are actually a result of the problem I’m talking about here). This is additionally damaging to people with less access to the system than the norm because their options are even fewer. Things are different with normal people as labor at least in that business needs labor. That is leverage an individual can access and use. It’s not quite as easy when it comes to the broad spectrum of special interest I’m talking about here.

This pattern of changes to the system and resultant mass value transfer induced by various forms of ‘special interest” is a major factor in “income inequality”, and it’s saddening that few have drawn the complete connection (not just “evil industry” or the wealthy not paying their “fair share”) because the evidence is everywhere. People just routinely attribute this evidence to other causes. Often it’s because their pattern of prescribed thought prevents them from seeing the reality that either their beloved industry is one half of the problem or their beloved government is the other half of the problem.

Bigger Picture

When you see the reality there–and it’s the same reality we’ve had for a good number of decades now–you can probably begin to understand just how reactionary wage policy is, too. No one that would benefit from wage policy would ever back it if they knew what the real impact within the actual reality of our system is and they had the power to make more fundamental changes. Why would they back it? It clearly doesn’t help them long term. At best it’s just a force inadvertently exerted that helps psychologically deter them from seeking real access to the system.

When you step back and look at these things, you see power creating more power. When you look at the results, you see people that don’t benefit from that power collectively shouldering the burden in various direct and indirect forms. That of course makes their financial situations even more grim. Ultimately it adds a significant downward force acting against people building financial freedom above assistance and above minimum wage.  So when I personally hear people touting wage control as policy, I acknowledge the obvious: either they do not fully understand how our system really works (in which case they have no business touting policy where they have no concept of or appreciation for the damage to good people), or they do and they’re touting doomed policy for other reasons. In that second case, it’s hard for me to imagine sanity or motive that doesn’t involve dishonesty and grim intent.

This is the problem I continually see in political discourse–a gross misunderstanding of the effect of power on people and how it manifests in systems that may not be straightforward for us to understand. We seem to continue to adopt prescribed patterns of thought without understanding the totality of what occurs.

Many conservatives tout “Reaganomics” as genius. (I don’t mean to pick on Reagan specifically by the way, there’s clear evidence that presidents from our current one all the way back to his terms have been willing and active direct participants in ‘diverting access’ for their own personal benefit.)  What you see though when you really look at the 1980s is parallels to today. It becomes obvious that what Reagan failed to do is apply another one of his famous quotes properly to economic thinking: that government is the problem (in this case, 1/2 of the problem). “Trickle-down” economics doesn’t work when power is afforded in a way that…prevents things from trickling down. That power is afforded primarily by collusion between government and business that runs counter to our system’s design. He obviously grossly underestimated the danger of letting business do what it wants, because one result is what we’ve seen: an effective merger of government and business. I am of course not saying that the existence of government is the problem, it’s in how government is now designed. Our government was originally designed in large response to similar chronic problems experienced with British government: a shared imperial mentality, a very recent history steeped in monarchy, various levels of religious oppression, an increasing lack of representation, and so on. These are the things we can thank for American checks and balances, division of power, forms of oversight, and our reinforcing social sentiment. These critical aspects of our systems’ design are being circumvented now though in increasing ways. Design has been changed counter to intent by power in the name of power in order to serve a select few. I hate to sound this negative and absolute about it, but it’s hard not to when you see the totality of things.

Another gap in a lot of conservative thinking comes from a noble concept of individuals reaching within, tapping into potential, and rising above all of the “noise” (ex. lots in life and various sentiment that naturally follows from it) to achieve greater things. There’s a lot to be said about this concept as a value. The problem it often leads to though is blindness to another concept that many progressives know too well: the fact that some lots in life are often made more challenging than others in unnecessary ways due to problems like those mentioned above. Ironically, this would probably trigger a lot of the same reaction you see in many conservatives when they face oppressive aspects of government–that government has no right to do this. The missing piece of course is knowing more about key factors that create these “unequal lots in life”. I have discussions like this all the time with conservatives I know. It’s often a mental leap for some to say the least.

