Working On A Full Length Description

 I used to post my stuff here. Haven't in years. If you're an old friend or fan (did I even have those?) just checking this out on a lark, head over to http://www.reddit.com/r/dasaw. My ideas are finally standing still long enough for me to give it a good solid written word treatment, and that is will you find my drafts.

Traffic Enforcement

I had a really bad near miss the other day. I was trying to merge onto the freeway, but there was a guy overlapping my rear bumper by a foot or so. I had already hit my signal, and accelerated to the gap in front of him. He accelerated too. I accelerated a little more; so did he, maintaining almost the exact level of overlap. I slowed down, intending to merge behind him... and even that didn't seem to help.

So I started moving over slowly, slowly enough to get the message across: coming through! Get out of my way, asshole! The moron accelerated, laying on his horn, pulling up alongside me. I was almost out of road, so I slammed by brakes to dodge behind him and finally managed to get in. I swear, if I wasn't in a company vehicle and a company uniform, there's a good possibility I would have followed this individual to do a little "citizen enforcement". As it was, I was just left with a bad taste in my mouth, with regard to how sporadic enforcement is, and how much it focuses on arbitrary targets like numerical speeds instead of real driver misbehavior.

It got me thinking about a furutistic method of traffic enforcement I've been toying with on and off (usually after witnessing some particularly egregious example of what I call "offensive" (in contrast to "defensive") or "competitive" driving. Current enforcement seems to rely exclusively on cruisers (or sometimes motorcycles) and radar guns. Expensive, and thus offering insufficient coverage. But imagine yourself in the following scenario.

You get home from work. You had a rather close encounter on the road; some asshole tailgated the fuck out of you, and then sped around you, nearly clipping your bumper as he went back into the lane in front of you (gaining a whole car length; yay). Or maybe you were trying to merge, and he seemed to be deliberately denying you entry. Or maybe you're in China or Russia, and someone literally jumps out in front of your car in an effort to defraud you.

You turn on your computer, intending to check your email and social media. One program in particular is indicating you got a message: your official government communications program. "What now?" you think to yourself, as you click on the message. In the message there is a short body of text and a link to a video on the traffic enforcement server. It's a video of what happened earlier, from start to finish, with a message saying, "We saw what happened today. Don't worry; we're on it. The video should be sufficient, but if you want to testify against the other driver the court date is at place on day and time." Seeing this, you know that two others have also received this link and a report: the asshole that damn near ran you off the road, and the judge assigned to traffic cases.

Here's how the system works from the cop's perspective. He sits at a terminal in a climate controlled building. On his screen(s) there are a bunch of video feeds, each coming from a camera drone perched on top of a combination charging station and landing pad. They are high up enough that he has a birds eye view of the entire stretch of highway he's responsible for. If someone's driving catches his eye, if their errant behavior is consistent enough he thinks he can get a good video of it, he can switch to drone pilot mode and follow the car from the air. Once he thinks he's got footage good enough to hold up on court, he sends the video to the court, the offender, and any other drivers he thinks might be interested in the case.

I don't know if we're yet at the point where a bunch of drones would be cheaper than a cruiser (though I'd be very surprised if we're not close to that day), but it would certainly allow the individual officers to monitor traffic patterns more efficiently, enabling them to locate and prosecute those drivers who's habits make them a dangerous disruption to that flow. Further, the use of video allows them to document actual dangerous driving, rather than having to rely on the simplistic record keeping of the radar gun.

On Negative Interest Rates

Reading Tuure Parkkinen's Fixing the Root Bug exposed me to a new idea: the notion that lowering interest rates actually can improve the economy, and that the only thing holding it back is the zero percent lower bound, that it is possible that a negative interest rate on risk free credit is necessary to bring the supply of and demand for labor into balance (that is, to bring the economy into a state of full desired employment). Initially, it seemed like an insane idea, my background favoring Austrian Business Cycle Theory, which proposes that it is excessively low interest rates that cause market crashes, and that more of the same can only set the market up for an even worse crash in the future. But I suspended my disbelief long enough to fully appreciate his argument. And further reflection on the idea made me realize that it's quite possible that, once risk factors are discounted out of the going rate, negative interest rates can and do exist, in the absence of government monetary and/or fiscal policy creating a "floor" on interest rates.

Imagine the following scenario. Parkkinen's argument takes hold, and a policy of pursuing negative interest rates (either through higher rates of inflation, or through nominally negative interest rates in a cashless currency system) is enacted. Maintaining cash balances may cease to be a method of preserving wealth. I am assuming here that the interest rate is stable; this is not a hyperinflation scenario. I am also assuming that gold is no longer taxed like an investment (people can buy and sell gold freely without having to report or pay taxes on it). Let us suppose certain people decide that, rather than holding their wealth as money, or buying a risk bearing real investment, they decide to preserve wealth as a stockpile of gold. Have they dodged the "inflation tax"?

That depends on the exact real interest rate, security costs, and so on. For the hoarder of gold is not without expenses. Gold can be stolen; it must be stored in a secure fashion. This cost must be discounted out of the benefit of evading the negative interest rate. And even with that cost covered, there is still a risk that security measures will fail; thus, the cost of insuring against such a loss must also be discounted out. Thus, holding one's wealth as gold has costs built into it, and these costs must be compared against the cost imposed by a negative interest rate in the government's money (and the opportunity cost of buying gold, as opposed to a real investment in productive activity, or even a desired consumer good).

It isn't necessary to include the government's money in this analysis. All this does is demonstrate that, in the absence of the government imposing a zero percent lower bound (through such measures as providing security for property and deposit insurance without corresponding user fees), "aggregate" negative interest rates can and will exist (even if it is borne unevenly by those who fail to secure their stockpiles against theft).

