Archive for the ‘Thoughts on Economics’ Category

Two Unanswered Questions about the Greek “Bailout” Deal

July 13, 2015 2 comments

Yesterday the Greek PM (Alexis Tsipras) agreed to a tentative deal with other EU leaders that would provide a “bailout” of 86 billion Euro to Greece in exchange for levels of austerity and privatization far surpassing those reject in a referendum about a week ago. Leaving aside all the speculation surrounding the circumstances of this deal, there are two broader questions about this situation that have not been answered properly (i.e without speculation, self-serving lies and bullshit).

Question 1: Why do such a large percentage (over 65%) of Greeks want to remain in the Eurozone?

One of the central electoral promises of Syriza was that it would stop further EU-imposed financial austerity and still keep Greece in the Eurozone. But even more curiously, various polls showed that 2/3 rds of Greeks wanted to stay in the Eurozone. While those percentages might have gone down in the last few weeks, I still have a hard time understanding why Greeks would want to be on a team where most other members hated and abused them. I mean, it is possible to remain in the EU even after exiting the Eurozone.

While average incomes in Greece (as measured in Euros) did rise after joining the Eurozone, it is hard to make the case that it has made their lives any better. The sad reality is that they could have gotten most of the benefits of joining the Eurozone by joining the EU but maintaining their own currency. While I can understand why the Greek 1% ers (or 10% ers) wanted to join the Eurozone, the extensive popular support for retaining the Euro as the default currency in Greece does not make much sense. It is ego? Is it false consciousness? Is it the desire to be seen as European rather than Mediterranean?

Question 2: Do Germans (both its leaders and average citizens) think that making Greece sign an economic version of the Versailles treaty in 2015 will somehow stabilize a fundamentally defective currency?

Let us for a moment assume that Tsipras can get this deal through the Greek parliament and make sure that it is implemented in full. Let us also assume that his government, or any other replacing it, can keep it going for a couple of years. Then what? Does it improve the economic situation of the average person in Greece over the next two years.. five years.. ten years.. twenty years? My point is that pretty much any plan based in the neoliberal scams of austerity and privatization will almost inevitably cause more open-ended financial deprivation for the average Greek person. To put it another way, there is no light at the end of this tunnel.

Even if we ignore the very real possibility that such policies would almost inevitably lead to the the rise of right-wing nationalist parties in Greece, we are still left with an even bigger problem- namely, that other countries in the Eurozone might decide, or end up, sabotaging the Euro. It is no secret that significant minorities of the population in France, Italy and Spain have always been hostile to the idea of a common European currency. It is also well known that two out those three countries are not in the best of financial circumstances- at least as seen through the lens of neoliberal capitalistic dogma. However unlike Greece, they are large and have economies diverse enough to go willingly exit the Eurozone- if it comes to that.

Now consider the terms imposed by Germany on Greece and its likely effects on the later. Do you think people in those three large Eurozone countries will ignore what they are now seeing (economic colonialism) and will almost certainly see (more economic deprivation) in the future. Do you think they would still want to retain a common currency with Germany, if the later can do to them what it is doing to Greece? Why would you retain a common currency with a dominant country in a group if you have no political representation in the decision making process of that country? Let us not forget that the US Dollar works because all states in the USA send elected representatives to Washington DC. If they did not, states not benefiting from the common currency would start dissociating themselves from those that did so at the cost of the former.

What do you think? Comments?

Two Dystopic Themes Running Through “The Big Bang Theory” Sitcom

April 19, 2015 17 comments

First, a quick word about the title of this post. I am aware that it was not the best, most concise or most accurate description of what I am about to discuss. But it will have to do (for the time being) since the post is far more important than its title. So let us begin..

As many of you might know, “humorous” sitcoms with outrageous extrapolations of reality (other than sex, violence and grittiness) have been a staple of network TV since its inception. These shows can usually be identified by their tired laugh tracks (or forced live-audience laughs), almost exclusively indoor settings, supposedly “witty” dialogue and highly contrived situations. Shows on this genre were extremely popular from the beginning of broadcast TV to the early 2000s when they began to lose their prominent place in the public imagination to “reality” TV shows.

