Trade-Offs

As was once stated by economist Thomas Sowell:

"There are no solutions, only trade-offs that leave many desires unfulfilled and much unhappiness in the world; It is imperative to have the right processes for making trade-offs and correcting inevitable errors; and it is better to cope incrementally with tragic dilemmas than to proceed categorically with moral imperatives -- for amelioration of evils and for progress it is generally preferable to rely on systemic characteristics of social processes ... rather than solutions proposed by government officials."


(Photo Credit: Hoover.org)


  There are a couple things one should draw from the quote.

1. No matter what "solution" you propose for a problem, it will create other problems that will need their own "solutions." Deciding what should be done is a matter of granting weight to the problems that go away and the new problems that form and thereby determining which decisions grant the highest net utility to society.

2. If society's means of making trade-offs lies solely with the decisions of a few bureaucrats and politicians, it will find that the rate of making good trade-offs is subpar.

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When I declare myself as an anarcho-capitalist-- being in favor of the elimination of all government so the private sector can take over those roles it used to perform-- it is not because I fail to recognize the problems associated with it. I fully understand the free-loader problem and the issues associated with externalities and public goods. I recognize where the private sector can struggle in terms of providing a national defense. I propose and advocate for this system because I think the problems it solves are greater than those it creates, more so than can be accomplished by any system of government.

Perhaps the greatest advantage above, say, a minimalist form of government is the removal of risk for the government to grow, as governments do, and engulf individual freedoms in doing so.

It just so happens that by eliminating government officials and political corruption, one also eliminates lousy "solutions" put forward by the public sector that end up being worse than the problems they "solve."

Overpopulation- The Non-Existent Problem

PERHAPS The most damaging of all false concepts to ever be conceived was one by an economist Thomas Malthus on the principle of "overpopulation": 

"The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction, and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow levels the population with the food of the world".

           —Malthus T.R. 1798. An essay on the principle of population. Chapter VII, p61

(Photo credit: Wikipedia)

At its core, the claim is verifiably false. Were Malthus correct, people from from his time would be richer than they are today, when exactly the opposite is true. Starvation and hunger are far less prevalent in today's society,  and entertainment to supplement adequately-met needs has skyrocketed.

This is because, while the world's population has grown very fast, the amount of wealth produced by it has grown even faster.

But more importantly, the issue is being posed in a completely backwards manner.

Malthus portrays the scenario as "Power of Population" vs. "Power of Earth", when really the two go hand in hand. An increase in the world's population is one of the major contributors to an increase in wealth production.

This is because, on average, people produce far more than they consume in their lifetime.

Furthermore, the process of technological development is sped up as the population grows. Keep in mind that these developments are each made by an individual. To analogize, consider individuals who invent something, or otherwise forward technological progression, as "gold". Everyone else is rock. In large quantities of rock there is some gold to be found, and birthing children- increasing the population- is equivalent to "mining" for more rock. In order to get more gold, one must continue to mine.

Some mines are more profitable than others, of course, and the rock found there is more likely to contain gold, just as genius children are more likely to create new technology, and genius parents are more likely to have genius children. Some refineries are better suited than others, and more likely to obtain the gold out of their rock, just as some parents are more likely to "make the most" out of their children through good parenting.

A child is "gold" if she goes on to use her reasoning mind to radically alter the way an industry creates wealth. And if anything is predictable, it is that the greatest nation on Earth will be that with the most gold. 

I would forward that due to a lack of incentive to match the benefits associated with having children, it is the duty of intelligent, hard-working, capable men and women to have and raise children for the betterment of society.

(^The drill is not an innuendo.)

This is precisely why Malthus' idea about population was so harmful. His thinking, and others' has led to damaging cultural ideas and government policy that have misconstrued the impacts of having children as being largely negative.

               

          CHINA'S ONE-CHILD POLICY

"Since the regulations were introduced in 1978, China has kept its population in check using persuasion, coercion and encouragement. ... [It's] family planning policy has prevented 400 million births"

-BBC News

The 400 million unborn children as a result of China's One-Child Policy, for example, may account for a large portion of the gap between the United States and Chinese living conditions. So much gold was lost- and keep in mind that, like most things in life, this is not a relative measurement. We're not talking about a ratio of gold to rock- we're concerned with the sheer *quantity* of gold. In fact, just as most rocks and minerals mined have at least some value, all but the deadbeats and criminals should be welcome additions to society- and their being unborn through the Chinese policy adds to the riches that their economy failed to gain.

