This statement comes from certain discussions with a friend about the "market" which he sees as if it were a tool, or a vehicle, or some utilitarian construct which we USE to create something called "wealth," but sometimes "inequities" in h...ow it "distributes" that wealth and the conclusion taken from that definition that the "market (often) fails" and that we "must not leave everything to the market."
But that is a flawed definition and a flawed conclusion. The market is not a tool, it is literally everything, or nearly so. Why? Because the market is the people. The market is simply the expression of the choices people make. A FREE market does not fail, that simply implies that the people failed to make the "correct" decisions when left on their own and so, ergo, "the state (or some other coercive power) must right the wrongs, fix the failures and prevent more failures from happening." If the market were a tool then there may be a failure, but how does one classify the choices people make a failure?
Say you have one kid. Unless you have an accident, the choice as to how many you want will be based on your knowledge of your situation and a response to incentives only you really know about. If you have only one kid, does that mean you are not responding to the demographic needs of your country? If you have 4 then you are overpopulating the planet. If there are many people like you, making the "wrong choices" that then becomes a "market failure." People not making the "right choices." That is only one example. Many others can be given. But he point is that in the above view the market being a tool can be adjusted, played with, "tinkered with," led, cajoled, planned for, or corrected to prevent all sorts of "market failures."
My position is that the market is fundamentally something different. It is everything in that IT only contains all the knowledge, IT only can make the right decisions, IT only has the right to make those decisions. The market is you, me, Stephen, and all the people making choices based on the knowledge we only have, the incentives we only see.
In other words, the market is us, the market is information, the market is an EXPRESSION of liberty, freedom and all those good things. To override the market, by misrepresenting it as some tool that was CREATED (for the benefit of some, of course, and at the expense of others, surely) and can be TUNED UP like some car is to override our liberties.
So yes, the market is everything.
Does the market sometime arrive at results some may not like? Of course, but to make the leap that we should not leave things to the market, means really that we should all be at the whim of all sorts of policies from the bureaucrats at the top.
2011년 2월 21일 월요일
2011년 1월 29일 토요일
We All Have our Religions
We all have our religions. Some people believe in a God, others in the power and knowledge of Man, his stunted rationality and his crude science as tools that could (they naively believe) change the world. I'll take the side of the religious, though I'm not religious myself, it seems to me theirs is a far less rabid, foam-at-the-mouth sort of approach to life.
But these enlightened liberals fail to see that they too are followers of a religion. Theirs is of course a worship of "rational" deities, and it is as varied a Mt.Olympus as anything the Greeks ever had. Some worship science, some worship things like social justice or things like "human rights." And with the green movement you actually can begin to see the emergence of an actual religion, the worship of Gaia, Mother Earth. So it all depends but you will find that whatever they happen to worship, they are as devoted to it as the most ardent crusaders ever were. Take Canada, that is as bad as it gets, perhaps in Europe it gets worse but I can speak more accurately about Canada. It is a country where quite literally whatever liberties there existed at some point these are now gone, replaced with the worship of abstract causes and ideals. It is rotten to the core.
But these enlightened liberals fail to see that they too are followers of a religion. Theirs is of course a worship of "rational" deities, and it is as varied a Mt.Olympus as anything the Greeks ever had. Some worship science, some worship things like social justice or things like "human rights." And with the green movement you actually can begin to see the emergence of an actual religion, the worship of Gaia, Mother Earth. So it all depends but you will find that whatever they happen to worship, they are as devoted to it as the most ardent crusaders ever were. Take Canada, that is as bad as it gets, perhaps in Europe it gets worse but I can speak more accurately about Canada. It is a country where quite literally whatever liberties there existed at some point these are now gone, replaced with the worship of abstract causes and ideals. It is rotten to the core.
Freedom and Religion
If I were to choose, I would prefer a world where we were all wrong but free to be wrong in whatever way we chose to be, over a world where we were all coerced into being right. This is why freedom of religion is so important and such a bastion against the encroaching forces of "modernization." People who wish to force the truth down your throat are the shock troops of totalitarianism.
2011년 1월 25일 화요일
Rejecting the Harvard Business School Oath
The Harvard Business School oath
Recently the MBA program I am attending decided that the Harvard Business School oath would be offered at graduation. It is this that prompted me to give a lecture about why this particular oath is misguided and dangerous and from that lecture evolved this article.
I believe that the HBS oath is an overreaction to the latest financial crisis. More fundamentally however, I believe that it is part of a movement which seeks to undermine the private sector and harness it for the “social good.”Or in other words to socialize the private sector on highly dubious grounds.
