Thread for posting quotes of me that you like!
Thread for posting quotes of me that you like!
Deflation: When Austrians Become Interventionists by Philipp Bagus criticizes George Reisman and five other Austrian economists regarding their views on deflation. This post will respond to the criticism of Reisman. My goal here is just to point out a few errors, not to discuss Bagus' overall view of deflation. All italics in quotes are my emphasis.
Yet, Reisman’s plan of monetary reform is not the direct abolition of government interventions into the monetary system, which would bring about deflation, but it is a new intervention, guaranteeing the results of past interventions. He proposes a new government intervention into the economic system, i.e., according to his own standards, a violation of freedom, in order to bail out the unsound banking system.
In Capitalism: A Treatise on Economics, Reisman explained why the results of past interventions and injustices should be guaranteed and left alone, in general, after a time limit passes. Property rights must be made secure, as quickly as possible, so that people are in a position to work to improve their property and to plan for the future.
If claims about past injustices can result in new redistributions of property, then my property isn’t secure. Whatever I think I own, I can’t count on it.
Reisman explains this regarding land reform and it applies to all types of property:
The Demand for Land Reform
The doctrine that present titles are invalid because of past acts of violence in the appropriation of property, is often associated with demands for “land reform.” Land reform is a demand that property be forcibly transferred from its present owners to a new group of owners. The connection to the violent-appropriation doctrine exists whenever this new group is alleged to be descended from earlier possessors whose rights the ancestors of the present owners allegedly violated.
It should be realized that no amount of past violence in the appropriation of land can justify land reform. Land reform is simply a new, fresh act of violent transfer of land. It is one thing for the actual victim of a dispossession, or his children or grandchildren, to demand to be put back in the possession of the property that was forcibly taken from him. But if for any reason these individuals are denied justice, it becomes a fresh injustice to later on dispossess an owner on the grounds that his ancestors, or the ancestors of some previous seller, lacked just title. In order for justice to be done, there must be a time limit on the recognition of claims for the redress of past injustices.
If this were not the case, no one could be secure in his property. At any time, parties could step forward claiming dispossession of their ancestors by the current owner’s ancestors or by the ancestors of some previous seller of the property. And claims of any one group of alleged victims could in turn be superseded by the claims of still another group of alleged victims able to trace the dispossession of its ancestors further back. In a country like England, for example, the same piece of ground might be contended for by those able to trace the dispossession of their ancestors to the War of the Roses, or, alternatively, to the Norman Conquest, or to the still earlier invasions of the Danes, Saxons, Romans, and even Picts and Celts.
It would certainly be a gross injustice to ask anyone to work and save to improve his property, and then take it from him on the basis of such claims. For justice to be done, conditions must be such that people can work and save to improve their property. And for such conditions to exist, property rights must be put beyond challenge as quickly and as completely as possible. This means, as a minimum, a strict time limit on the recognition of claims based on past injustices.
Once private property rights are made secure, not only are the effects of past injustices washed away, but, as should already be clear, the land of a country is quickly put to its most efficient uses.
The issue also comes up in the section From Socialism to Capitalism: How to Privatize Communist Countries:
Provided that the essential requirements of security of property, the separation of employment and ownership, and the unrestricted freedoms to buy and sell, hire and fire, and compete, are observed, what remains is to accomplish the transition to private ownership as quickly as possible. Reasonable but strict time limits must be set for the location of former owners or their heirs, and it must be firmly established that thereafter no new claims will be heard on their account. This is an essential part of establishing the security of property. All of the assets in the hands of the state must likewise be disposed of within a strict time limit, so that no one in the market need labor under any uncertainty about what properties will be available and when and thus what plans he can and cannot make. This is essential to making the economic system as efficient as possible as soon as possible.
Let’s move on to a second point by Bagus:
At one point, [Reisman] stresses the practical difficulties of mass bankruptcies during a deflation:
[M]ass bankruptcies, which, given the inability of today's judicial system to keep pace even with its current case load, would probably take a decade or more to get sorted out. That would mean that in the interval the economy would be largely paralyzed, because no one would know just who owned what. (1996, p. 961)
The ability of the present-day judicial system to handle cases of mass bankruptcy is not, of course, a theoretical argument against deflation. For Reisman's argument deals with the practical difficulties a severe deflation might have to face in today's judicial system. Yet there is no theoretical reason why there could not be a judicial system that could settle the lawsuits quickly. But let us deal with this practical argument.