Perhaps more unsettling is the recent cultural trend throughout the west that having children is undesirable for society, for one reason or another. Lately, the most popular argument has been:

(Excerpt from "The New York Times")

It is hard to find words that adequately express how despicable I find this claim, mostly due to the fear that it causes people who would otherwise have added people to the world to not do so, and also because these unborn children would have been housed to parents that are good enough to care about society as a whole, in this case the environment, rather than just themselves. Not only do I see this as a hinderance on "gold children" production, just like a government regulation on mining, it is an exploitation of the nature of good people (and if you know anything about me- the word "exploit" is not used lightly).

As I stated in my very first post- The Experience-Free Opinion- I work to serve a utilitarian end. If you share this goal, consider also that the more people there are in existence, the more good there is to be had.

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And finally if you think space is an issue...

  

Note that God gave us three dimensions to work with.

Gay Marriage: An Analysis

I'd like to start by getting some facts straight. For both sides. I feel that oftentimes this can be at the heart of pointless contentions, so these things need to be cleared up.

1. Being gay is not a black-and-white feeling.
There's a spectrum. A person can either have strong feelings towards those of the opposite gender or those of the same gender- but they could also have very mild feelings one way or the other- or mild feelings one way and strong feelings the other- or they could have a strong attraction to both genders. There are people in each of these categories.

2. There are people who are *born gay*.
Gay behavior in humans has been around at least as long as civilization, and gay behavior in animals is present across a vast number of species. One can only rationally conclude that despite gays being unable to reproduce, genes play a role in whether or not someone is gay.

3. There are people who are gay without being born that way.
Identical twin studies show that while there is a correlation, it is not always the case that both have the same sexual orientation. Therefore, personal experience plays a role in the determining of whether or not someone is gay, at least in some cases.

4. Marriage is not a right.
It's a privilege- and there's a very important distinction. Wanting something- or even needing something- does not give you the right to have that something. If I had the right to a trip to Disney World, I would have used it by now, and if I had the right to food, I wouldn't need to buy it from the grocery store. Likewise, the status of marriage entails certain benefits, which do not fall under the category of "rights" for any two people who decide they want them.

5. This is not semantics.
The debate of whether or not gays should be allowed marital status is not merely an issue of the definition of marriage- it's much more than that. Being married entails social, legal and monetary benefits, which symbolize society's condoning of a relationship.

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When people take a first glance at the issue of gay marriage, I'm tempted to say that they usually don't look any closer than that- a glance. Some will consider it a flat-out lack of equality, or even attribute it to slavery, others will find the notion disturbing, or perhaps in conflict with their faith, and discount the idea for those reasons alone. On both ends, I think there's more to be seen. Let me go over some popular arguments:
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Consider first the argument: "So long as they mind their own business, I can mind mine. Let them call it marriage, it's all the same, right?"

Wrong. Once again- this is not semantics. Whether or not a group of two people is granted marital status is the difference between society granting it's approval or disapproval of the union, and that says a lot about our culture. Very few people actually would contend with the point that they can't simply mind their own business- that's what America's all about, and that *is* a right. But the transition from "mind your own business" to "go ahead and get married" is, while perhaps subtle, a significant transition indeed.
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Consider now a second argument: "If two people are happy and love each other- they should be just as accepted in society as an old-fashioned married couple. Man and a man or man and a woman- they're still two people- and if they want to get married they should be able to do that for themselves."

I think the follow-up questions should be asked: What of two siblings? What of a 60 year old man and a 9 year old boy? It's two people- and they're in love- so what's to stop them from being married? How about a man and two women? Why can marriage be all inclusive to any two people, but not any 3 people? Or 6 or 7 people? At some point- call it discrimination if you will- no one is going to be comfortable condoning certain kinds of relationships, and they probably shouldn't. The examples I provided are both disturbing and problematic, and evidence has shown that individuals involved in these sorts of relationships lead very troubled, and perhaps troubling, lives.