The stated mission of the oath is as follows: “One day, all business leaders will hold themselves to the higher standard of integrity and service to society that is the hallmark of a true professional.” Yet we as managers are not social servants. This insidious line of thinking carries us to the brink of socialism. Reading the oath one realizes that four out of 7 points spell out a positive social agenda, and claims that this is merely a personal oath to be taken at one's choosing are put in doubt by the fact that the names of the oath takers will be displayed on-line for posterity. Then there are promises, or rather the threats by the oath creators that the next item on the agenda is to “give the oath more teeth.” Just what that means is a mystery but it would be wise, as I will attempt to show, to beware.
This oath is dangerous because it is part of a movement that seeks to level a direct frontal assault on liberty. The catch phrase has for a while now been “social justice.” But social justice cannot be attained unless society, which is an aggregate of hundreds or thousands of daily decisions by millions of people, is harnessed towards some common ends, usually by coercion the magnitude of which correlates with the ambitions of these social do-gooders. And the ambitions tend to grow over time.
It has always been the hallmark of liberty that we are free agents pursuing our own ends within the confines of the law. For business this means pursuing profits while playing by the rules.Yet the pursuers of social justice, if they are to succeed, must be able to channel the acts of free agents towards the ends they wish to achieve, and the only way to do this is by coercion. With business this usually takes the form of blackmail and outright extortion, with the media giving a helping hand. Nothing is easier than extorting money from a business, all it takes is some negative press and God knows there has been more than enough media outlets willing to help out. The general acceptance by society of the idea of social justice and the social responsibility of corporations to fund all sorts of pet projects is a sad degeneration of a society from free people to addicts hooked on handouts and the oath is simply another dirty needle.
This oath, by specifying the ends that business is obligated to pursue tramples over the whole idea of free agents pursing their own ends within the confines of an abstract and non-instrumental law, the very foundation of liberty and by extension a free market.
The problem is further complicated by the wording of the thing, so vague and so open ended as to put the manager at the whim of just about any special interest imaginable. We are not to advance our personal interests at the expense of the interests of our enterprise or society, yet what is meant by interests of society is anyone's guess. Furthermore, as a managers we are to protect the dignity and human rights of quite literally all people affected by our enterprises - an ambitious plan in light of how the oath also wants us to extend that idea to the future generations, and the advancement of their standards of living. Just how far down the line is not even specified. This is quite simply the most ridiculous extension of the stakeholder theory possible. How are we as managers to competently ascertain the interests of people who may not be born until after we die and who may not even ever be born?
And just what is meant by human rights? The idea of human rights has long ago taken on the character of a farce; apparently internet access is now a human right. Humans have rights, this not deniable, yet the codification of ever more wild, fanciful and ridiculous claims under the banner of human rights has had the effect of giving governments and special interests more planes on which to encroach upon our liberties. All rights carry obligations and if it is the right of someone to have internet access then someone has the obligation to provide it. Governments are usually very happy to step in and liberty loses out. Simply reading the UN Declaration of Human Rights must give one pause.
According to the original U.N. declaration of Human Rights all people are entitled to the “realization of the economic, social, and cultural rights indispensable for dignity and free development of personality,” just what this means is anyone’s guess and it is also anyone’s guess how we as managers are supposed to secure these to all people affected by our enterprise, even those yet to be born.
Everyone also“has a claim to just and favorable conditions of work,” yet by what standards is also anyone’s guess. The declaration does go on to claim that it is a human right to have holidays with pay, an indication of the detachment from reality that is the hallmark of this camp. When you vilify companies for not treating their employees in Bangladesh as well as those in Massachusetts you make all other businesses nervous about investing in developing countries. Yet human rights, as nice as they sound, cannot feed families. Nor should it be forgotten that it isn't high brow pronouncements of Western liberals that change the conditions of poor countries, it is investment and external contacts that do so. Pricing out millions in developing countries out of the workforce, denying them the benefits of external contacts to make Western liberals and naïve business school students feel better about their enlightened selves does little to help anyone but these elites.
A professor of mine once said that CSR is dangerous because once you open the door a bit to let the good guys in, the thugs get in as well. All objects are social objects, as Hayek once argued, which means they are what we perceive them to be. No oath can be ironclad in its defense against those who would wish to twist it to achieve their agendas. In other words even a sentence as clear as "I will not lie" is open to interpretation. The problem is that this oath is so open to interpretation, so vague, that not only does it leave the window open a crack, it leaves all windows and doors wide open, with a big welcome sign for some of the worst thugs imaginable to waltz right in.
