Princeton Study Finds That The US Is An Oligarchy

"Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant--that all you really need to know are a few simple ideas! Quite a few supply-siders have created for themselves a wonderful alternative intellectual history in which John Maynard Keynes was a fraud, Paul Samuelson and even Milton Friedman are fools, and the true line of deep economic thought runs from Adam Smith through obscure turn-of-the-century Austrians straight to them."--Paul Krugman

"As labor markets have become increasingly laissez-faire markets, inequality has widened apace. The benign view of this phenomenon holds that skills, at last, are being rewarded appropriately. A more skeptical view holds that income extremes are now far beyond any degree necessary to reward diligence or innovation; that the negative social consequences on inequality far outweigh the gains to allocative efficiency; and that the extreme income inequality associated with pure markets, far from being a source of efficiency, is one more serious blemish of laissez-faire society and one more social calamity wrought by pure markets."--Robert Kuttner, "The Limits Of Markets"

"Markets are interested in profits and profits only; service, quality, and general affluence are different functions altogether. The universal, democratic prosperity that Americans now look back to with such nostalgia was achieved only by a colossal reigning in of markets, by the gargantuan effort of mass, popular organizations like labor unions and of the people themselves, working through a series of democratically elected governments not daunted by the myths of the market."--Thomas Frank, "One Market Under God"

"One of the most extraordinary examples in recent decades [of unitary visions of constitutional enterprise] is found in a book called "Takings"... Epstein makes an extremely clever but stunningly reductionist argument that the whole Constitution is really designed to protect private property... Can a constitution reflecting as diverse an array of visions and aspirations as ours really be reducible to such a sadly single-minded vision as that?"--Lawrence Tribe and Michael Dorf, "On Reading The Constitution"

"I find it interesting that libertarians never picked up on the fact that when the British ran Hong Kong, they decided not to live under that kind of system in their own country. For some reason Western libertarians want to admire these experiments in laissez faire, anarcho-Somalianism and Hoppean monarchy at arm's length, while they enjoy the benefits of living in the developed democratic countries where they nurture their strange grievances against government."--Mark Plus

"Most obviously in need of amendment is the view that minimally managed and regulated markets are both more stable and more dynamic than those subject to extensive government intervention. The Thatcherite assumption, in other words, was that government failure is far more menacing to prosperity than market failure. This was always bad history. The record shows that the period 1950-73, when government intervention in market economies was at its peacetime height, was uniquely successful economically, with no global recessions and faster rates of GDP growth -- and growth of GDP per capita -- than in any comparable period before or since."--Robert Skidelsky, Anatomy of Thatcherism

"I can't resist telling you that when the Vienna Economics Institute celebrated its centennial, many years ago, they invited, as their keynote speaker, my father [John Kenneth Galbraith]. The leading economists of the Austrian school-- including von Hayek and von Haberler -- returned for the occasion. And so my father took a moment to reflect on the economic triumphs of the Austrian Republic since the war, which, he said, 'would not have been possible without the contribution of these men.' They nodded -- briefly -- until it dawned on them what he meant. They'd all left the country in the 1930s."
James K. Galbraith

"Why are there no libertarian countries? If libertarians are correct in claiming that they understand how best to organize a modern society, how is it that not a single country in the world in the early twenty-first century is organized along libertarian lines?

It’s not as though there were a shortage of countries to experiment with libertarianism. There are 193 sovereign state members of the United Nations—195, if you count the Vatican and Palestine, which have been granted observer status by the world organization. If libertarianism was a good idea, wouldn’t at least one country have tried it? Wouldn’t there be at least one country, out of nearly two hundred, with minimal government, free trade, open borders, decriminalized drugs, no welfare state and no public education system?...

...It’s a seductive vision—enjoying the same quality of life that today’s heavily-governed rich nations enjoy, with lower taxes and less regulation. The vision is so seductive, in fact, that we are forced to return to the question with which we began: if libertarianism is not only appealing but plausible, why hasn’t any country anywhere in the world ever tried it?
--Michael Lind, "The Question Libertarians Just Can’t Answer"

"Rats and roaches live by competition under the laws of supply and demand. It is the privilege of human beings to live under the laws of justice and mercy."--Wendell Berry

"Let me just point out that middle-class America didn't emerge by accident. It was created by what has been called the Great Compression of incomes that took place during World War II, and sustained for a generation by social norms that favored equality, strong labor unions and progressive taxation. Since the 1970's, all of those sustaining forces have lost their power. Since 1980 in particular, U.S. government policies have consistently favored the wealthy at the expense of working families - and under the current administration, that favoritism has become extreme and relentless. From tax cuts that favor the rich to bankruptcy "reform" that punishes the unlucky, almost every domestic policy seems intended to accelerate our march back to the robber baron era. It's not a pretty picture - which is why right-wing partisans try so hard to discredit anyone who tries to explain to the public what's going on."
--Paul Krugman, Losing Our Country