Societies that practice polygamy, for example, have women shortages- which can lead to serious rioting issues and can serve as an intense incentive to leave the country, or region, to find love elsewhere. The United States medical community openly recognizes pedophilia as a psychiatric disorder-- as do law enforcement officials. Pedophiles are far more likely to participate in a wide array of criminal activity, and far less likely to be productive, functioning members of society. I have no doubt that should a relationship ever be permitted, heaven forbid, between a pedophile and a child, it would be disastrously unhealthy for the child. It is undoubtedly an undesirable thing to occur.

In these cases, America, and most of the rest of the civilized world, has chosen to make these relationships illegal-- arguably the removal of actual rights. Interesting how these people are never spoken up for by this group of arguers.

I make this point because research suggests that gay relationships often have similar sorts of issues. Gays are more likely to contract sexually-transmitted disease, more likely to attempt suicide, more likely to experience depression, more likely to abuse drugs, more likely to be criminals and less likely to be as productive as other people in straight relationships.

The question becomes- in the one direction- at what point does the relationship become so harmful to society that you make it illegal? And in the other direction- at what point does the relationship become beneficial enough to be condoned and formally appreciated by society? I would argue that gay relationships lie somewhere in between.
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Should the government be a part of this? Probably not, no.

Whether you're straight or gay, and regardless of what kind of relationship you want to have with a partner, the law should stay out of the picture as far as ascribing a legal status of marriage. Involving the government in such matters (almost any matters, really) can only do harm.

In this case however, the government is doing a very small amount of harm by ascribing a legal status. Yes, there are some benefits the government dishes out, but those are relatively small in number and minor in significance. What's more important is the cultural meaning behind the term "marriage", and how that impacts people within society.

Without doubt, marriage is a "good" thing in the eyes of most people. If you are "married" to another person, people will appreciate you and give you gifts and celebrate and recognize you for an accomplishment. This is all encouragement that should be given to truly "married" couples- one man and one woman of similar age. It is a unit of society that is able to reproduce and raise children- one of the most important roles people can play to help society progress. It is a unit that is relatively stable and encourages a productive citizenry.

Mankind is fortunate in present times to be able to create such meaning with a label, which is the result of that label being passed down through history for countless generations.

By applying that term to a relationship or relationships that are not so inherently beneficial would either encourage poor behavior, thereby degrading our culture, or take the meaning that marriage has developed and allow that advantage to dwindle away as it becomes meaningless.

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This should not be an issue of government- as far as I'm concerned, "marriage" is already recognized by the people- the question is whether or not we should be recognizing gay couples as married.

It is so crucially important to make sure we encourage the right lifestyle choices. There is a uniqueness in a heterosexual relationship- and good behavior aside, that's the ability to produce children and raise them in a good environment. That deserves society's recognition and approval as something different and important.

More important than *anything else* is learning to accept people as people- no matter their sexual preference. Whether or not one chooses to engage in an unhealthy lifestyle is their choosing, but that lifestyle is made worse when lived in an environment of people who are not accepting.

I use more space to make the first point only because it is so much more controversial in nature. Please please never ever use anything I've said here to forward ideas of hate- that one person is any less than someone else for their differences. I can't plead strongly enough for people to become accepting and loving in character to people, any people, who mind their own business.

Government: The Phases of Progress

Governments have gone through a great deal of change over the course of human history- and sometimes for good reason, as I have illustrated in my recent articles on "Public vs Private." Ultimately is is a question of which industries are better managed by the public sector, and which are better managed by the private sector, at any given point in time.

Basically, should this industry be in the hands of the government or the people?

In almost every instance, the answer is the people. This is because people create competition, while governments are self-imposed monopolies. Furthermore, as time marches onward, the very few industries that the government is best for dwindle away.

Currently, the number of industries the government *does* manage is far greater than what they *ought to* manage.

This is because, through the process that I have explained in my two articles prior, society has moved from one phase of progress to the next.

The biggest changes in the production of wealth occur when the government moves away from an industry that the private sector gains the ability to manage properly. Thus, society progresses in leaps and bounds when all the prerequisites click into place that signal the government's time to move on.

It is technology that allows us to progress, and it is the reduction of government that signals progression.