The quote starts mid paragraph, leaving out a sentence by Reisman which reads:
Solving the problem of “an excessive debt burden” by means of inflation in any form is a reprehensible practice.
Bagus agrees with Reisman that that's reprehensible. Omitting that part of Reisman's view was misleading. Bagus presents Reisman as defending inflation using a weak argument (a mere practical point rather than a theoretical argument). But Reisman wasn't trying to defend inflation, he was just bringing up an important practical consideration about not destroying civilization.
Bagus continues:
It must be stressed that an increased demand for judicial services on the free market brings about an increased supply of those services. Yet, Reisman could contend that we face a government monopoly of judicial services. However, politicians would likely come up with emergency measures if deflation caused bankruptcies which overstrained the judicial system.[35] For politicians are eager to search and find problems they can fix. Also the judicial system itself could come up with solutions for this problem.
The basic theme of Bagus’ article is that six Austrian economics aren’t, in his opinion, radical enough, not even Rothbard. Bagus wants full 100% capitalism and freedom no matter what. I read him as such an anti-government libertarian that I think he’s an anarchist. With that context in mind:
Why is Bagus expressing his confidence in the government to come up with some emergency measures to fix a problem? Why does he think this is something politicians can fix effectively? I don’t get it. Here Bagus is objecting from a perspective of trusting government competence much more than Reisman does, contrary to the general themes of Bagus’ other comments.
Bagus provides no arguments about why government would be able to succeed at improving the judicial system. We've seen historically that the importance or urgency of an issue, such as war, education or healthcare, does not automatically make governments wise or competent.
Of course some entrepreneurs can have difficulties in the sense, that other entrepreneurs who anticipated the price drop and held their money back, can bid resources away from them. Entrepreneurs who anticipate price changes can always profit relative to the entrepreneurs who did not anticipate them.
Is the job of the entrepreneur to anticipate market conditions, anticipate government policies that affect market conditions, or both? Bagus seems to find it acceptable that businessmen lose money, including going bankrupt, for not anticipating new government policies that cause deflation.
I think a businessman's job should be focused on his industry, not on understanding politicians, lobbying for policies (being a cause of government policy makes it easier to anticipate), getting friends in high places to give him tips about the balance of power, etc. I want businessmen to be separate from government. See Atlas Shrugged for further discussion of political pull – it was men like James Taggart, not Hank Rearden, who were better able to anticipate new government policies.
This is an answer to Name That Trait which asks what trait differentiates humans from animals. The named trait should justify vegan-objectionable activities such as slaughtering animals for food.
Short answer: the trait is being a universal knowledge creator. This answer relies on lots of non-standard background knowledge such as The Beginning of Infinity.
This post gives a different argument which I think is easier to understand with less background knowledge. It will still require going over some background.
An important problem in the history of philosophy is the problem of design, famously argued by William Paley. It says some objects (such as an animal or pocket watch) have the appearance of design which requires explanation. Paley’s explanation was that a pocket watch has an intelligent, human designer, and animals were designed by God.
Plants, animals and pocket watches have the appearance of design. They’re complex. Stones, crystals, dirt and stars don’t. This is a big difference. Stones and stars are worth explaining in terms of fundamental physics like the big bang, but plants merit additional explanation. Plants e.g. have chloroplasts which do photosynthesis, which are nothing like rocks and wouldn’t be created randomly or purposelessly.
The above is widely accepted. What’s not widely known is that “appearance of design” is knowledge. Knowledge is information adapted to a purpose.
The underlying problem is how knowledge can be created starting with non-knowledge. Where can new knowledge come from? How can it originate?
This is a hard problem and not many answers have been proposed. The bad answers include magic, knowledge is just created sometimes out of thin air, and designers. Saying that a designer created the knowledge doesn’t explain how the designer created the knowledge (using intelligence – but how does intelligence work?), nor where that designer’s intelligence came from. If you say knowledge comes from God who already has tons of knowledge, then where did God come from?
