“economics”
59 posts under this tag.
I went to Mikhail Bakunin’s God and the State to read his famous boot-master quote straight from the source. As it often happens, the quote makes no justice to its context, which now follows. This is lucidness embodied—”simplicity that is clarity, the light of intelligence.”
Does it follow that I reject all authority? Far from me such a thought. In the matter of boots, I refer to the authority of the bootmaker; concerning houses, canals, or railroads, I consult that of the architect or the engineer. For such or such special knowledge I apply to such or such a savant. But I allow neither the bootmaker nor the architect nor the savant to impose his authority upon me. I listen to them freely and with all the respect merited by their intelligence, their character, their knowledge, reserving always my incontestable right of criticism and censure. I do not content myself with consulting a single authority in any special branch; I consult several; I compare their opinions, and choose that which seems to me the soundest. But I recognise no infallible authority, even in special questions; consequently, whatever respect I may have for the honesty and the sincerity of such or such an individual, I have no absolute faith in any person. Such a faith would be fatal to my reason, to my liberty, and even to the success of my undertakings; it would immediately transform me into a stupid slave, an instrument of the will and interests of others.
If I bow before the authority of the specialists and avow my readiness to follow, to a certain extent and as long as may seem to me necessary, their indications and even their directions, it is because their authority is imposed on me by no one, neither by men nor by God. Otherwise I would repel them with horror, and bid the devil take their counsels, their directions, and their services, certain that they would make me pay, by the loss of my liberty and self-respect, for such scraps of truth, wrapped in a multitude of lies, as they might give me.
I bow before the authority of special men because it is imposed on me by my own reason. I am conscious of my own inability to grasp, in all its detail, and positive development, any very large portion of human knowledge. The greatest intelligence would not be equal to a comprehension of the whole. Thence results, for science as well as for industry, the necessity of the division and association of labour. I receive and I give—such is human life. Each directs and is directed in his turn. Therefore there is no fixed and constant authority, but a continual exchange of mutual, temporary, and, above all, voluntary authority and subordination.
This same reason forbids me, then, to recognise a fixed, constant and universal authority, because there is no universal man, no man capable of grasping in all that wealth of detail, without which the application of science to life is impossible, all the sciences, all the branches of social life. And if such universality could ever be realised in a single man, and if he wished to take advantage thereof to impose his authority upon us, it would be necessary to drive this man out of society, because his authority would inevitably reduce all the others to slavery and imbecility. I do not think that society ought to maltreat men of genius as it has done hitherto: but neither do I think it should indulge them too far, still less accord them any privileges or exclusive rights whatsoever; and that for three reasons: first, because it would often mistake a charlatan for a man of genius; second, because, through such a system of privileges, it might transform into a charlatan even a real man of genius, demoralise him, and degrade him; and, finally, because it would establish a master over itself.
Get this: I love the net. There are few human inventions I treasure more; damn, there are few things I treasure more. Consciousness predated the net only by a slight margin in my life, and I can’t help but be a part of the translucent generation it has engendered, the first generation whose values have been shaped by the net.
Yet, I fail to understand what all the brouhaha regarding net neutrality is all about. Of course I’m moved by all the calls to action and won’t-somebody-please-think-of-the-children threats of impending netdoom, but I fail to see the real problem, the “great injustice”. And beneath the obvious good intentions, the rhetoric with which this argument is being fought by “my side”, the side of prominent netheads (Google’s Vint Cerf for instance), reeks of governmentism, stasism, and don’t-let-walmart-wreck-your-downtown anti-capitalistic sentiment—not my cup of tea.
Frankly, it all seems to me as articulate special-interest groups arguing for the right to impose their vision of the net on telcoms. This may well be the net’s first reactionary upheaval of nostalgia and status quo1, the first symptom of the sclerosis that plagues every human institution. An end-to-end internet is one of the greatest accomplishments of modernity, a vision I personally cherish, and the one that has successfully guided the web up ‘til now—granted. But that doesn’t mean I want it imposed on others, it doesn’t mean that we shouldn’t allow others to experiment with new visions. If we really cherish it so much, shouldn’t we be willing2 to pay for it its true economic price? If it is truly the one best way, shouldn’t it be able to survive competition on its own merits? It seems like a particularly devious contradiction to call net intervention net neutrality.
With this in mind, it was a blow of fresh air to find T. J. Rogers recent opinion on the issue:
What do you think of Net neutrality?
This is where basically the Net is not allowed to discriminate? I think it’s an obscenity. I think people that have paid for the wires and cables should be able to charge whatever they want for their product. And for other people to come in and force companies to run their businesses and set their prices is absurd. If some of those companies came into being by virtue of a government monopoly—the old AT&T comes to mind—then fine. But to go and tell companies what they can and cannot charge money for—that’s un-American. It’s against freedom. It’s just bad news.
It was only later that I found out why Rodgers sounded so rational: he’s a libertarian. Also to treasure from that interview is this fragment:
Some claim they [CIGS, a type of non-silicon cell] are close to equal to silicon in terms of efficiency.