The Phases of Progress:

1. Dependency
2. Expansion
3. Freedom

A brief explanation of these:

In the Dependency phase, humans have so little an ability to produce that they are forced to rely on each other for survival. In this phase, the government must manage extractive industries, which is likely the only type of industry to exist.

In the Expansion phase, production capability has increased to the point where man is freed from men. People can now manage all extractive industries, as well as all manufacturing and services industries, which have appeared since this time. This society now has the ability to fight corruption, which is the process of political leaders extending the role of government into aspects of society where they serve only as a hinderance to progress. Corruption must be fought with the aid of a military however, which is better managed, even at this time, by a government. The government should exist to provide and use (where appropriate) a military, but nothing more.

In the Freedom phase, corruption has been annihilated and capitalism reigns across the globe. Nations disassemble, and governments resign their authority. The people manage all existing industries.

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Note that these phases oftentimes where a society could fully progress from one phase to the next, its government often prohibits it from doing so- and it lies somewhere in between. Currently, although nearly all of humanity has been outside the dependency phase for many thousands of years, there is not a society in the world with a government that acts accordingly. This is because of corruption, which must be fought by the people, through democracy, within one's own nation.

But where peaceful means of eliminating corruption become impossible, it is the role of other nations to intervene. That is the duty we have as people, and that is the role government must play until the industry of warfare, unique to all other industries, falls out of existence. 

Corruption, it seems, is at the heart of the problems of our day. Where government should be shrinking it has grown, and where able militaries should be stamping out the oppressive and spreading the goods of capitalism, they sit idly in the name of peace. Should this pattern continue, this is the manner in which we will watch our world decay.

Public vs. Private- Graphs and Equations

They say people learn things differently. If long, wordy paragraphs isn't your cup of tea, I've taken the most crucial points of my previous post: "Public vs. Private" and made "sense" out of them.

If this concept already exists, and I'll bet it does... well, here it is again from my perspective.

The thesis of my last post was:
The distribution of resources by a government was necessary at the time of cavemen because the variance in individual production was greater than the reduction caused by reduced incentives and it happened that with limited capability to produce, the difference in variance was the difference in obtaining that which one needed to survive.

To demonstrate what this means, I have constructed for you some graphs.

First, for the typical individual living 60,000 years ago, a hunter-gatherer:

As you can see, while his average production level remains above the subsistence level, it lies close enough to it that the variance in production on a daily, weekly or monthly basis could cause it to drop too low. This being the case, it would only be a matter of time before an individual, without the help of others, would starve to death. Or else he may try a riskier form of hunting, out of desperation, that could get him suitably killed in some other manner.


When people band together and form a government to distribute earnings, two things happen:
1. The inefficiencies of government reduce the average production
2. The wider range of producers greatly reduces the variance

And so the graph instead looks like this:

In almost any scenario, from a macroeconomic scale, you will always want to favor average production level over reduced variance- because individual variance is going to be counter-acted, virtually entirely, by the fact that there are so many individuals within society.

The one and only exception to this rule is if your producers are dying as a result of the variance. Because more critical still than keeping average production level up is making sure that members of society can reliably attain survival.

It is for this reason, the trade-off caused by implementing governmental wealth distribution laws was a desirable thing for people to do 60,000 years ago. At least, the alternative was much less desirable.


In contrast, here's what the graph looks like for the individual in present-day times:

Note that the subsistence level has not actually moved-- people still need all the things today they needed back then as hunter-gatherers. There is a certain amount of food, water and shelter that a person needs to survive, which hasn't changed in any significant way over the course of human history.

What has drastically changed is average production and variance. After all, nobody from a McDonalds employee to a MBA sports star has to cross their fingers and wonder if they're going to get their paycheck- and when they do get a paycheck, ungraciously and in ignorance of their good fortune bumbling around the grocery store, the hunter-gatherer could never dream of the variety and ease that this American has the pleasure to associate with obtaining food.

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The fourth graph is unnecessary, and simple in nature. Apply the changes seen between the first and second graphs to the third graph. Is the trade-off of a government redistribution of wealth still worth it? Are we desperately avoiding the subsistence level, and need we sacrifice average production in favor of inefficiency to stay clear of it it?