I can give you many reasons why sitcoms have always been worthless crap and why the successors aka “reality” shows are no better- but that is best discussed in another post. This particular post is about the accidental (and I suspect, unintentional) depictions of dystopic reality in one of the still successful holdouts of the “sitcom” age- The Big Bang Theory aka TBBT.

Sitcoms, by their very design, are not supposed to depict reality, or anything even approaching it, as there are the escapist entertainment of plebs in developed countries. Unfortunately, the real world has a tendency to bypass even the best attempts to stop it from making itself apparent. Sitcoms usually handle this by trying to sugarcoat some really obvious aspect of reality or just skip onto to the next zany contrived situation. Yet aspects of reality that are not specifically targeted for suppression often sneak into supposedly humorous and feel good crap.

Many premises of TBBT have been criticized for a few years now, as have the supposedly negative depictions of certain groups in it- Link 1, Link 2, Link 3. You can find more of such critical articles, as well as a few supportive ones, by using Google. Now, I largely agree with much of the criticism leveled at this show. However whatever little I have seen of this show (largely through channel surfing) also suggests that it, perhaps accidentally, depicts some pretty realistic and dystopic stuff.

One of the two major dystopic theme running through the general storyline of TBBT concerns how the characters (specifically ‘nerds’) treat each other. It seems that each of the supposedly high-IQ nerd characters are always just an opportunity away from betraying or murdering the others, even if the gains are very small or temporary. While this premise is used by the show to develop ever more convoluted and eyeball-grabbing storylines, it is far closer to the lives of the real-life counterparts of the characters than anybody would dare admit.

One of the main reason behind my contempt for most academics, scientists and pretty anyone who measures their self-worth by jumping artificial hoops is that such endeavors tend to concentrate the most pathetic, short-sighted, egoistic, backstabbing, backbiting and yet largely powerless pieces of shit I ever had the misfortune to encounter. Even worse, most STEMers are stupid and gullible enough to be enthusiastic tools for any sociopath who can flatter or tempt them with insultingly small rewards. STEMers love to denigrate, betray and abuse fellow STEMers- especially if they believe that such actions might win them some imaginary brownie points (and acceptance) by sociopaths.

Readers might have noticed that most episodes of that show center around somebody in the group trying to screw over, sabotage or berate, its other members. Such mindsets, attitudes and behaviors are far closer to reality than most people (including STEMers) would like to believe. Curiously, it also show the rather bizarre phenomena of STEMers hanging out and pretending to be friendly with the very people they want to denigrate, betray and abuse.

The second dystopic theme running through the show concerns the arrested development (personal and professional) of its main characters. If you have seen enough snippets of that show over the years, it is obvious that none of the main characters possess the ability to actually make some large or innovative contribution to their field of knowledge. This is so inspite of their supposed high-IQs, “ivy-league”/”top-15” educational pedigree or even access to enough resources.

Sadly, or not, their inability to achieve any of their personal intellectual milestones mirrors the real and accelerating decline in scientific productivity in developed countries- especially the USA. The real world drop in real innovation and progress started in the late 1970s- at almost the same time educational and research institutions started using proxies of ability such as metrics and pedigree to determine funding and promotion. The false scarcity of resources and reliance on proxy measurements of ability which characterize science and similar endeavors today favored their domination by pathetic, petty, aspy and uncreative but impressive sounding witty losers/tools.

Characters in that show also display signs of personal arrested development, which while often played for laughs does sadly (or not) mirror the very real trend of STEMers being increasingly obsessed with their “jobs”, “credentials”, “careers” and other imaginary bullshit. It is as if they (or even the non-STEMer characters on that show) are increasingly living in a make-believe world because they are terrified of what lies beyond the decaying prison of the status quo they so desperately want to hold on to. Perhaps, part of that show’s persistence and popularity are due to its dystopic undertones.

What do you think? Comments?

Willing Believers in Imaginary Entities Deserve Abuse and Destruction

April 4, 2015 20 comments

I recently came across an article in ‘The Atlantic’ which tried to make an insipid case that people should not get outraged by the actions of morons who justify discrimination against other people based on their own interpretation of literary works of unclear authorship. The writer of that particular article was trying to make the case that many of those who discriminate against other groups are not “bad” people. According to him, they could even be family-minded Mormons, devout Hispanic women or Muslim immigrants.