A single good answer has been developed. It’s the only known answer that makes much sense. It’s the theory of evolution. Replication with variation and selection is able to adapt information to a purpose and thereby create new knowledge. The appearance of design, in plants and animals, was created by evolution.
Where did eyes come from? Evolution. Why does a rabbit run away from danger? It evolved to do that. Why are trees structured in an organized way with the leaves on top where they can better receive light? Because that structure has better survival and replication value for trees (survival and replication value is the short answer for what biological evolution selects for). Etc. This is widely accepted.
With this background in mind:
How does intelligence work and create new knowledge? I believe intelligence works by evolution, literally, not as an analogy. (Seriously I find that 90% of people assume I mean an analogy even though I just told them I didn’t.) This is not a mainstream view. It’s been developed by Critical Rationalist philosophers, especially David Deutsch.
Biological evolution does replication with variation and selection of genes. Intellectual evolution does replication with variation and selection of ideas. Genes and ideas are both things which it’s possible to make copies of – replicators – so evolution applies to them.
FYI, the view that evolution applies to replicators is a fairly standard view in the field even though most of the public is ignorant of it. It’s held by e.g. Richard Dawkins and is why he developed the idea of a “meme” (which means an idea that replicates). A meme plays the role in the evolution of ideas that a gene plays in the evolution of plants and animals.
Lots of animal behavior has the appearance of design (or the appearance of intelligence or purposefulness). This indicates knowledge is involved. I think that knowledge comes from the animal’s genes and was created by biological evolution. I think it’s this appearance of intelligent behavior that is the primary reason people (correctly) differentiate animals from rocks.
Human behavior also has the appearance of design, so what’s the difference? Humans create new knowledge that isn’t in their genes. Instead of relying only on biological evolution for knowledge, humans do intelligent evolution of ideas within their minds. This is a capacity that no animal has and explains why only humans were able to invent philosophy and science.
When an animal does intelligent-appearing behavior, the designer was biological evolution. When a human does intelligent-appearing behavior, the designer is usually a human being who created ideas using mental evolution of ideas.
Animals have one source of knowlege: genetic evolution. Humans have two sources of knowledge: genetic and memetic evolution.
People commonly assume that the appearance of design in animal behavior is an indicator of intelligence, while the appearance of design in an animal’s eyes and claws is not. The primary mechanism by which genes control animal behavior is through creating the animal’s brain according to a design detailed in the animal’s genes. The animal brain is a computer which the genes build and configure with behavioral algorithms. Humans work differently because they’re capable of doing evolution within their minds to create new algorithms, new behaviors, new ideas. etc.
Getting from these claims to a full case against animal welfare or rights requires additional arguments. I won’t detail them here but see this post for some explanation. The basic issue is that animals aren’t differentiated from rocks in a relevant way because genes (which are where the knowledge is) are not conscious and can’t suffer (like rocks), and animals behave according to algorithms in conceptually the same way as a robot like a self-driving car.
For more info, see e.g. Evolution and Knowledge, Evolution, and the books of David Deutsch and Richard Dawkins.
curi: The trait that differentiates humans from non-human animals, in a veganism-relevant way, is (general, universal) intelligence, which is the ability to learn (aka create knowledge), which is the ability to do evolution of ideas within one's mind.
This is a binary trait, not a matter of degree.
This is not a complete explanation, e.g. it doesn't say how that trait relates to other issues vegans may bring up like consciousness or suffering.
Vegans: What about mentally handicapped people. If they have less intellectual capacity than a cow, is it OK to kill them?
curi: Yes, in principle. They're (by premise) on the wrong side of the intelligence/non-intelligence asymmetry.
However, we should begin our discussion with cases which are easier to understand and potentially agree about, not hard cases or edge cases. If you understand and agree with my way of differentiating most humans from cows, then it'd make sense to discuss edge cases in detail.
Vegans: How do you tell if a normal person or cow is intelligent?
curi: Primarily behavior: people have intelligent conversations, write blog posts demonstrating that they understand TV show plots, act according to learned jobs skills, develop new science, etc. That is best explained by knowledge the person created in his mind rather than by genetic knowledge. Animals behave in simplistic, algorithmic ways which are best explained by the knowledge in their genes.