"If you have loosened the stone libertarian mind-vise enough to admit that there is such a thing as a market failure, and enough intelligence or education to understand that market failure is a technical property of a good or service and implies no rap on markets, you will be OK with the idea that government is exactly the right agency with which to get stuff we want that the market won't supply (enough of) by itself, and to avoid stuff we don't want, like pollution, that the market will overproduce. If you have a heart, you will also be OK with ideas like "death by starvation is cruel and excessive punishment for 'not having been able to save enough to retire on', even for 'having been too careless to save enough', certainly for 'having been unlucky enough to be smitten by illness or accident'" and you will find government is also well suited to correct some important unfairness and injustice, even when the best it can do along these lines entails some moral hazard and bad incentives. It's worth noting that absent slavery, every productive activity, whether managed (or obligated) by government or by private enterprise, is in the end carried out in the private sector: public schools are built by private contractors, and government workers are economically just small private businesses with no employees."
--Michael O'Hare, Right-sizing Government

"...Austrian economics very much has the psychology of a cult. Its devotees believe that they have access to a truth that generations of mainstream economists have somehow failed to discern; they go wild at any suggestion that maybe they’re the ones who have an intellectual blind spot. And as with all cults, the failure of prophecy — in this case, the prophecy of soaring inflation from deficits and monetary expansion — only strengthens the determination of the faithful to uphold the faith.
It would be sort of funny if it weren’t for the fact that this cult has large influence within the GOP."--Paul Krugman

In my mind, quoting Paul Krugman approvingly shows not only that one has very little intelligence, it's almost guaranteed the person quoting him has all sorts of psychological disorders.

narouz said:

"I find it interesting that libertarians never picked up on the fact that when the British ran Hong Kong, they decided not to live under that kind of system in their own country. For some reason Western libertarians want to admire these experiments in laissez faire, anarcho-Somalianism and Hoppean monarchy at arm's length, while they enjoy the benefits of living in the developed democratic countries where they nurture their strange grievances against government."--Mark Plus

Click to expand...

Libertarians live in all countries, there are libertarian movements in the poorest and most backward such as Venezuela and also in rich places like Hong Kong and Singapur. "Western" libertarians have the same beliefs in favor of private property as libertarians in other countries. What an stunningly idiotic statement.

Mainstream economists are to be taken as seriously, if not less seriously than mainstream doctors. The peculiar brand of alchemy they preach is particularly laughable. At face value, if we really could improve the standard of living by increasing the minimum wage, for example, why do they stop at such low prices? Why don't they advocate $100/hour for everyone? Why not a million? If wealth does not depend upon the capital structure brought into existence by property rights and the information which prices that result from voluntary exchange communicate about this structure, but instead depends on an academic's recommended legislation, they really are selling us short by recommending anything less than $1 billion/hour as a minimum wage. The fact that they don't do this suggests that they do in fact think that prices are determined by supply and demand and that they are simply happy to sacrifice the livelihood of those the marginal productivity of whom falls below the price floor in order to achieve popularity and grant money via morally uninhibited demagoguery.

Now, if we take this logic further and accept that poverty is the result of a lack of Keynesian economic stimulus, we have to ask why poverty continues to exist. Plenty of countries have attempted to take themselves to Keynesian paradise via the printing press. I don't know of any paradise, but examples of poverty and hyperinflation abound. Moreover, why is it considered counterfeiting when individuals debase the currency? Surely, the economic establishment ought to cheer this on, as counterfeiters are stimulating the economy in the way the Fed really ought to be. Again, to reject these propositions suggests that these factors really are determined by demand and supply, and once more we arrive in the realm of theoretical discussion, upon which I will later elaborate.

Finally, if academics really are fit to determine what the price of labour, or the supply of money ought to be, there seems no principled reason not to stop at outright socialism. For, if they are able to determine what the interest rate ought to be presently in order to maximise utility (whose utility to maximise, how to know whether it has in fact been maximised, when ought it to be maximised are all questions that need to be answered), they are ultimately saying they are fit to determine what the entire capital structure ought to be, as you can't know what the interest rate ought to be unless you have some equilibrium model to which you think that interest rate will and should tend. Now, to say that they know what the capital structure ought to be is to say that you shouldn't be able to make choices, because the capital structure implies everything which every individual spends his day doing. The economists are declaring that you shouldn't have a choice; that they ought to be able to micromanage every aspect of your personal life. They are advocating the old Marxist idea that the capitalist 'anarchy of production' ought to be replaced by a 'scientific', socialist mode of production. They are part of the authoritarian academic culture about which Peat has written so much.

narouz said:

"Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant--that all you really need to know are a few simple ideas! Quite a few supply-siders have created for themselves a wonderful alternative intellectual history in which John Maynard Keynes was a fraud, Paul Samuelson and even Milton Friedman are fools, and the true line of deep economic thought runs from Adam Smith through obscure turn-of-the-century Austrians straight to them."--Paul Krugman

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What is Krugman saying here but not to worry your little head with such lofty ideas as economics; you are not fit to comprehend them, leave them to us experts? Additionally, Keynesian economic theory is so vapid that you can't even accurately describe it as 'a few simple ideas'. A close reading of The General Theory reveals that he doesn't even have a grasp of basic economic theory, which is what enables him to chalk market crashes up to a self-perpetuating deflationary mania, the cure for which is inflation.

narouz said:

"As labor markets have become increasingly laissez-faire markets, inequality has widened apace. The benign view of this phenomenon holds that skills, at last, are being rewarded appropriately. A more skeptical view holds that income extremes are now far beyond any degree necessary to reward diligence or innovation; that the negative social consequences on inequality far outweigh the gains to allocative efficiency; and that the extreme income inequality associated with pure markets, far from being a source of efficiency, is one more serious blemish of laissez-faire society and one more social calamity wrought by pure markets."--Robert Kuttner, "The Limits Of Markets"

Click to expand...