While that line of reasoning might suffice for some idiots, it has a huge and fatal flaw. As many of you know, the vast majority of people who committed state-sanctioned genocides (including the ‘final solution’ under the Nazis) were also devout, hard-working and family-minded people who just wanted a well-paying job. It just happened to be the case that their jobs centered around systemic mass murder of people who had not personally wronged them.

The same is true of all those “good” Spanish who committed genocide in south and central america. Similarly all those whites who committed direct and indirect genocide in north america and then built their lifestyle on the backs and corpses of black slaves might also have been devout, family-minded people.

My point is that excusing the repeated intentional actions of people because they are “devout”, “hard-working” and “family-minded” displays a level of sophism and spinelessness that only a liberal could attain. This is especially so when those injured or killed by the actions of all those self-righteous people have not previously harmed them in any measurable manner. It is even more so when personal interpretations of books with unclear authorship are the justification for the such behavior and actions.

Here is another way to look at the issue..

How many of you would support the right of a person to discriminate against, or kill, other people based on the voices he heard in his (or her) head? Most religious traditions in existence today can trace their origin to some divine communication conveniently revealed only to the founder of that particular religion. So.. what is the real difference between people who hurt or kill others based on the voices in their heads and those who do so because they are allegedly following the unfaithfully transcribed beliefs of a long-dead person who supposedly heard voices in his head?

And this raises an even more troublesome question.. Why would anybody live their life according to the text of a book that makes clearly unfulfillable promises to its readers? Would you keep on voluntarily giving your time or money to any person or organisation that cannot deliver on even its most basic promises? So why is religion (traditional or secular) or an ideology any different? How many of the true believers in ideologies as diverse as Christianity, Judaism, Islam, Hinduism, Capitalism or Communism have received any of the promised benefits of believing in them?

So why do people believe, and take pride, in advertising their strong belief in such obvious scams?

A couple of previous posts by me, Link 1 and Link 2, I have put forth the idea that belief in religion or ideology is about creating a justification for abusing, scamming, stealing, raping and murdering other people. Perhaps most humans have an insatiable need to hurt and kill other people but do not have the metaphorical balls to do so on their own account. They therefore require the external justification provided by any scrap of paper or the ravings of another person to hurt and kill other people.

Then there is the issue of reducing the chance of reprisal for carrying out such actions.

Cloaking sadistic and murderous desires in the name of religion and ideology allows it be legalized and reduces the chance of reprisal from those hurt by said actions. Killing people publicly labelled as “unbelievers”, “non-muricans”, “terrorists” makes it sound justifiable and “right”. Similarly stealing and abusing people because they are “non-whites”, “have low IQ” etc apparently sounds more reasonable than doing it because you are a piece of shit.

Nor is such solipsistic behavior restricted to whites, as it is trivial to find obvious examples of similar behavior in every group, society and race in the world. You can find desperately poor and sick people who want to hurt and kill others more vulnerable than them in the name of some leader , ideology or religion in every part of the world and at all times in human history.

That is why I do not care if the true believer of any ideology (or follower of any leader) is white, black, brown or blue. Nor do I care about the merits of their ideology, society and culture. Those who deliberately prey on more vulnerable people are extermination-worthy crap. They do not represent any hope, and are incapable of creating, a better future. Left to their own devices they will be never be able to transcend the human condition.

It is for this reason that pondering on the justness of the treatment received by those who discriminate against people who have not demonstrably injured them (be they devout mormons, catholic hispanics or muslims) is a worthless exercise. If anything, the continued existence and prosperity of eunuchoid assholes who require the cover of external ideology to justify their sadistic behavior is an indictment of humans as a species.

What do you think? Comments?

How CONservative Subhumans Think: Apr 21, 2014

April 21, 2014 71 comments

Regular readers of my blog know that I have never seen CONservatives as anything other as subhumans who will willingly slave away to enrich their real exploiters. Rarely does a day go by when I do not come across one more example of why people of the CONservative mindset are subhuman tools. The remainder of this post is based upon one recent, and very clear instance, of why CONservatives are subhumans.