I think not.

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Oh, and I did this too:

S= subsistence level
A= average production
T= true average production
V= variance
I= inefficiency
G= government redistribution

S= constant
A= variable
T= A - I
V= z + G(-x), where x > 0, z > 0.
V is never < 0.
I= G(y), where y > 0.
G= variable

So here's the what-to-do-with-government cheat sheet!:

If T - V < S, and x > y to the extent that T - V becomes closer to S as G increases, increase G until T - V = S. If y > x to the extent that a reduction in G causes T - V to become = or > S, reduce G to 0.

If T - V = S, reduce G if, and only if, y > x to the extent that T - V remains = S or becomes > S as G is reduced. Should this occur, reduce G to 0.

If T - V > S, reduce G until T - V = S OR G = 0, whichever comes first.

Public vs. Private

First, some background information.

Definitions

Industry: According to Wikipedia "the production of an economic good or service within an economy." This is too vague, however, and misses the most crucial aspect of an industry, which is specialization. My definition:

     "A form of wealth creation that is both specialized and marketable."

At its core, modern society is a merely host of industries, all of which will fall under one of three  government-recognized categories:

1. Extractive (or 'Primary')- such as mining or farming.
2. Manufacturing (or 'Secondary')- including processing, packing or refining raw goods.
3. Services (or 'Tertiary')- such as teaching or managing.

And each industry is managed by one of two sectors:

1. The Public Sector- the government.
2. The Private Sector- sometimes divided between business, voluntary and individual, and consisting of all non-government citizens.

Since society's founding, the major general trend seen is the diminishing of the public sector in favor of the private sector, especially in the extractive and manufacturing industries. The question often posed is 'why?' Through this post I intend to answer that question, and then explain what that answer means for American society.

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If we take our time machine way back to the caveman era (60,000 years, give or take a couple thousand) we would find, as archaeologists and historians have often described, a culture of scavenging, hunting and gathering humans organized into tribes. Such a lifestyle has since been dubbed membership in a "hunter-gatherer" society, where people sustained themselves at a subsistence level, and risked their lives on a daily basis to obtain the basic necessities of life. This is the way that mankind has spent most of its existence on planet Earth.

The first thought that would come to your mind? "Different." After all, you don't risk your life catching Frosted Flakes at the grocery store. But it only gets more peculiar as you watch the men assemble with the day's earnings to feed. It has been noted of tribal society that they are egalitarian in outcome, and you watch with amazement as one man brings in two large animals and hands one of them to another hunter who returned with nothing at all! Each tribesman then proceeds to give his food to the tribe leader, who then divides it evenly amongst the group. This is the concept of taking an industry, in this case hunting (an extractive industry) and allowing the public sector to manage it. 

Now, depending on who you are, that strikes you as a fair or an unfair concept- either way bear with me as to why it's a problem.

If Jack, Jill and I decide to form a tribe, and agree that whatever food we spend hours to catch will be divided between the three of us, why would I bother hunting for food? I'll sit and wait and rest on my back and surely by evening Jack and Jill will have returned with food for me to share.

It's possible that we could form some sort of binding contract, that each must do his part to the best of his ability, but how can one judge his own ability? Much less the ability of others? Moreover, what if our tribe of 3 is instead a tribe of 10? Or a hundred? Or what of a hundred thousand? Surely, at some point, the contract is impossible to form, knowing that unless every single member signed it willingly, the problem would persist.

As the size of our tribe increases, a leader must be appointed for distribution, and enforcers to carry out the rule, thereby forming a tribal government. This adds the problem of corruption to the equation, as one man alone will determine how much food each person "needs", and may be susceptible to a humble bribe.

But it was not the case that every single hunter-gatherer society was exceedingly stupid. Nor was it the case that every one of them just so happened, in their stupidity, to create the same form of government seen all over the world. It was an evil formed by necessity- the necessity to survive.

Consider the ramifications if our tribe, now formidable in size, chose not to implement an equal distribution law. If I want to eat on any given day, I better spend a lot of hours making sure that happens, because no one's going to pass me a little extra something when I come up short. Unfortunately, I am forced to deal with the added element of uncertainty. Each day that I go to hunt is going to vary in effectiveness, and while some days I'll bring home more than enough, others I may not catch a thing. When my average level of production hovers so close to the amount that I need to survive, a dip can really hurt- or even kill.