Since at least World War I, labour markets in the western world have become increasingly more regulated and cartelised. Under laissez-faire, there is a tendency toward the equalisation of wage rates. Additionally, laissez-faire implies free banking, which most likely will result in a commodity standard in a limited supply (if you want to argue this, fair enough, but the mainstream economists oppose free banking precisely because they think this is its result); this implies consistent deflation. Ergo, laissez-faire implies equalising wage rates and lower prices. How does this increase inequality? People with power and authority under our system hate laissez faire because they fear that some of this will be taken away from them, and given to you.

narouz said:

"Markets are interested in profits and profits only; service, quality, and general affluence are different functions altogether. The universal, democratic prosperity that Americans now look back to with such nostalgia was achieved only by a colossal reigning in of markets, by the gargantuan effort of mass, popular organizations like labor unions and of the people themselves, working through a series of democratically elected governments not daunted by the myths of the market."--Thomas Frank, "One Market Under God"

Click to expand...

This author, like Keynes, is ignorant of basic economic theory. Service, quality and affluence are values. Values determine the demand for particular commodities. Profit is determined by the extent to which demand exceeds supply. If you can supply more things that people value (e.g. service, quality, affluence), you will profit and be capable of spending it on the types of things that the above author deems so valuable.

narouz said:

"One of the most extraordinary examples in recent decades [of unitary visions of constitutional enterprise] is found in a book called "Takings"... Epstein makes an extremely clever but stunningly reductionist argument that the whole Constitution is really designed to protect private property... Can a constitution reflecting as diverse an array of visions and aspirations as ours really be reducible to such as sadly single-minded vision as that?"--Lawrence Tribe and Michael Dorf, "On Reading The Constitution"

Click to expand...

The constitution is a piece of statist legislation. It is not clear why it should be of interest to libertarians, aside from providing some common ground upon which to converse with constitutionalists. Additionally, why is it sad that these ideas may be reducible to an ultimate principle? Could it be because this does away with the grave bogey men with which the politicians threaten you in order to content you with your servitude?

narouz said:

"I find it interesting that libertarians never picked up on the fact that when the British ran Hong Kong, they decided not to live under that kind of system in their own country. For some reason Western libertarians want to admire these experiments in laissez faire, anarcho-Somalianism and Hoppean monarchy at arm's length, while they enjoy the benefits of living in the developed democratic countries where they nurture their strange grievances against government."--Mark Plus

Click to expand...

This does not address any crucial theoretical aspect of the entire edifice of Rothbardian anarcho-capitalism. Additionally, the author is ignorant of the various ways in which libertarians are striving to internationalise themselves to experience some of the benefits of the above mentioned jurisdictions, and shield themselves from some of their (statist) drawbacks.

narouz said:

"Most obviously in need of amendment is the view that minimally managed and regulated markets are both more stable and more dynamic than those subject to extensive government intervention. The Thatcherite assumption, in other words, was that government failure is far more menacing to prosperity than market failure. This was always bad history. The record shows that the period 1950-73, when government intervention in market economies was at its peacetime height, was uniquely successful economically, with no global recessions and faster rates of GDP growth -- and growth of GDP per capita -- than in any comparable period before or since."--Robert Skidelsky, Anatomy of Thatcherism

Click to expand...

Here, the closest to an argument we are provided with is 'but history'. Now, in economics we can't observe counterfactuals; we can't see what would've happened if different policies were employed. Maybe we could compare one country's experience with that of another, but then, even in order to decide upon which country to look at, which trends to discount, which to investigate, we enter once more the realm of pure theory. The statist's consistent attempt to distract from the theory with 'data' should give us some clues about how well they perceive they will fair in a theoretical debate. Further, how do you decide upon which data to record? The phase of the moon (yes.... I know it has documented biological effects. Most economists don't)? The number of people employed? The price level? Which commodities should be included in the index named the price level? You cannot answer these questions without engaging with theory. Moreover, the empiricist-positivist cult of modern science has ensured that these people, under Milton Friedman's (amongst others') influence, believe that economics is a science that ought to be studied along those lines suggested by experimental physics. The project of physics necessitates that we expect that the causes which determine the behaviour of a particle will remain constant. Thus, we may derive from experience regularities in the sequence and concatenation of natural phenomena. To argue otherwise is to argue instead that our experience of the natural world is a kaleidic flux, with no intelligible determining principle. Human behaviour, on the other hand, is determined by values, and values change; thus people's behaviour changes. To attempt to deny this is impossible, for what of a social scientist who has accumulated data, done some esoteric mathematical manipulations and declared he has learnt a new law determing human behaviour? Has he not learnt something new, which will change his behaviour? Is it not clear that the very practise of 'empirical social science' is a performative contradiction?