Edit: Here is a more recent post that explains the gist of my argument.

It all started with a recent article in Washington Post about the effect of rising university tutions on the ability to students to feed themselves- More college students battle hunger as education and living costs rise

When Paul Vaughn, an economics major, was in his third year at George Mason University, he decided to save money by moving off campus. He figured that skipping the basic campus meal plan, which costs $1,575 for 10 meals a week each semester, and buying his own food would make life easier. But he had trouble affording the $50 a week he had budgeted for food and ended up having to get two jobs to pay for it. “Almost as bad as the hunger itself is the stress that you’re going to be hungry,” said Vaughn, 22, now in his fifth year at GMU. “I spend more time thinking ‘How am I going to make some money so I can go eat?’ and I focus on that when I should be doing homework or studying for a test.”

To make a long story short, the above linked article talks about how rising tuition costs and decreasing (or harder to obtain) student financial aid causes food insecurity for university students who do not come from well-to-do backgrounds. As many of you might also be aware of, university tuition fees in the USA have consistently grown at rates far higher than gross inflation, wage growth or even health care for the last thirty years. It is noteworthy that this rise in fees has not translated into wage increases for the tenured university faculty or support staff. Indeed, universities are now heavily dependent on temporary sessional instructors who get paid only a fraction of what the shrinking tenured faculty makes. FYI- all of that extra income from ever-increasing tution fees is mostly spent on “wealth” management for the university, sports teams and athletic facilities, salaries for a greatly expanded administrative staff and other stuff that has no positive effect on the quality of teaching.

So what aspect of this article ticked me off. Well.. it was not so much the article, as some of the comments that made me write this post. Here are a few of the more typical examples.

ChrisMallory 4/15/2014 8:48 AM MDT
Have these special snowflakes never heard of Ramen noodles? Get them on sale at 10 packs for a dollar and eat like a king.

joepah 4/11/2014 12:28 PM MDT [Edited]
You can buy a 50 lb sack of rice for $25 and a 5 quart bottle of veg oil for $10. 25 lbs dried black bean $23. 1 lb salt $1. Not the most exciting food but provides all the fat and carbos to keep you going. Flour lard and veggies can be cheap. Give me $100 at month and I can feed a college student, IF they are willing to learn to cook.

ceemanjo 4/10/2014 6:48 PM MDT
I was hungry every night my first year of graduate school, lost fifteen pounds and I wasn’t fat to start with. After a while, I learned that you can live off potatoes and beans. It is truly amazing how little you can spend on food. Do you want to live like that your whole life? No. But it doesn’t hurt for a few years. I look back with some fondness to my struggling student days. I think we should lighten up about this. It is actually a good thing for college kids to be hungry sometimes, good learning experience. A good inexpensive college dish is ramen with cabbage and carrots. You can fill your stomach for less than a dollar. Ramen isn’t much good for you but it fills you up and the cabbage and carrots are. Potatoes are cheap.

Terrence Lorelei 4/10/2014 4:47 PM MDT
Well, something tells me that Mommy and Daddy (or, Mommy and Mommy) won’t really let their little darlings starve. Also, the ridiculous arguments about following the models of some silly Euro-weenie nation simply do not hold water; a nation of 330 MILLION in a free-enterprise system cannot be compared to a mini-nation of 10 million socialists, all living just above the poverty line due to government confiscation of most of their paychecks. But then again, the spoiled American under-25 crowd simply will never understand that they are NOT owed anything until they earn it.

CivilUser 4/10/2014 12:20 PM MDT
What happened to Ramen Noodles? They still sell those dont they? Thats what got me through school. That and a used rice cooker that always had rice cooking. Meal plans at my school were for the kids who had parents with money.

While comments such as the ones highlighted above are now becoming the minority opinion, they were until very recently the majority opinion. But why? It should be obvious to all but the brain-damaged that there are no real constraints in providing every single person on this planet more than enough to eat. The technology and resources to do so have existed for a few decades now. Nor is money a real issue, partly because it is not real to begin with and can be produced in unlimited amounts at a touch of a button. Furthermore, the USA spends infinitely more money on far more dubious causes such as “stealth” aircraft that cannot fly in the rain, nation “building” in the middle-east and spying on its loyal “citizens” (subjects).