You go buy one. You know, that’s another problem we’ve got in the industry. There are a lot of con men in the solar industry who say a lot of things that are really, really, very wrong.
Every libertarian I’ve known of has had this respect for personal, boot-maker, contextual, decentralized knowledge, this hard social virtue of refraining from telling other people what to do (expressed even more clearly later in the interview: “I don’t want to second-guess the people that are trying—I’m not an expert—and they’ll surprise you when they do.”). They all recognize the world’s complexity and the great problems of our models of it. So yeah, I liked this guy. I googled him and I found out this most-interesting open letter from him and a book of his on Amazon, No-Excuses Management, that I promptly ordered.
Anyway, back on topic, what do you think on net neutrality? What am I failing to see from this tangle? Why do so many smart, visionary people oppose it?
Lalo—who taught me, with passion, Mexican history and economical development in high school—used to talk somewhat mockingly of some of his scientist friends who lived isolated from the world and, particularly, from politics; they thought themselves beyond it and preferred to live their lifes pondering deep thoughts back in their ebony towers; “they wouldn’t realize a political revolution had arrived until they were shot,” or something along those lines.
I agreed with it then and promptly forgot it with gusto when it was my turn to think deep thoughts in the ebony towers of CIMAT, where I studied Mathematics for some years. These days of alleged post-electoral unrest in Mexico, when most anyone in the country is fed up with politics, and politicians are having a hard time leaving their six-yearly limelight, I remember those words.
A few months ago, coming back to my old high-school and chancing on Lalo, it was interesting to discover his complete isolation from technology, and, particularly, from the web. He used his computer exclusively for email, never searched, had no idea what a blog was, didn’t know about Wikipedia, and in general didn’t think much of digital contraptions of any sort (!).
That may have had a lot to do with age but my point is that he was missing on one most important sphere (my preferred one, of course). “He wouldn’t know the singularity had arrived until he were absorbed into computronium”—or something alone those lines.
Of course I’m exaggerating, but I neither want to mock Lalo nor defend single-minded obsesiveness. It’s just that the preponderance argument could be made on many, many other spheres of life—economy, finance, culture, ecology, art, design, animal trainers… The world is far vaster and far more complex than we like to acknowledge, and we all suffer from interest myopia (the farther from our interests something is, the fainter and blurrier it is in our picture). Arguing for the preponderance of one sphere is usually self-interest lobbying.
The recent and thankfully past presidential campaign in Mexico was a bizarre spectacle of major rifts in each of the 4 major parties. So important they were, it is not far-fetched to imagine that had a party managed to avoid them it would have been an easy victor. The ruling party, the PAN, was torn at the beginning between the incumbent’s pre-candidate, Santiago Creel, and the party’s one, Felipe Calderon; the PRD between the Cardenas family and Lopez Obrador; the PRI between Madrazo and Elba Esther Gordillo.
And that was all childish bickering compared to the hard, unprecedentedly dirty fights between parties. The race had simply never been this close.
It all made for grisly headlines, nauseating TV spots, debilitating internecine wars, and tiring discussion in every reunion you care to name. But now that’s past I can’t help but think of it as progress. You may call me naive or unsophisticated but I’ve oft thought, in what I do not believe to be my least lucid times1, that if there is such a thing as progress in politics it is nothing but the fragmentation of power2.
Yes, fragmentation can be ugly, and noisy, and wasteful, (particularly at its early stages) but we only know one answer to the ancient Latin question of “Quis custodiet ipsos custodes?” (Who shall guard the guards themselves?”) and it is ”each to one another” (Can someone please translate this to Latin?). No matter what convoluted system, ideology, rules, mechanisms, or technologies of any sort we throw into the mix, it always comes down to the people that implement them, “it’s always a people problem.” In fact, the most that can be said in defense of a system is that it fragments the power to do wrong between many people.
Take the Federal Electoral Institute (IFE) If it deserves any credibility (and I think it does) it is not because our voting technology ranks among the most sophisticated and expensive in the world (it does) but because there are deputies of every party3 physically overseeing every step of the electoral process.
A tiny example of context wealth creation.
A couple of months ago a prim little supermarket called Merkabastos opened 2 minutes away from my house. The store has been deservedly a hit around the neighborhood and now it battles with the oh-so-common problem of finding parking space for its customers.
Enter a pretty much vacant lot right across the street. Thru the years I’d seen it remain unused until some years ago it began to store construction machinery, and some years later they put a billboard on it (whose first customer, I might add, was the table dance on the other side of the beltway).
Anyway, what was bound to happen, happened: the Merkabastos management are renting the place as a parking lot for their customers and I find it amusing to think that the owner of the lot didn’t need to lift a finger to start earning a rent for her barren property.
But the strongest outrage was reserved for the film’s final scene, in which Gallo’s character finally meets up with his ex-lover (Chloë Sevigny), and she performs unsimulated fellatio upon him.. Sevigny, already known for taking on controversial roles, had been a real-life girlfriend of Gallo’s. Notably, after the film’s release, the William Morris Agency dropped her as a client, claiming the scene made her unmarketable; she quickly signed with another agency and has continued her acting career despite fears to the contrary.