narouz said:

"I can't resist telling you that when the Vienna Economics Institute celebrated its centennial, many years ago, they invited, as their keynote speaker, my father [John Kenneth Galbraith]. The leading economists of the Austrian school-- including von Hayek and von Haberler -- returned for the occasion. And so my father took a moment to reflect on the economic triumphs of the Austrian Republic since the war, which, he said, 'would not have been possible without the contribution of these men.' They nodded -- briefly -- until it dawned on them what he meant. They'd all left the country in the 1930s."
James K. Galbraith

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Austria is a prime of example of the result of state involvement in the supply of money, particularly Keynesian economic policy. This fate awaits the US, when the the consistent efforts of the Federal Reserve to destroy the last remaining value of the US dollar relieve it of its status as the world's reserve currrency.

narouz said:

"Why are there no libertarian countries? If libertarians are correct in claiming that they understand how best to organize a modern society, how is it that not a single country in the world in the early twenty-first century is organized along libertarian lines?

It’s not as though there were a shortage of countries to experiment with libertarianism. There are 193 sovereign state members of the United Nations—195, if you count the Vatican and Palestine, which have been granted observer status by the world organization. If libertarianism was a good idea, wouldn’t at least one country have tried it? Wouldn’t there be at least one country, out of nearly two hundred, with minimal government, free trade, open borders, decriminalized drugs, no welfare state and no public education system?...

...It’s a seductive vision—enjoying the same quality of life that today’s heavily-governed rich nations enjoy, with lower taxes and less regulation. The vision is so seductive, in fact, that we are forced to return to the question with which we began: if libertarianism is not only appealing but plausible, why hasn’t any country anywhere in the world ever tried it?
--Michael Lind, "The Question Libertarians Just Can’t Answer"

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The state is a relatively short-lived aspect of the human experience. It seems to have originated with the development of agriculture in ancient Egypt. The combination of people being tied to a particular geographical location and the localised economic surplus in which this resulted permitted the development of a parasitic class. Since then, there have been societies ranging from practically complete libertarianism as per ancient Ireland, to complete statism as per the Soviet Union. Libertarian societies have neither emerged nor continued to flourish to the extent the above author seems to require (for what, I'm not sure. His question doesn't prove anything in principle about the possibility of a libertarian society.), because most people have a high time preference and see the short term gain they might acquire via a state. States increase time preference, and thus statism is an unfortunately self-perpetuating idea, like the self-perpetuation of the stress reactions in the presence of polyunsaturated fat.

Additionally, lack of present reality does not imply future impossibility. You may as well never try anything new (but, in advocating the state, you are ultimately saying you shouldn't have that choice anyway).

narouz said:

"Rats and roaches live by competition under the laws of supply and demand. It is the privilege of human beings to live under the laws of justice and mercy."--Wendell Berry

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Justice is eternal and immutable, derived from the libertarian property ethic. It is upon the mutual recognition of the legitimacy of property that peaceful cooperation depends; states systemically debauche justice, changing its definition day by day, enabling it to engage in terrible behaviour. Rats and roaches are states unto one another.

narouz said:

"Let me just point out that middle-class America didn't emerge by accident. It was created by what has been called the Great Compression of incomes that took place during World War II, and sustained for a generation by social norms that favored equality, strong labor unions and progressive taxation. Since the 1970's, all of those sustaining forces have lost their power. Since 1980 in particular, U.S. government policies have consistently favored the wealthy at the expense of working families - and under the current administration, that favoritism has become extreme and relentless. From tax cuts that favor the rich to bankruptcy "reform" that punishes the unlucky, almost every domestic policy seems intended to accelerate our march back to the robber baron era. It's not a pretty picture - which is why right-wing partisans try so hard to discredit anyone who tries to explain to the public what's going on."
--Paul Krugman, Losing Our Country

Click to expand...

See my above response to Skidelsky, but let me just point out that the standard of living depends upon the capital structure, the complexity or lack thereof of which is determined by time preference. Violations of property rights destroy capital (and thereby increase time preference) and as a separate matter in themselves increase time preference. This causes people to spend rather than save and invest; this causes capital decumulation and general impoverishment.

narouz said:

"If you have loosened the stone libertarian mind-vise enough to admit that there is such a thing as a market failure, and enough intelligence or education to understand that market failure is a technical property of a good or service and implies no rap on markets, you will be OK with the idea that government is exactly the right agency with which to get stuff we want that the market won't supply (enough of) by itself, and to avoid stuff we don't want, like pollution, that the market will overproduce. If you have a heart, you will also be OK with ideas like "death by starvation is cruel and excessive punishment for 'not having been able to save enough to retire on', even for 'having been too careless to save enough', certainly for 'having been unlucky enough to be smitten by illness or accident'" and you will find government is also well suited to correct some important unfairness and injustice, even when the best it can do along these lines entails some moral hazard and bad incentives. It's worth noting that absent slavery, every productive activity, whether managed (or obligated) by government or by private enterprise, is in the end carried out in the private sector: public schools are built by private contractors, and government workers are economically just small private businesses with no employees."
--Michael O'Hare, Right-sizing Government