It is clear that food insecurity in university students is not due to a real lack of food, money or social utility. It is about creating artificial scarcity.

But why? What is the rationality behind creating artificial scarcity? Well.. while there is no rationality behind creating artificial scarcity, there is certainly a logic- a CONservative one. As I have said before, CONservatives are almost exclusively motivated by making the lives of someone else, usually less fortunate than them, miserable. They are, as a group, incapable of relating to other humans and indeed any other life forms in any other way. CONservatives have no real interest, or belief, in concepts such as personal responsibility, frugality, utility, or honesty. Indeed, they only invoke such concepts to try to shame and handicap naive people. CONservatives are just a bunch of pathetic parasites who were not lucky or smart enough to make it into the big leagues. They spend the rest of their pathetic lives trying to win small personal victories by trying to screw over other people. The only real and lasting solution to this problem involves the sudden disappearance of all CONservatives and their progeny.

What do you think? Comments?

Thomas Hobbes was a House Slave, Not a Great Philosopher

April 12, 2014 8 comments

The name of a 16th century “philosopher” known as Thomas Hobbes frequently pops up in discussions on a range of topics ranging from the best type of governance to whether a state is necessary for reasonably stable societies to exist. He is best known for writing a book known as Leviathan in which he argues for of a system in which a very small group of “special” people have a monopoly on violence. In his opinion only such a system could guarantee social stability and economic prosperity.One of his most famous quotes is about the state of human society without a top-down repressive regime.

In such condition there is no place for industry, because the fruit thereof is uncertain, and consequently, not culture of the earth, no navigation, nor the use of commodities that may be imported by sea, no commodious building, no instruments of moving and removing such things as require much force, no knowledge of the face of the earth, no account of time, no arts, no letters, no society, and which is worst of all, continual fear and danger of violent death, and the life of man, solitary, poor, nasty, brutish, and short.

So why am I choosing him as the target of this post? Well.. there are two reasons. Firstly, he is a good example of the prototypical academic who will suck cock and write pretty lies for his paymasters. Secondly, his reputation needs to be demolished to the point where nobody wants to remember him, quote him or even try to recycle any of his ideas.

Many of you might wonder how something like this can be done. Wouldn’t irreversibly tarnishing the image of a long dead, semi-famous, white intellectual be hard. My answer is- not really. Think of all the famous white people who stood behind the idea of eugenics in the early 20th century. How many can you name or, more importantly even want to remember? Similarly the memories of even more famous people like Hitler, who was once widely admired in pre-WW2 UK and USA, are now irreversibly associated with evil. To put it another way, engineering large changes in the public images of famous (or semi-famous) people is actually quite easy.

Moving back to the topic at hand, let us start by looking at his early life and see if it provides any obvious clues as to why Hobbes became a servile cocksucker for the elites of his era.

Born prematurely when his mother heard of the coming invasion of the Spanish Armada, Hobbes later reported that “my mother gave birth to twins: myself and fear.” His childhood is almost a complete blank, and his mother’s name is unknown. His father, also named Thomas, was the vicar of Charlton and Westport. Thomas Hobbes Sr. had an older brother, Francis Hobbes, who was a wealthy merchant with no family of his own. Thomas Hobbes, the younger, had one brother Edmund who was about two years older than he. Thomas Sr. abandoned his wife, two sons and a daughter, leaving them in the care of his brother, Francis, when he was forced to flee to London after being involved in a fight with a clergyman outside his own church. Hobbes was educated at Westport church from the age of four, passed to the Malmesbury school and then to a private school kept by a young man named Robert Latimer, a graduate of the University of Oxford. Hobbes was a good pupil, and around 1603 he went up to Magdalen Hall, which is most closely related to Hertford College, Oxford.

Hobbes was not born into a rich family and his early life was somewhat precarious. However, like many of the middle and upper-middle class of today, he had access to centers of credentialism and sophistry aka universities. It is therefore very likely that Hobbes always saw the attainment of elite-approved credentials and subservience to their power as the only realistic way to maintain a somewhat nice and stable lifestyle.