I think careful analysis of animal behavior, and trying to differentiate it from the capabilities of stuff like video game enemies and self-driving cars, is one of the more productive ways to continue this discussion. People have strong intuitions that animals are somewhat intelligent and are clearly different, in terms of intelligence, than current robots and "AI" software algorithms. Relatedly, people believe intelligence is a matter of degree. Looking at rigorous information of animal behavior, from scientists, and carefully considering the simplest ways it could be achieved, can be informative.
This post assumes familiarity with David Deutsch's (DD) original idea of static and rational memes in The Beginning of Infinity (BoI). (Summary.)
DD's theory says there are two types of memes with two different replication strategies. Static memes replicate by suppressing criticism of themselves (and sometimes also of other ideas). Rational memes replicate by being useful.
I propose instead that there are three types of memes.
The additional category is a companion meme which requires criticism suppression but relies on other (static) memes doing it.
I think static companion memes have a variety of replication strategies rather than being defined by one. One possibility is being highly adapted to appear useful to people who aren't critically thinking.
In a fully static society, not all memes have to follow the replication strategy of suppressing criticism of themselves. The reason is the reach of knowledge (another concept explained in BoI). Some static memes do (partially or fully) general purpose criticism suppression rather than only suppressing criticism of themselves.
I think there is basically a core of some powerful static memes which are very effective at suppressing criticism in general. Once those exist, other memes don't need to suppress criticism of themselves because criticism isn't happening anyway. So they can evolve to compete for replication bandwidth in other ways.
A further complication, which blurs the categorization of memes into two or three types, is that ideas can be like code libraries from programming which provide callable APIs. In order to suppress criticism of itself, idea B can call a library function provided by idea A. However, if the host has idea B without having idea A, then that function call doesn't work and B fails to suppress criticism of itself. In this case, much of the knowledge of criticism suppression is outsourced, however idea B is able to actively suppress criticism of itself in the right environment.
Another complication is that there need not be a black and white dividing line between static memes and static companion memes. A meme can do some of each: it can be adapted partly to suppress criticism and partly adapted to do something else (such as appearing useful or good to non-critical thinkers). I'd guess that many memes are mixed because the core of criticism suppressing memes remove some but not all of the selection pressure on other memes to optimize for criticism suppression. That allows them to adapt for other purposes too, and some may entirely lose their criticism suppression. This other adaptation would be to better compete with other memes for replication bandwidth in a static society environment. Once criticism is largely suppressed, the amount the typical meme replicates won't have much to do with how well that memes suppresses criticism.
Update:
Memes replicate in two different ways. Within a mind and between minds.
Memes must replicate between minds to last over time.
Critical Rationalism says we learn by doing evolution of ideas within our mind.
Do static memes replicate within a mind? That sounds potentially bad because they'd make progress and change, not stay static. But it depends on what selection pressure they're being exposed to. If a static meme could control the selection then it could use within-mind replication to get more optimized. This would be different than suppressing criticism (DD's idea of static memes). It'd be changing the nature of the criticism instead.
If static memes simply suppress criticism, they can't get more adapted by within-mind evolution. But if they could instead control the types of criticism, then they can benefit from within-mind evolution.
So I'm thinking static memes do within-mind evolution in some cases while keeping control over the selection (criticism). I think that's a significant way static meme theory is incorrect.
This is a discussion topic for Freeze. Other people are welcome to make comments. Freeze has agreed not to post under other names in this topic.
This is a critical response to Alexander Tabarrok regarding his debate with George Reisman regarding the merits of Reisman’s book Capitalism: A Treatise on Economics. As context: it’s an internal debate between Austrian economists from 1997-8, and Reisman is an Objectivist as well.
The debate began with Review of Capitalism: A Complete and Integrated Understanding of the Nature and Value of Human Economic Life. It’s a critical, negative review by Tabarrok (who denies it’s negative because he praised some ideas, but he also claimed e.g. that one of Reisman’s main themes throughout the book is “fundamentally misguided”).