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Economics implies scarcity (otherwise, there would be no incentive to economise. The term incentive wouldn't even mean anything). Scarcity implies that the market is consistently failing to provide all sorts of things. This is why entrepreneurs make money; they identify new things the market has failed to provide and provide them. If you think anything in particular is provided in a lesser quality, quantity or at a higher price than people want or are willing to pay, feel free to start a business providing it in a way you perceive the consumer does value. If you are correct, you will make money. This will expand that range of goods you can strive to provide; this increases your capacity to make a profit. Enjoy dealing with the regulation and bureaucratisation that the state has placed in your way, of course, and watching your profits being eaten up in taxes and resultant savings withered away by inflation. If you think that scarcity implies the necessity of socialism (because, as I suggested earlier, if the state really can determine how much of which, say, 'public' good should be produced for whom at which time, then surely a central planner can make all of your choices for you, to your benefit), fair enough, but then why are you voluntarily engaging in argumentation, exercising your will over your body? Shouldn't you be waiting for a bureaucrat's order? The choice is either libertarianism or socialism. A middle ground ultimately implies an inherent commitment to pure socialism.

A government is precisely not the kind of agency with which to trust any activity. If it produces something, no one willingly pays for it; thus, any prices it admits into its accounting are only costs. It can therefore have no idea how much of which good to provide at which time for whom. Its actions are arbitrary.

Further, O'Hare is fundamentally ignorant of the subject he writes so patronisingly about. Pollution is a problem inasmuch as the state excludes individual people from owning certain kinds of property and, for reasons which should be clear, is notoriously ineffective in enforcing property rights. Given total privatisation, the only way you could emit pollution onto other people's property is by their consent.

I have already outlined how the state creates the impoverishment that results in starvation, but I will add that subsidising anything will generate more of it. Subsidise starvation and more people will starve. If O'Hare had a heart, perhaps he wouldn't support that entity which conscripts unwilling individuals to war, and wages that war on innocent people. The power of the state comes out of a barrel of a gun, as Mao Tse-Tung emphasised. The power of capitalism is borne of voluntary cooperation.

narouz said:

"...Austrian economics very much has the psychology of a cult. Its devotees believe that they have access to a truth that generations of mainstream economists have somehow failed to discern; they go wild at any suggestion that maybe they’re the ones who have an intellectual blind spot. And as with all cults, the failure of prophecy — in this case, the prophecy of soaring inflation from deficits and monetary expansion — only strengthens the determination of the faithful to uphold the faith.
It would be sort of funny if it weren’t for the fact that this cult has large influence within the GOP."--Paul Krugman

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The state is a cult and thus its sycophants' denouncement of any alternative, particularly any better alternative, is to be expected. Krugman's own predictive ability is pitiful.

I am enjoying the thoughtful response to the quotations, Arien.
Not agreeing, but enjoying.
I took the liberty of posting the first paragraph from your blog on Peat and rationalism.
That's all I've read at this point,
but I thought some of the Peaters here might be interested....

ARIEN YORK
Sunday, 20 April 2014
Ray Peat and Rationalism

"Ray Peat has expressed opposition to rationalism, presenting it as a tool used by an authoritarian culture to steer thought from truth, toward ideas that serve particular political ends. This understanding of rationalism is a considerable confusion. Instead, it is rationalism that gives the concept 'truth' any meaning and therefore enables us to sift truth from falsity. The modern day incarnation of rationalism's age-old opponent is empiricism, which is the true tool of the authoritarian. It denies the individual's capacity to acquire knowledge through reason, declaring that all knowledge must be borne of experience. Absent any rational means by which to interpret experience, an authoritarian culture can declare truth to be whatever it likes...."
http://arienyork.blogspot.com.au/

Arien wrote:
"The state is a cult and thus its sycophants' denouncement of any alternative, particularly any better alternative, is to be expected."

Are countries like the U.S., Canada, Mexico, England, Germany, France... are they "states" in your scheme? In a Libertarian scheme?

narouz said:

Arien wrote:
"The state is a cult and thus its sycophants' denouncement of any alternative, particularly any better alternative, is to be expected."

Are countries like the U.S., Canada, Mexico, England, Germany, France... are they "states" in your scheme? In a Libertarian scheme?

Click to expand...

Yes. A state is a territorial monopolist of coercion and ultimate jurisdiction. I used the term 'cult' in hyperbole to emphasise how easy it is for Krugman to brandish it.

Interview with Thomas Piketty, author of Capital in the 21st Century,
an international bestseller:

[BBvideo 560,340:1fuffxqr]https://www.youtube.com/watch?v=XC_SdUvMBUc[/BBvideo]

narouz said:

ARIEN YORK
Sunday, 20 April 2014
Ray Peat and Rationalism

"Ray Peat has expressed opposition to rationalism, presenting it as a tool used by an authoritarian culture to steer thought from truth, toward ideas that serve particular political ends. This understanding of rationalism is a considerable confusion. Instead, it is rationalism that gives the concept 'truth' any meaning and therefore enables us to sift truth from falsity. The modern day incarnation of rationalism's age-old opponent is empiricism, which is the true tool of the authoritarian. It denies the individual's capacity to acquire knowledge through reason, declaring that all knowledge must be borne of experience. Absent any rational means by which to interpret experience, an authoritarian culture can declare truth to be whatever it likes...."
http://arienyork.blogspot.com.au/

Click to expand...