I will be graduating in the summer of 2011, and I will not be taking this oath. I find the oath to be so vague and so open ended to be meaningless yet so far reaching as to be dangerous.A much better oath would have been the Columbia Business School oath which reads: “As a lifelong member of the Columbia Business School community, I adhere to the principles of truth, integrity, and respect. I will not lie, cheat, steal, or tolerate those who do.” Clear, concise, and stripped of all the pseudo-intellectual b.s.
Recently the MBA program I am attending decided that the Harvard Business School oath would be offered at graduation. It is this that prompted me to give a lecture about why this particular oath is misguided and dangerous and from that lecture evolved this article.
I believe that the HBS oath is an overreaction to the latest financial crisis. More fundamentally however, I believe that it is part of a movement which seeks to undermine the private sector and harness it for the “social good.”Or in other words to socialize the private sector on highly dubious grounds.
The stated mission of the oath is as follows: “One day, all business leaders will hold themselves to the higher standard of integrity and service to society that is the hallmark of a true professional.” Yet we as managers are not social servants. This insidious line of thinking carries us to the brink of socialism. Reading the oath one realizes that four out of 7 points spell out a positive social agenda, and claims that this is merely a personal oath to be taken at one's choosing are put in doubt by the fact that the names of the oath takers will be displayed on-line for posterity. Then there are promises, or rather the threats by the oath creators that the next item on the agenda is to “give the oath more teeth.” Just what that means is a mystery but it would be wise, as I will attempt to show, to beware.
This oath is dangerous because it is part of a movement that seeks to level a direct frontal assault on liberty. The catch phrase has for a while now been “social justice.” But social justice cannot be attained unless society, which is an aggregate of hundreds or thousands of daily decisions by millions of people, is harnessed towards some common ends, usually by coercion the magnitude of which correlates with the ambitions of these social do-gooders. And the ambitions tend to grow over time.
It has always been the hallmark of liberty that we are free agents pursuing our own ends within the confines of the law. For business this means pursuing profits while playing by the rules.Yet the pursuers of social justice, if they are to succeed, must be able to channel the acts of free agents towards the ends they wish to achieve, and the only way to do this is by coercion. With business this usually takes the form of blackmail and outright extortion, with the media giving a helping hand. Nothing is easier than extorting money from a business, all it takes is some negative press and God knows there has been more than enough media outlets willing to help out. The general acceptance by society of the idea of social justice and the social responsibility of corporations to fund all sorts of pet projects is a sad degeneration of a society from free people to addicts hooked on handouts and the oath is simply another dirty needle.
This oath, by specifying the ends that business is obligated to pursue tramples over the whole idea of free agents pursing their own ends within the confines of an abstract and non-instrumental law, the very foundation of liberty and by extension a free market.
The problem is further complicated by the wording of the thing, so vague and so open ended as to put the manager at the whim of just about any special interest imaginable. We are not to advance our personal interests at the expense of the interests of our enterprise or society, yet what is meant by interests of society is anyone's guess. Furthermore, as a managers we are to protect the dignity and human rights of quite literally all people affected by our enterprises - an ambitious plan in light of how the oath also wants us to extend that idea to the future generations, and the advancement of their standards of living. Just how far down the line is not even specified. This is quite simply the most ridiculous extension of the stakeholder theory possible. How are we as managers to competently ascertain the interests of people who may not be born until after we die and who may not even ever be born?
And just what is meant by human rights? The idea of human rights has long ago taken on the character of a farce; apparently internet access is now a human right. Humans have rights, this not deniable, yet the codification of ever more wild, fanciful and ridiculous claims under the banner of human rights has had the effect of giving governments and special interests more planes on which to encroach upon our liberties. All rights carry obligations and if it is the right of someone to have internet access then someone has the obligation to provide it. Governments are usually very happy to step in and liberty loses out. Simply reading the UN Declaration of Human Rights must give one pause.
According to the original U.N. declaration of Human Rights all people are entitled to the “realization of the economic, social, and cultural rights indispensable for dignity and free development of personality,” just what this means is anyone’s guess and it is also anyone’s guess how we as managers are supposed to secure these to all people affected by our enterprise, even those yet to be born.