Reisman replied in Reisman on Capitalism. I regard this article as refuting Tabarrok's review. Reisman's concluding paragraph summarizes:
In this response, I have dealt with five instances of misrepresentation in the review: its claim that I ignore the essential theme of support for businessmen and capitalists, its misrepresentation of my use of classical economics' concept of demand and supply, its distortion of my definition of economics, its misrepresentation of my views on time preference as a determinant of the rate of profit and interest, and finally, its denial of my contributions to aggregate economic accounting and "macroeconomics." These five instances are merely a good sample. [...]
Tabarrok replied briefly in Response to Reisman on Capitalism. That concludes the original debate.
I’ll now respond by pointing out major errors in Tabarrok’s response, thereby vindicating Reisman’s response and his Capitalism. Here’s Tabarrok’s first paragraph:
Reisman's Capitalism is longer than either Mises's Human Action or Rothbard's Man, Economy, and State. It thus seems unreasonable to object to my review because it ignores major portions of his work. Reisman's other objections are similarly weak.
Reisman didn’t make that objection. Rather than criticizing Tabarrok for ignoring (omitting) some topics in the original review, Reisman criticized Tabarrok for misrepresentation. Tabarrok didn’t just fail to discuss some parts of the book; he made incorrect claims about the contents of the book.
Tabarrok repeats one of his misrepresentations in his next sentence:
Capitalism has surprisingly little to say on entrepreneurship or other typically Austrian and Objectivist themes.
Tabarrok made that claim in his first review, too. The problems are that it’s incorrect and that Reisman already refuted it in his response. Nevertheless, Tabarrok repeats the point without engaging with Reisman’s arguments.
Tabarrok’s original argument was that “there is no index entry for entrepreneurship”, plus he didn’t find those themes when reading Capitalism. It’s true that Reisman didn’t say much about the word “entrepreneurship”, but that’s because he used synonyms. He used the words “businessmen” and “businessman” a combined 678 times, and he talked extensively about capitalists. Reisman had already informed Tabarrok of this, but somehow Tabarrok didn’t reconsider.
To show Reisman really did cover this theme, I’ll list some of the section titles found in the table of contents of Capitalism. I think they're adequate to make the point, but if you have doubts about which side of this debate is correct, read some of these sections and see for yourself.
The Benefit from Geniuses
The General Benefit from Reducing Taxes on the “Rich”
The Pyramid-of-Ability Principle
Productive Activity and Moneymaking
The Productive Role Of Businessmen And Capitalists
Smith’s Failure to See the Productive Role of Businessmen and Capitalists and of the Private Ownership of Land
A Rebuttal to Smith and Marx Based on Classical Economics: Profits, Not Wages, as the Original and Primary Form of Income
Further Rebuttal: Profits Attributable to the Labor of Businessmen and Capitalists Despite Their Variation With the Size of the Capital Invested
The “Macroeconomic” Dependence of the Consumers on Business
My conclusions are that Tabarrok is mistaken, that Reisman’s Capitalism is a great book, and that no major criticisms of Capitalism exist.
Reisman may be mistaken, as every author may be, but no one has discovered Reisman’s errors and written down explanations of them. Along with the writings of his teacher, Ludwig von Mises, Reisman’s Capitalism constitutes some of the best existing economics knowledge.
See also my Review of Kirzner Reviewing Reisman and Criticism of Bagus Criticizing Reisman on Deflation.
for most psychology issues, research is the wrong approach
ppl need to think, debate, explain, criticize. not measure empirical data
observe carefully, document some human behavior. get some examples. but don't just get a low-resolution, imprecise look at mass data and then do statistics
they are trying to copy the methods of the empirical sciences, which were quite successful, but it's inappropriate for their subject matter
so the field basically stopped making progress
there's certainly some overlap in methods btwn physics and pscyh but they are copying physics or even medical studies in bad ways. they copy too much of the format and details despite substantive differences. there's some cargo culting going on
psychology research uses too many analogies, poor proxies, and bad measures to try to get data to do statistics with. whereas physics data isn't based on analogies. you can't replace rulers and telescopes with questionnaires and think ur doing the same sort of science.