Everything that Hobbes ever said, wrote or argued about must therefore be seen through the lens of his own timid, conformist and sophistic persona. To put it another way, he was an enthusiastic mercenary for anybody who held out the promise of a bit more money, social status and a nice sinecure.

Now let us move on to a critical analysis of the validity of his writings. But before we do that, let me quickly talk about why destroying his reputation is necessary- even 300 years after his death. The arguments put forth in the writings of Hobbes are one of the foundations of modern CONservativism and many other -isms. They, in both their original as well as recycled forms, have been used to justify a variety of socio-economic systems that have brought nothing but impoverishment, extreme misery, starvation and disease to the vast majority of people while greatly enriching a few lucky sociopaths.

One the central arguments in his writings is the idea that all people are highly immoral and only an absolute monopoly of violent force in the hands of a few chosen ones can keep society stable. In some respects his ideas are remarkably similar to those used to justify Chinese-style Legalism. But are most people highly immoral and does monopolizing violent force in the hands of a chosen few really improve the living standards of most people in that society?

While I am certainly not a believer in the myth of noble savages, there is a large body of evidence that hunter-gatherers living in non-precarious environments were not especially avaricious, inhospitable or murderous. Indeed, the lack of centralized authority in such systems makes peaceful inter-group cooperation, diplomacy and exchanges more necessary than it would otherwise be. So the idea that most people will trick, steal from and murder each other without someone in charge is a sophistic lie, projection of the thinker’s own mindset or likely both.

And this brings us to the second part of that particular argument- namely that giving the monopoly of violence to a few “especially suitable” people will make somehow society more stable and better. But how can we decide who is suitable to wield such power and how do we know they are competent? Is there any evidence that supposedly “legitimate” kings are any more competent that those who became kings through less “legitimate” means? How can we define the competence to “rule” when most societies with kings or their secular equivalents (dictators and leaders of one-party systems) are really bad places to be born, or live, in- at least for the vast majority of people?

I am sure that most of you are aware that the material living standards of “civilized” people have been consistently and significantly lower than their hunter-gatherer counterparts except for the last 100-odd years. Moreover the general rise of living standards over the last hundred years are linked to the rise of technology and simultaneous decline of outright autocracy.

The two central foundations of Hobbes worldview therefore have no basis in reality. They do however tell us a lot about his worldview and those of his paymasters.

But why would Hobbes spend so much time and effort on creating this myth? There are those who would like to believe that his worldview was simply a product of the environment he grew up in. I am not so sure and here is why. His early life history suggests that Hobbes had no useful skills beyond learning, conforming and pleasing his superiors. It is also obvious that he always wanted a comfortable and stable lifestyle. So how does a reasonably clever and timid man make a stable and comfortable living in the pre-industrial era?

Obtaining royal (or elite patronage) was the only realistic and feasible occupational choice for a person of Hobbes ability, temperament and desires. In other words, he had to choice to suck elite cock and live reasonably well or not do so and live like an average (poor) person.

Now.. I am not criticizing his decision to suck elite cock to make a stable, decent and trouble-free living. Pretty much anybody in his situation would have done the same. My real problem with Hobbes is that his works are still seen as serious and objective philosophical insights rather than as literary blowjobs to his masters. Doing so is the equivalent of using the collected reminiscences of a house slave as a defense and justification for the institution of slavery.

Hobbes was essentially a clever house slave who got better food, clothing and living quarters because of his ability to flatter his master, justify his brutality and constantly tell him how all those other “lazy and evil” slaves would be lost without the “benevolent guidance” of his master.

What do you think? Comments?

Profit, unlike Gain, is a Measure of Theft from the System

March 24, 2014 7 comments

The idea that profit-driven capitalism is the only system capable of delivering sustained improvement in living standards is a deeply cherished belief of many Americans, despite considerable evidence to the contrary. Some of you might even argue that the dissolution of the Soviet Union is definitive evidence of that ‘there is not other way’. Of course, doing so would require us to ignore that state communism did take Russia from a chaotic 19th century society to a superpower within 30 years, inspite of the massive damages inflicted by Stalin’s paranoia and WW2.