Everyone also“has a claim to just and favorable conditions of work,” yet by what standards is also anyone’s guess. The declaration does go on to claim that it is a human right to have holidays with pay, an indication of the detachment from reality that is the hallmark of this camp. When you vilify companies for not treating their employees in Bangladesh as well as those in Massachusetts you make all other businesses nervous about investing in developing countries. Yet human rights, as nice as they sound, cannot feed families. Nor should it be forgotten that it isn't high brow pronouncements of Western liberals that change the conditions of poor countries, it is investment and external contacts that do so. Pricing out millions in developing countries out of the workforce, denying them the benefits of external contacts to make Western liberals and naïve business school students feel better about their enlightened selves does little to help anyone but these elites.
A professor of mine once said that CSR is dangerous because once you open the door a bit to let the good guys in, the thugs get in as well. All objects are social objects, as Hayek once argued, which means they are what we perceive them to be. No oath can be ironclad in its defense against those who would wish to twist it to achieve their agendas. In other words even a sentence as clear as "I will not lie" is open to interpretation. The problem is that this oath is so open to interpretation, so vague, that not only does it leave the window open a crack, it leaves all windows and doors wide open, with a big welcome sign for some of the worst thugs imaginable to waltz right in.
I will be graduating in the summer of 2011, and I will not be taking this oath. I find the oath to be so vague and so open ended to be meaningless yet so far reaching as to be dangerous.A much better oath would have been the Columbia Business School oath which reads: “As a lifelong member of the Columbia Business School community, I adhere to the principles of truth, integrity, and respect. I will not lie, cheat, steal, or tolerate those who do.” Clear, concise, and stripped of all the pseudo-intellectual b.s.
2011년 1월 23일 일요일
Economic Development is no sure thing
One of the writers who has really influenced my thinking has been the great British economist P.T. Bauer. He beautifully argues that central planning does not produce wealth. Instead, organic networks which result from the interaction of millions of independent individuals do a far better job of allocating resources. The formation of such networks depends on the ability of societies to generate human capital which, as Francis Fukuyama writes is seen the ability of people to come together to form voluntary associations, such as neighborhood groups, clubs, volunteer associations, churches, corporations and on the largest scale, societies.
Unfortunately many “developing” countries lack this capacity. The reasons for this inability range from issues of property rights and the respect for the rule of law, how competition is valued over cooperation, issues of interpersonal trust, the overemphasis on family over the extended society, attitudes toward authority, control over uncertainty, as well as a number of other factors.
The term “developing” suggests that there is a process that will inevitably lead towards a final status among the developed nations through the panaceas of economic engineering as though it a foregone conclusion. However sometimes development may not be in the cards as evidenced by billions of dollars of ineffectual aid.
While many economists may wish to overlook the messy issues surrounding culture in favor of more tangible variables, doing so is a mistake. Culture has very deep roots and a very strong influence. Bauer himself is very clear on the idea that in the end it is human capabilities that decide if economic development will ever happen. By looking at cultural pitfalls and concentrating efforts at reform in those areas, as well as concentrating efforts at creating the sort of conditions where people can be free to function as independent decision makers in a market order, development’s chances can only be improved, though never assured.
The fundamental issue here is whether a society can truly organize itself into a network conducive to development. Not through central direction but organically from the grassroots. Because it is only through such spontaneous self-organization that a truly complex society ready for development can eventually arise. The eventual success or failure of certain nations labeled as developing, and certain ones already hailed as the next great superpower may more realistically be ascertained when looking at them through such a lens. I personally remain skeptical.
Unfortunately many “developing” countries lack this capacity. The reasons for this inability range from issues of property rights and the respect for the rule of law, how competition is valued over cooperation, issues of interpersonal trust, the overemphasis on family over the extended society, attitudes toward authority, control over uncertainty, as well as a number of other factors.
The term “developing” suggests that there is a process that will inevitably lead towards a final status among the developed nations through the panaceas of economic engineering as though it a foregone conclusion. However sometimes development may not be in the cards as evidenced by billions of dollars of ineffectual aid.
While many economists may wish to overlook the messy issues surrounding culture in favor of more tangible variables, doing so is a mistake. Culture has very deep roots and a very strong influence. Bauer himself is very clear on the idea that in the end it is human capabilities that decide if economic development will ever happen. By looking at cultural pitfalls and concentrating efforts at reform in those areas, as well as concentrating efforts at creating the sort of conditions where people can be free to function as independent decision makers in a market order, development’s chances can only be improved, though never assured.
The fundamental issue here is whether a society can truly organize itself into a network conducive to development. Not through central direction but organically from the grassroots. Because it is only through such spontaneous self-organization that a truly complex society ready for development can eventually arise. The eventual success or failure of certain nations labeled as developing, and certain ones already hailed as the next great superpower may more realistically be ascertained when looking at them through such a lens. I personally remain skeptical.