It should be noted that when Peat uses the term "rationalism,"
he may be using it in a sense with which you are unaccustomed.
From Peat's "Can Art Instruct Science? William Blake as Biological Visionary"
http://raypeat.com/articles/articles/william-blake.shtml"


"It’s important to remember that Rationalism, as used here, isn’t simply a “love of reason,” which is what is often meant when people speak of “rationalism.” In its historical use among philosophers, rather than being just a devotion to rationality, it is a specific doctrine which denies that experience is the source of knowledge. Historically, Rationalism has been closely allied with mysticism, as an affirmation that knowledge comes from a source beyond the ordinary world of experience and beyond the individual. At the present time, it serves authoritarian science rather than authoritarian theology, though the basic doctrine is the same."-Ray Peat

narouz said:

I am enjoying the thoughtful response to the quotations, Arien.
Not agreeing, but enjoying.
I took the liberty of posting the first paragraph from your blog on Peat and rationalism.
That's all I've read at this point,
but I thought some of the Peaters here might be interested....

ARIEN YORK
Sunday, 20 April 2014
Ray Peat and Rationalism

"Ray Peat has expressed opposition to rationalism, presenting it as a tool used by an authoritarian culture to steer thought from truth, toward ideas that serve particular political ends. This understanding of rationalism is a considerable confusion. Instead, it is rationalism that gives the concept 'truth' any meaning and therefore enables us to sift truth from falsity. The modern day incarnation of rationalism's age-old opponent is empiricism, which is the true tool of the authoritarian. It denies the individual's capacity to acquire knowledge through reason, declaring that all knowledge must be borne of experience. Absent any rational means by which to interpret experience, an authoritarian culture can declare truth to be whatever it likes...."
http://arienyork.blogspot.com.au/

Click to expand...

Haha

"As the true method of knowledge is experiment, the true faculty of knowing must be the faculty which experiences."

William Blame said that. Ray Peat quoted it. However mister Blake says, immediately after:

"That the Poetic Genius is the True Man, and that the Body or Outward Form of Man is derived from the Poetic Genius."

As you can see the creation of these factions (rationalism and empiricism?) is a hobby best perfected by the starch eaters. Let them consume each other.

narouz said:

Interview with Thomas Piketty, author of Capital in the 21st Century,
an international bestseller:

[BBvideo 560,340:1t4spjez]https://www.youtube.com/watch?v=XC_SdUvMBUc[/BBvideo]

Click to expand...

I guess this site wouldn't be complete if someone didn't post about the idiot of the moment.

Why We’re in a New Gilded Age
Paul Krugman
MAY 8, 2014 ISSUE

Capital in the Twenty-First Century
by Thomas Piketty, translated from the French by Arthur Goldhammer
Belknap Press/Harvard University Press, 685 pp., $39.95



by Emmanuelle Marchadour

Thomas Piketty in his office at the Paris School of Economics, 2013
Thomas Piketty, professor at the Paris School of Economics, isn’t a household name, although that may change with the English-language publication of his magnificent, sweeping meditation on inequality, Capital in the Twenty-First Century. Yet his influence runs deep. It has become a commonplace to say that we are living in a second Gilded Age—or, as Piketty likes to put it, a second Belle Époque—defined by the incredible rise of the “one percent.” But it has only become a commonplace thanks to Piketty’s work. In particular, he and a few colleagues (notably Anthony Atkinson at Oxford and Emmanuel Saez at Berkeley) have pioneered statistical techniques that make it possible to track the concentration of income and wealth deep into the past—back to the early twentieth century for America and Britain, and all the way to the late eighteenth century for France

...

Still, today’s economic elite is very different from that of the nineteenth century, isn’t it? Back then, great wealth tended to be inherited; aren’t today’s economic elite people who earned their position? Well, Piketty tells us that this isn’t as true as you think, and that in any case this state of affairs may prove no more durable than the middle-class society that flourished for a generation after World War II. The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to “patrimonial capitalism,” in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.

It’s a remarkable claim—and precisely because it’s so remarkable, it needs to be examined carefully and critically. Before I get into that, however, let me say right away that Piketty has written a truly superb book. It’s a work that melds grand historical sweep—when was the last time you heard an economist invoke Jane Austen and Balzac?—with painstaking data analysis. And even though Piketty mocks the economics profession for its “childish passion for mathematics,” underlying his discussion is a tour de force of economic modeling, an approach that integrates the analysis of economic growth with that of the distribution of income and wealth. This is a book that will change both the way we think about society and the way we do economics.

http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

How Piketty's Bombshell Book Blows Up Libertarian Fantasies

Sorry, Ayn Rand. Your fiction has been exposed as, well, fiction...