So the point is...

The distribution of resources by a government was necessary at the time of cavemen because the variance in individual production was greater than the reduction caused by reduced incentives and it happened that with limited capability to produce, the difference in variance was the difference in obtaining that which one needed to survive.

Now let's go back to that thought of yours: "different." Well we all know that difference is caused by change- so what momentous occurrence restructured society as we know it?

The change: Technology.

The effect: Diminishing of the public sector in favor of the private sector.

If we allow society to play itself out through the years, we'll notice technological progression. Key individuals with big ideas will present inventions to cheapen the cost and maximize the production of a given industry, or to create a whole new industry.

The first big thing to come along, many thousands of years later, was agriculture. Though we aren't sure of a name, some man or woman conceptualized irrigation, and eventually contributed to the formation of the farming industry. Meanwhile, other genius individuals were inventing new weapons and hunting methods, thereby increasing the chance that a man gets the food he needs each day. Thousands of years passed and people were hunting with projectile weapons- bows and arrows at first, and then rifles, and then better rifles. Hunting became so easy and profitable that starving was out of the question- people instead were making *excess* of what they needed, causing entertainment industries to form, such as television and cassette players.

But technological development is not without social development, and when people discovered that they didn't need other people to ensure the bare minimum, they destroyed laws of wealth distribution and removed government from the picture, thereby willingly handing these industries from the public sector to the private sector.

In short, technology has freed man from men.

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Now if Jack takes his shotgun to go hunt for deer and Jill mans her tractor to till her expansive farm, and both will undoubtedly succeed in providing for themselves, and then some, I better get off my butt to go pass out food at my local restaurant if I want something to show for the day. And you can bet I will.

The Experience-Free Opinion

Whenever I construct a speech (or just say something in general), I tend to format it like a debate. The nature of a debate is to put forward opposing arguments, and the goal is to sift through the weaker ones and find that which prevails. In a sense, the concept of debate is no different in a legislative assembly as it is in your own mind, when you make decisions for yourself. In either setting the goal is to determine which of multiple options is the most correct to choose, and it is done through the process of offering points and contending them.

The posts I write here are intended to seek truth using this process. I am opposed by intellectuals around the world who have publicly presented their points, and I intend to refute those which cannot stand to reason.

Debating the sides of such controversial, dire issues as politics and economics is more than fact-checking, however. One cannot stand before the senate or take the floor of a business room to oppose an idea if he has not another to take its place. And so, in addition to my criticisms, I will make propositions for the topics I discuss, and support them with good reasoning and evidence.

It is always good practice to define one's terms before anything else, as mine may differ from some others'. Sources listed where applicable.

Definitions

Politics: Merriam-Webster reads "the art or science of government." However, for purposes of my contentions it need be somewhat less broad. My definition:

     

     "Societal interactions between individuals or organizations that involve a government."

Economics: From Wikipedia we find "the social science that analyzes the production, distribution and consumption of goods and services." One minor change I would like to make:

     "The social science that analyzes the production, distribution and consumption of limited goods and services."

The purpose of this addition is two-fold. One, to represent the distinction between limited and unlimited resources, only the former of which applies to economics. The second is to specifically avoid the term "scarce." It is often said that economics concerns the allocation of scarce resources, and while, from a strictly economic interpretation of the word "scarce", that is technically true, I find it to be misleading. Scarce seems to imply a small amount, indeed, it is often defined that way. But most basic resources Americans deal with on a regular basis, such as food and clothing are far from few in number-- on the contrary, they are often quite abundant. However, economics still applies to these items as they limited in quantity.

Utilitarianism: My definition:

     "A theory that maintains the principle of 'the greatest good for the greatest number of people'."

This definition, or something very similar, has held for many centuries. It is the ultimate goal that society must attempt to obtain whenever decisions are made. The winner of a debate, ultimately, is the proponent who's ideas best match the criteria of utilitarianism.

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There is much to comment on, but not always the time to do so. Updates to my work may be irregular, and also might depend on the interest received by others.

Thanks for reading,
Jacob Oveson