2011년 1월 22일 토요일
The Degeneration of Democracy under Obama is gaining speed
Rep. John Lewis Cites ‘Pursuit of Happiness’ as Justification for Health Care Mandate
I think the ultimate blame in all this lies in the very nature of democracy, or how it has been practiced in the last half a century. The analogy of pigs at a trough and it is apt. The basic problem is that the focus has changed from obligations to rights, and rights are the biggest danger to liberty. People see the most outlandish things as rights these days and politicians are happy to appease. It buys them votes but on a larger scale it creates new plateaus on which government can act, and new ways it can interfere with our lives and steal our freedoms. A right is after all necessarily accompanied by an obligation and who is faced with these new obligations? The electorate, too busy in its feeding frenzy to realize it is eating its own curly little tail.
I am not myself a very religious person but the fall of Christianity, which created a mentality of thankfulness for what we have, and the obligation to work hard to hold on to it, has been reduced by the rise of secularism with the mentality of entitlement. We are entitled to things because these are our RIGHTS. All accountability goes out the window, as rights need never be justified, they simply are ours for the taking.
So it is here. Health care is now shown to be a right and who is going to enforce that right? Government of course and to enforce these rights some pesky things like liberty must be stepped on. What we see as the massive encroachment of government on our liberty, the destruction of the rule of law comes directly from the clamoring for more and more outlandish and imaginative "human rights" and the expectation that government will provide those rights to us.
It is now proposed by some that access to the internet is a HUMAN RIGHT. More absurdities are sure to follow.
And more ominously, I think that Lewis has probably tipped the Party's hand here. If Obama is elected to a second term, and freed of the pesky need to be reelected, and also faced with time running out on his power, expect MASSIVE socialization of the civil order. Using these arguments that we have the right to be happy, there will be some very very dangerous things developing, and a massive expansion of the welfare state is a near certainty. Obama is the most radical president the US has had since a long time, and will make even the New Deal look positively capitalistic in comparison.
I think the ultimate blame in all this lies in the very nature of democracy, or how it has been practiced in the last half a century. The analogy of pigs at a trough and it is apt. The basic problem is that the focus has changed from obligations to rights, and rights are the biggest danger to liberty. People see the most outlandish things as rights these days and politicians are happy to appease. It buys them votes but on a larger scale it creates new plateaus on which government can act, and new ways it can interfere with our lives and steal our freedoms. A right is after all necessarily accompanied by an obligation and who is faced with these new obligations? The electorate, too busy in its feeding frenzy to realize it is eating its own curly little tail.
I am not myself a very religious person but the fall of Christianity, which created a mentality of thankfulness for what we have, and the obligation to work hard to hold on to it, has been reduced by the rise of secularism with the mentality of entitlement. We are entitled to things because these are our RIGHTS. All accountability goes out the window, as rights need never be justified, they simply are ours for the taking.
So it is here. Health care is now shown to be a right and who is going to enforce that right? Government of course and to enforce these rights some pesky things like liberty must be stepped on. What we see as the massive encroachment of government on our liberty, the destruction of the rule of law comes directly from the clamoring for more and more outlandish and imaginative "human rights" and the expectation that government will provide those rights to us.
It is now proposed by some that access to the internet is a HUMAN RIGHT. More absurdities are sure to follow.
And more ominously, I think that Lewis has probably tipped the Party's hand here. If Obama is elected to a second term, and freed of the pesky need to be reelected, and also faced with time running out on his power, expect MASSIVE socialization of the civil order. Using these arguments that we have the right to be happy, there will be some very very dangerous things developing, and a massive expansion of the welfare state is a near certainty. Obama is the most radical president the US has had since a long time, and will make even the New Deal look positively capitalistic in comparison.
2011년 1월 9일 일요일
NYT does it again
NYT does it again
The problem as I see it is that while the Constitution of the United States is a brilliant work, it is flawed in that it does not go far enough to separate powers as to prevent democracy into degenerating into the inevitable trough. The NYT though would gladly see the constitution become even more limp and ineffective to stop the pigs from congregating.
The problem as I see it is that while the Constitution of the United States is a brilliant work, it is flawed in that it does not go far enough to separate powers as to prevent democracy into degenerating into the inevitable trough. The NYT though would gladly see the constitution become even more limp and ineffective to stop the pigs from congregating.
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