We would also have to ignore that the massive and unprecedented increase in the standard of living in the USA from the mid-1930s to mid-1980s was largely financed by direct and indirect government spending. Imagine an American middle-class without the New Deal, WW2-related spending, GI Bill, Space Race and all other Cold War related spending. But this is not a post about which flavor of capitalism is better than which flavor of state communism. Instead I will try to show how one of the fundamental proxy measures of success in capitalism (and state communism) eventually up destroying them.

I am certainly not the first to point out that monetary profit is fundamentally a measure of theft from other people or groups. However unlike many others, I am more interested in its downstream and knockon effects than the morality and mindset of those who benefit from it. There is also the interesting issue of why capitalism seems to “work” as long as it is kept under control, but becomes destructive to almost everybody once it is unregulated. In my opinion, all of this comes down to difference between profit and gain.

Some of you will counter by saying that “but aren’t profit and gain two words for the same thing”. Well.. not quite and let me explain. We use the word profit to denote a situation where one party benefits at the expense of another party. It is fundamentally impossible for all the parties involved in a profitable transaction to gain from it and is therefore a zero-sum interaction. Now contrast that an interaction where some parties gain more than others but pretty much everybody gets a pretty good and fair deal. Still confused? Let us look at some examples.

Consider the case of a generic multinational corporation which has managed to increase its reported profit by off-shoring its manufacturing base to a low-income country. So who are the winners and losers in this type of scenario? The biggest winners in this scenario are almost always the top-level management, large stockholders and those involved in the financial (and other) intermediation necessary to make it happen. Minor winners include the poorly paid workers in the low-income countries now working at a slightly better paying job and the consumers who benefit from a slightly cheaper product. So who are the big losers in this transaction? Well.. everybody else- starting from the unemployed workers to local business who depended on those workers and the local governments who depended on tax revenue from those workers, business and the corporation.

Now consider the case of a company, business or an institution developing a new way to fulfill some human need or desire. How many people were negatively affected by the development of computer technology? What about antibiotic drugs? What about better automobiles or airplanes? What about effective vaccines for diseases like polio? In each of the above examples, pretty much everybody benefited (or gained) far more than they lost. Moreover each of these products increased the size of the economy without a significant increase in income inequality. That is the important, and crucial difference, between profit and gain. You might also notice that my description of gain is pretty close to most peoples mental image of functional capitalism.

So why is gain-based capitalism in full retreat and why has its profit-based form taken over?

It comes down to concentration of power in the hands of a few large players or oligopolization. Capitalism, or indeed any other system, works best when there are many and almost equally capable competing players in the system. That is also why capitalism seems to function pretty well when a new area opens up for business. But sooner or later you will end up with a handful of major players who will dominate the new area.

But why would narrowing the list of players favor profit over gain. Well.. once again there are many interrelated reasons but they all arise from one characteristic common to all large human organisations- who runs them. The higher levels of large and established organisations are almost always dominated by sociopaths who have learned to climb the pyramid by stepping on others. These climbers often have no understanding of what it takes to make the enterprises they are leading function properly, nor are they interested in making them function properly.

The mindset of these sociopaths is dominated by two interlinked desires. Firstly, they want to subjugate and impoverish everyone else. Secondly, they want to do so while basking in material comfort. They have no interest, desire or even the mental ability to be anything else. These billionaires, “business leaders”, CEOs, board members, banksters, head honchos etc are functionally identical to parasites or viruses in that they both lack a purpose for existence and an internal ability to restrain themselves. They survive and thrive by exploiting the structure of the system and eluding systemic attempts to destroy them. But why are they so interested in generating more profit and suppressing gain? The answer to that question lies in what happens to monetary profit once it is generated.

Monetary profit, unlike gain, is almost never reinvested back into the system. In other words, all money made as profit exits the functional economy and impoverishes everybody else.

Only sovereign governments can replenish this supply of money. It is therefore not surprising that billionaires and other rich people spend lots of their time making sure that the government does not replenish this supply or that they get most of that replenishment. It is not about more money for them, as much as it is about less money for everybody else. Of course, it certainly helps that they have a whole bunch of morons to do their dirty work.

What do you think? Comments?