The quiet last line of this paragraph is a pearl of capitalist freedom that could so easily pass unnoticed, taken-for-granted. If Chloë was able to do what she did was only because she wasn’t tied to prude William Morris, one of the largest talent agencies in the world; it was only because there were other agencies more than willing to take her in.
Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy.
Friedrich Hayek, The Road to Serfdom
What a wonderful world to live in, isn’t it? One in which puritans can be self-righteous while we enjoy watching a purdy gal blow her ex-boyfriend.
Platicaba antier con Adolfo en el Starbucks cerca del TEC y como enseguida tenia el una conferencia sobre la pobreza, decidi acompañarlo. Me dio mucho gusto ver que la conferencia la organizaba y conducia Lalo, uno de los mejores maestros de mi prepa, pero la conferencia en si fue perfectamente olvidable: los mismos lugares comunes de siempre, el mismo rollo, el mismo izquierdismo self-righteous, los mismos rezagos ancestrales, las mismas discusiones bizantinas (Cuantos tipos de pobreza hay? Son mejores los programas universalistas que los focalizados? Como definimos indigena? Cuantos angeles caben en la cabeza de un alfiler?).
En medio del choro mareador de uno de los ponentes oi la gastadisima frase “inequidad en la distribucion de la riqueza” y alguna minuscula sinapsis debio unir a dos neuronas olvidadas, pues vi de repente la concepcion (en mi opinion erronea) de la riqueza que esa oracion implicaba. Ya en mi casa repase los ensayos de Paul Graham y, efectivamente, es un ensayo suyo, Mind The Gap, el que maravillosamente desenmascara y desacredita esta concepcion (que el llama el Modelo Papi de la Riqueza):
When I was five I thought electricity was created by electric sockets. I didn’t realize there were power plants out there generating it. Likewise, it doesn’t occur to most kids that wealth is something that has to be generated. It seems to be something that flows from parents.
Because of the circumstances in which they encounter it, children tend to misunderstand wealth. They confuse it with money. They think that there is a fixed amount of it. And they think of it as something that’s distributed by authorities (and so should be distributed equally), rather than something that has to be created (and might be created unequally).
En fin, se lo comente a Adolfo (rayandole su cuaderno) y el me contesto con su ya famoso “Ashh…”©, pero aun asi me motivo a hacerles el comentario a los ponentes (darle valor a otra gente es la cosa mas facil del mundo). Cuando (dei gratia) acabo la conferencia y llego la hora de las preguntas, dije lo siguiente (o algo muy parecido, el original quedo escrito en la libreta de Adolfo):
Que tal Lalo? ... Bueno, lo mio no es una pregunta sino un comentario breve. Se me hace curioso, y es algo tipico de los academicos, la forma en que articulan su pensamiento sobre la pobreza. Dicen cosas como “la inequidad en la distribucion de la riqueza”, como si la riqueza fuera un pastel que le toca a papa gobierno distribuir, y nunca “inequidad en la generacion de riqueza”. Bueno… eso es todo. Sobretodo para… que lo piensen.
Silencio. Mi corazon golpeteaba y yo solo agradecia no haber tartamudeado severamente. Creo que oi un “Uhhhhhh” de “Tomen eso!” de alguien del auditorio. Adolfo dice que oyo un aplauso aislado. Mas silencio. Lalo interviene, levantando por fin su mirada de mi y llevandola al punto de fuga, “Alguien mas tiene otra pregunta?”.
Haciendo mandados, me toco platicar hoy con una señora que dirige un cibercafe mientras los dos haciamos fila. Le pregunte sobre su negocio y dos cosas me llamaron mucho la atencion. La primera es que un cibercafe gasta mas, mucho mas, en luz que en el internet mismo. Mientras que esta señora pagaba 650 pesos por internet al mes, la luz le salia de 2,600 a 3,000 pesos—casi 5 veces mas. Asi que lo que uno paga es mas bien la electricidad, no el internet. En vez de cibercafes deberian pues llamarlos electrocafes.
La otra cosa que me intereso fue que los cibercafes locales se aliaron para fijar el precio minimo por una hora de internet (12 pesos, si mal no recuerdo). Que, segun eso, a menos no les sale. Lo que no alcanzo a entender es porque necesitan imponer un precio minimo. Si alguien lo da a ese precio y no le sale, pues alla su problema si quiere regalar su dinero, no? Me recuerda una platica con un taxista que me decia que si no estuvieran restringidas las licencias para taxis, habria tanta competencia que ya para nadie saldria. Sera?
Bueno, hubo una cosa mas, una meta-cosa, que tambien me llamo la atencion en la platica: cuanto puede enseñarte una conversacion casual sobre esferas tan distantes a las tuyas.
The other day I had a weird idea for a reputation market (that’s right, a reputation market!) and ever since, I’ve been exploring how value is created and expressed in a capitalist society. My investigations have led me, of course, to that quintessential example of wealth-creation, the scam. Nothing that I’ve read on the subject (not even the Million Dollar homepage :) has impressed me more than this long, old, but fascinating article: Have You Ever Tried to Sell a Diamond?
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