April 28, 2014

Libertarians have always been flummoxed by inequality, tending either to deny that it’s a problem or pretend that the invisible hand of the market will wave a magic wand to cure it. Then everybody gets properly rewarded for what he or she does with brains and effort, and things are peachy keen.

Except that they aren’t, as exhaustively demonstrated by French economist Thomas Piketty, whose 700-page treatise on the long-term trends in inequality, Capital In the 21st Century, has blown up libertarian fantasies one by one.

To understand the libertarian view of inequality, let’s turn to Milton Friedman, one of America's most famous and influential makers of free market mythology. Friedman decreed that economic policy should focus on freedom, and not equality.

If we could do that, he promised, we’d not only get freedom and efficiency, but more equality as a natural byproduct. Libertarians who took the lessons from his books, like Capitalism and Freedom (1962) and Free to Choose (1980), bought into the notion that capitalism naturally led to less inequality.

Basically, the lessons boiled down to this: Some degree of inequality is both unavoidable and desirable in a free market, and income inequality in the U.S. isn’t very pronounced, anyway. Libertarians starting with these ideas tend to reject any government intervention meant to decrease inequality, claiming that such plans make people lazy and that they don’t work, anyway. Things like progressive income taxes, minimum wage laws and social safety nets make most libertarians very unhappy.

Uncle Milty put it like this:

“A society that puts equality—in the sense of equality of outcome—ahead of freedom will end up with neither equality nor freedom.… On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality.”

Well, that turns out to be spectacularly, jaw-droppingly, head-scratchingly wrong. The U.S. is now a stunningly unequal society, with wealth piling up at the top so fast that an entire movement, Occupy Wall Street, sprung up to decry it with the catchphrase “We are the 99%.”

How did libertarians get it all so backwards? Well, as Piketty points out, people like Milton Friedman were writing at a time when inequality was indeed less pronounced in the U.S. than it had been in previous eras. But they mistook this happy state of affairs as the magic of capitalism. Actually, it wasn’t the magic of capitalism that reduced inequality during a brief, halcyon period after the New Deal and WWII. It was the forces of various economic shocks plus policies our government put in place to respond to them that changed America from a top-heavy society in the Gilded Age to something more egalitarian in the post-war years.

As you’ll recall, if you watched the movie Titanic, the U.S. had a class of rentiers (rich people who live off property and investments) in the early part of the 20th century who hailed from places like Boston, New York and Philadelphia. They were just as nasty and rapacious as their European counterparts, only there weren’t quite so many of them and their wealth was not quite as concentrated (the Southern rentiers had been wiped out by the Civil War).

The fortunes of these rentiers were not shock-proof: If you remember Hockney, the baddie in James Cameron’s film, he survives the Titanic but not the Great Crash of ’29, when he loses his money and offs himself. The Great Depression got rid of some of the extreme wealth concentration in America, and later the wealthy got hit with substantial tax shocks imposed by the federal government in the 1930s and '40s. The American rentier class wasn’t really vaporized the way it was in Europe, where the effects of the two world wars were much more pronounced, but it took a hit. That opened up the playing field and gave people more of a chance to rise on the rungs of the economic ladder through talent and work.

After the Great Depression, inequality decreased in America, as New Deal investment and education programs, government intervention in wages, the rise of unions, and other factors worked to give many more people a chance for success. Inequality reached its lowest ebb between 1950 and 1980. If you were looking at the U.S. during that time, it seemed like a pretty egalitarian place to be (though blacks, Hispanics, and many women would disagree).

As Piketty notes, people like Milton Friedman, an academic economist, were doing rather well in the economy, likely sitting in the top 10 percent income level, and to them, the economy appeared to be doing just fine and rewarding talents and merits very nicely. But the Friedmans weren’t paying enough attention to how the folks on the rungs above them, particularly the one percent and even more so the .01 percent, were beginning to climb into the stratosphere. The people doing that climbing were mostly not academic economists, or lawyers, or doctors. They were managers of large firms who had begun to award themselves very prodigious salaries.

This phenomenon really got going after 1980, when wealth started flowing in vast quantities from the bottom 90 percent of the population to the top 10 percent. By 1987, Ayn Rand acolyte Alan Greenspan had taken over as head of the Federal Reserve, and free market fever was unleashed upon America. People in U.S. business schools started reading Ayn Rand's kooky novels as if they were serious economic treatises and hailing the free market as the only path to progress. John Galt, the hero of Atlas Shrugged (1957), captured the imaginations of young students like Paul Ryan, who worshipped Galt as a superman who could rise to the top through his vision, merit and heroic efforts. Galt became the prototype of the kind of “supermanager” these business schools were supposed to crank out.

Since the ‘80s, the top salaries and pay packages awarded to executives of the largest companies and financial firms in the U.S. have reached spectacular heights. This, coupled with low growth and stagnation of wages for the vast majority of workers, has meant growing inequality. As income from labor gets more and more unequal, income from capital starts to play a bigger role. By the time you get to the .01 percent, virtually all your income comes from capital—stuff like dividends and capital gains. That’s when wealth (what you have) starts to matter more than income (what you earn).