It’s not like progressives that adopt prescribed patterns of thought have the answer either, and wage control ideas are just one example. For one, one of the most significant factors driving income distribution is exactly the distortion of the system I mentioned before. While many progressives (and I) see the problem, many don’t understand the cause, and if they did, they would at least not support wage control as an answer because it has a cost in itself and doesn’t directly address the problem. The problem is that many people adopting these types of views see every problem as a nail and government as a hammer, and that kind of hammer can easily pick a different target than a nail. That theme of course recurs throughout popular progressive views.

Another example hits right at the heart of a lot of progressive sentiment–views on centralized control (government). For one, while centralized forms of control may be necessary evils in realizing the potential of large social groups, it is also imbued with an inherent flaw. It necessitates people exerting control without the result providing direct feedback that “hits home”. When people aren’t directly impacted by the results of their action related to ‘guiding society’, results can and often range from inefficiency to gross compromise of leadership (corruption, undue oppression, exploitation, etc). Further, some approaches to central control have historically shown to be less effective due to these things than others, and the results are logical, to boot. A good example is systems where central planning is the cornerstone. A socio-economic system that promotes the common good is great, but if that system has no inherent mechanisms to deal with the human condition, power invariably concentrates in order to “guide” it, power corrupts, and people invariably suffer. This is the nature of history. And of course the USSR is by far not the only example, history is littered with these results.

Central control that isn’t designed to effectively use human nature to compel cooperation and supportive contribution to the whole aren’t nearly as effective as those that do. And regardless of the form of control taken, since the form of control itself is a concentration of power, if that control isn’t designed to deter further concentration where there’s risk of it then it can easily increase. The result usually short-circuits the control’s design, and if it happens enough throughout the system then common welfare is compromised. This is exactly what happened with the core causes mentioned above: central control allowed itself to be influenced by special interest, concentration of power increased in an imbalanced way, and suddenly the system is serving some more than others and at their expense. As an example of how many progressives fail to realize things like this, there’s no reason certain socialist approaches can’t work on small scales where power cannot accumulate, but most people that say they espouse socialism in certain forms don’t even understand what socialism is or why aspects of it can easily be advantageous over other approaches on very small scales (ironic example: collective bargaining on scales smaller than unions). I’ve even seen people mistake socialist approaches for “individualist” ones and rail against them while touting larger cookie cutter socio-economic systems that don’t even exhibit as many socialist traits. On the plus side, some people that argue on these topics at least see value in mixed forms of leadership in general, which can potentially open the mental door.

So, after all of that, what’s a better solution for wage policy? I’ll say this–wage control is obviously not a long term solution, it appears only to perpetuate existing problems on top of creating new ones. Addressing damage caused by factors like undue focus of power and widespread transfer of value is part of a better solution (one that addresses all imbalances in access to the system). And ironically, for at least the last 20 years or so, it appears that addressing the focus of power is something leaders have spent the least amount of time doing, even while saying things that would lead us to believe otherwise. Given the nature of things, this shouldn’t come as a surprise.

intro

This is probably going to go like us bumping in a bar, with me feeling bad while adding slapstick for humor, and you being embarrassed maybe more for me than yourself. I’m “Senor Tres”, good to meet you. I’m sorry I bumped your drink, I’m off in warped thought land most of the time, I can’t help it. Let me get you another one, hopefully I don’t spill it and need more of your patience so I can get you a 3rd.

Okay, that’s out of the way. I’m curious about you, so don’t be creeped out when I say I look a lot–maybe too much–at things that you say. This world of mine is crazy small, so it helps me to see things outside, and maybe make a friend for as long as someone can deal with my shit. I can promise it would be a wild ride (!) at least.

To give you an idea about me in return–I haul down the written word like I’m about to die. I read a lot. A lot of it isn’t mental health food, and I’m told “OMG you haven’t read X what’s wrong with you?” a lot, but that’s it. I am enthralled with the human condition. There’s a lot involved, so I take from as much as I can. The patterns I draw based on that force me to jot them down, and unfortunately they’re misunderstood a lot, but that’s ok–in the end, if there’s an end endured, things can change.