Film Remakes, Sequels, Prequels and the True Nature of Capitalism

March 1, 2014 8 comments

Have you ever wondered why mainstream movie-making in the last twenty years has gravitated towards remakes, sequels and prequels of previously successful movies? Why do movie studios keep on making newer version of old hits? What is purpose of making progressively inferior sequels or prequels of questionable quality? Now there are some who would say that all literature, theater and cinema is derivative (cleverly plagiarized and recycled) and there is some truth to that. But that is not what I am talking about. Let me explain my point with a few examples.

The original Star Wars and lords of the rings franchises are indeed clever rehashes of epics centered around reluctant hero trope. Furthermore, such epic stories are found across diverse cultures and eras. However reading the Odyssey, Scandinavian sagas or even the much earlier Epic of Gilgamesh does not diminish the enjoyment of watching the original star wars films or the LOTR trilogy because while they all have the same basic story structure, each one takes great effort to create and populate its own unique and self-consistent universe. Similarly modern superhero characters have more than a passing resemblance to the trans-human/semi-divine characters that populate ancient myths and stories. Yet once again, the creators of most modern superhero characters took considerable effort to make them and the worlds they inhabit as unique and richly detailed as possible.

Now contrast this level of creativity and effort to that seen (or not seen) in the Star Wars and LOTR “prequels”. Or take movie remakes- Why do most modern movie remakes and sequels suck so badly? Compare the original Robocop movie to its recent remake. Or compare the remake of Total recall to its far more innovative original version. This is not to say that every remake, prequel or sequel sucks. There are examples where the reboot was as good or better than the original such as Scarface (1983 vs 1932) or the Mummy (1999 vs 1932). Note that both examples of successful remakes mentioned in the previous sentence were quite different from the original versions. Having said that movies in which the remake, sequel or prequel are better than the original are exceptions and not the rule.

But why is that so and what does it have to do with the true nature of capitalism?

The short answer to that question is as follows- trying to relentlessly increase and optimize monetary profits from any new source of income will always kill the proverbial golden egg laying goose. The somewhat longer answer to that question requires us to first take an honest look at what capitalism (or any other materialism based -ism) is really about.

In the preceding paragraph, I hinted that the tendency of capitalism to kill golden egg laying geese is shared by other material-based ideologies (such as state communism). But why would that be so? Aren’t materialism based ideologies more “scientific” and therefore superior to other ways of looking at the world? Well.. it depends and here is why.

Materialism based (reductionist) models work best when the systems are small in size, fundamental in nature and/or tractable. So materialism based models are perfect for doing things such as predicting the motion of planets, understanding the physical nature of matter, launching artificial satellites, synthesizing some new chemical compound or designing a new engine or vehicle. Their predictive value starts to decrease as the systems become more complex or chaotic- yet they are still quite useful for understanding phenomena as diverse as biological evolution, speciation or weather systems. Reductionist models however reach the end of their usefulness when we enter the realms of complex, fundamentally unstable and adaptive systems such as human societies.

Models based in reductionism work well only as long as the fundamental components of the system and interactions between are constant, predictable and measurable. We simply cannot do that with human societies of even basic complexity. This is where reductionist thinkers make two fundamental errors.

Firstly, they try to use an external and artificial standard unit (money) to keep track of exchanges in the system. While the amounts of money exchanged might initially have some correlation to the actual value of most interactions in the system- it always reaches a point where the amounts exchanged between components in the system has little (or no) correlation to the actual value of the interactions. However the quantity and flow of money in the system are now increasingly seen as the only legitimate measure of value of anything or any person in the system. Money becomes a proxy measure for something it can no longer be accurately used to measure.

The triumph of money as the only way to measure the worth of anything results in the second type of reductionist error. The quest for more money results in the ever-increasing use of reductionist models (and thinking) to optimize interactions and actions. It is this mindset that leads to mediocre, insipid or just plain shitty movie remakes, sequels and prequels- while simultaneously starving truly innovative ideas and concepts. The people who make decisions about movie funding therefore have little interest in the quality or craft of the final product. They are principally motivated by the predicted monetary returns on their ill-gained money.

That is why capitalism, communism and all other reductionist -isms, which use artificial gameable proxy units, to model the real world ultimately end up destroying the very things that make their existence possible.

What do you think? Comments?


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