Wealth gathering at the top creates all sorts of problems. Some of these elites will hoard their wealth and fail to do anything productive with it. Others channel it into harmful activities like speculation, which can throw the economy out of whack. Some increase their wealth by preying on the less well-off. As inequality grows, regular people lose their purchasing power. They go into debt. The economy gets destabilized. (Piketty, and many other economists, count the increase in inequality as one of the reasons the economy blew up in 2007-'08.)

By the time you get to 2010, U.S. inequality, according to Piketty’s data, is quantitavely as extreme as in old Europe in the first decade of the 20th century. He predicts that inherited property is going to start to matter more and more in the U.S. as the supermanagers, the Jamie Dimons and so on, bequeath their gigantic hordes of money to their children.

The ironic twist is this: The reason a person like the fictional John Galt would be able to rise from humble beginnings in the 1950s is because the Gilded Age rentiers lost large chunks of their wealth through the shocks the Great Depression and the deliberate government policies that came in its wake, thus loosening their stranglehold on the economy and society. Galt is able to make his fortune precisely because he lives in a society that isn’t dominated by extreme concentrated wealth and dynasties. Yet the logical outcome of an economy in which there is no attempt made to limit the size of fortunes and promote greater equality is a place in which the most likely way John Galt can make a fortune is to marry an heiress. So it was in the Gilded Age. So it may be very soon in America.

Which brings us back to Friedman’s view that people naturally get what they deserve, that reward is based on talent. Well, clearly in the case of inherited property, reward is not based on talent, but membership in the Lucky Sperm Club (or marriage into it). That made Uncle Milty a little bit uncomfortable, but he just huffed that life is not fair, and we shouldn’t think it any more unjust that one person is born with mathematical genius as the other is born with a fortune. What’s the difference?

Actually, there is a very big difference. It is the particular rules governing society that determine who amasses a fortune and what part of that fortune is passed on to heirs. The wrong-headed policies promoted by libertarians and their ilk, who hate any form of tax on the rich, such as inheritance taxes, have ensured that big fortunes in America are getting bigger, and they will play a much more prominent role in the direction of our society and economy if we continue on the present path.

What we are headed for, after several decades of free market mania, is superinequality, possibly such as the world has never seen. In this world, more and more wealth will be gained off the backs of the 99 percent, and less and less will be earned through hard work.

Which essentially means freedom for the rich, and no one else.

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture." She received her Ph.D. in English and cultural theory from NYU. She is the director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.

Money lines: Piketty, from Lynn Parramore, above:

"Basically, the lessons boiled down to this: Some degree of inequality is both unavoidable and desirable in a free market, and income inequality in the US isn’t very pronounced, anyway. Libertarians starting with these ideas tend to reject any government intervention meant to decrease inequality, claiming that such plans make people lazy and that they don’t work, anyway. Things like progressive income taxes, minimum wage laws and social safety nets make most libertarians very unhappy.

"Uncle Milty put it like this:

"A society that puts equality — in the sense of equality of outcome — ahead of freedom will end up with neither equality nor freedom.… On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality.

"Well, that turns out to be spectacularly, jaw-droppingly, head-scratchingly wrong. The US is now a stunningly unequal society, with wealth piling up at the top so fast that an entire movement, Occupy Wall Street, sprung up to decry it with the catchphrase, “We are the 99 percent.”

"How did libertarians get it all so backwards? Well, as Piketty points out, people like Milton Friedman were writing at a time when inequality was indeed less pronounced in the US than it had been in previous eras. But they mistook this happy state of affairs as the magic of capitalism. Actually, it wasn’t the magic of capitalism that reduced inequality during a brief, halcyon period after the New Deal and World War II."

Always has been, always will be. The question is why is princeton publishing a study on it.

j. said:

post 43663
Yeah, hyperinflation and then to start all over.

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Yeah, and with hyperinflation of course comes hyperventilation!

Adnada said:

post 44193

narouz said:

“Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world,” Francis wrote in the papal statement. “This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacra­lized workings of the prevailing economic system.”-Pope Francis

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It is hard to find examples confirming the effectiveness of a free market because we have next to no examples of completely free markets to look at. People often confuse a lightly regulated market with free one, but that is a problematic error, as even the smallest amount of regulation benefits some and create hurdles for others.

"If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?" ~Frederic Bastiat

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That's a helluva quote from da pope lol

j. said:

Libertarians live in all countries, there are libertarian movements in the poorest and most backward such as Venezuela and also in rich places like Hong Kong and Singapur. "Western" libertarians have the same beliefs in favor of private property as libertarians in other countries. What an stunningly idiotic statement.

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http://gawker.com/ayn-rands-capitalist-paradise-is-now-a-greedy-land-grab-1627574870

Like in Chile.

btw, Krugman is a hack.
Krugman Then and Now on Trade | naked capitalism

What makes an oligarchy?

Regina said:

What makes an oligarchy?

What makes an Oligarchy and why isn't it extinct yet?

What is the nature of oligarchism and what has allowed systems of empire to maintain continuous self organization across generations? Is it purely based on family connections? Is it based on ambition? Is it rooted in some form of inborn sociopathy? Or is the essence of oligarchism to be found in...

matthewehret.substack.com

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But but can't you see? It's all our fault, err... we voted for them! Oh wait...