Additionally, costs of securing and insuring stocks of a commodity money are not fixed, but rather vary by circumstance. And one factor that should strongly influence the costs of security is the ratio between the potential rewards of larceny and the potential rewards of productivity. The more that can be had stealing from those who already have, relative to the rewards that can be had engaging in productive activity, the higher the costs of securing stockpiles of money. In other words, as the wealth gap grows, ceteris paribus, the lower the "aggregate" "risk free" interest rate becomes, potentially going well into the negatives.

Government credit with a negative interest rate can be seen as a competitive option, in this case. There are times when one is less worried about the return on one's money than the return of one's money. And I can't help but think it would be preferable, even for those who have money to save (and particularly those who lack the skills to provide their own security), for this negative interest rate to be expressed in a regular, central price, rather than being little more than the balance of successful and unsuccessful efforts to protect a stock of commodity money against theft. The former encourages people to "flee" into real investments; the latter, an ever spiraling cycle of envy and jealousy.

A change of heart: Government and Monopoly

Anyone who has perused this blog at any length will note my rather extensive libertarian background. Heck I was once a Libertarian, a member of the party. I attended meetings and everything. That was years ago, but I still carry the basic impulse to shun the centralization of power and value freedom over all else.

But over the years, I've explored many other areas. The work of Henry George was what got me started on this path, and the work of Tuure Parkkinen has taken me even further. I've been following the Comcast scandals. I'm deeply concerned both by ISIS and the possible unintended consequences of actively supporting their only marginally preferable opposition. In short, my views have become substantially muddied from my early anti-State origins.

One thing I've decided is that "government" vs. "private" is a false dichotomy. It doesn't really exist. What matters is "monopoly" vs. "competition", and whether a particular service is offered more competitively or monopolistically is dependent not upon the laws of men or the evils of industry, but upon the unique characteristics of that particular industry.

Monopolies will tend to arise in any area where three factors are present.

The best known but, in my opinion, the least important is a high cost of entry, which can slow the emergence of competition. I call it least important because even if it takes time for competition to emerge, if the potential profits of a competitor are high enough, and if the financial system facilitates it, a competitor will emerge.

The second, more important factor (particularly in combination with the first) is network value: when a product is literally more valuable because more people use it. In this case, even if one can bear the expense of entering an uncompetitive industry, it can be very difficult to establish a sufficient customer base to entice customers to switch to their product. Things like communications networks and (patented or copyrighted) computer development environments have this quality.

The third, most important factor is the ability of an existing provider to physically exclude competitors. This would include roads, particularly when space for a route is limited (a mountain pass, for example). It also includes communications networks, due to the fact that the electromagnetic spectrum is not infinite, and neither is space for cables.

Restaurants have a fairly low capital cost to get started: ingredients, cooking tools, skills, and just a little space, and you're good to start. If people like it, then you can expand. But a man can sell sandwiches out of a truck if he wants. And it doesn't really matter how few or how many people favor the restaurateur's services; a meal is just as good (or bad) if only one person eats that type of meal as if thousands, millions, or even billions.

Contrast that with a telecommunications network. Laying cable is expensive. Acquiring the right of way to lay cable is expensive, and potentially exclusive. Even without cable, the electromagnetic spectrum is limited. In short, establishing a network is very, very expensive. On top of that, firms with more customers can, by the very nature of the industry, offer superior service to firms with fewer customers; you can contact more people on the big network than the small network. While any new industry will have a competitive phase, any industry that has these three factors will tend toward the monopolistic, as the largest company can provide the most valuable service, and the costs of competing are prohibitive. There is just too much more profit available to a monopoly than to any other form of organization.

As I mentioned in a previous entry (The Anarchist Underpinnings of The State), protection from violence also tends toward monopoly.

First, a clarification on the nature of "monopoly". "Monopoly" is not a global phenomenon. There has never been a global monopoly on anything. This is not the same thing as saying there has never been a monopoly. Monopoly is a local phenomenon. If there's only one cable company in town, that's a monopoly (and if there's only two ore three, that's an oligopoly). It doesn't matter if the next town over is serviced by a different company. It's the same thing with roads and rails: whoever owns the road that leads to your house has a monopoly. It's the same with whoever owns the only bridge over a particular river in a particular place; the existence of other bridges in other places is irrelevant to the person who must cross that bridge. It's the same thing with health care under the old US model. If your company only does business with one company, and that's your only choice, its a monopoly. It doesn't matter that you could do business with a different insurance company if you had a different employer; if you only have once choice where you are, that's a monopoly. You don't even need to append "local" to the term; all monopoly is local. Even if there was one global company that did all business in a particular industry, it would still be local... to Earth.

And the theory of monopoly is the reality of monopoly: the customer gets screwed, in price, in service, or, most likely, both. Whether we call it "government" or a "private company", the unaccountable provider of a vital service has no real incentive to treat its customer with respect. And while the monopoly provider of violent protection can, if it chooses to do so (and it often does), create artificial monopolies, oligopolies, and otherwise zones of restricted competition, there are industries where a certain level of monopoly is unavoidable, without some form of violent intervention.

And this is the traditional (Modern tradition, anyway) response to the threat of private monopoly: regulation and anti-trust law. Break up the monopoly, put them under the partial control of some (tax funded) government agency. And though it doesn't work that well in my opinion, it's still better that the alternative: totally unaccountable monopoly. But is it the best alternative?

My libertarian past cannot explain why my favorite sources of news are the BBC, the CBC, and NPR. My libertarian past cannot explain my disappointment with the behavior of companies in non-competitive industries. My libertarian past cannot explain how to avoid the inevitable monopoly on the provision of violent protection. My libertarian past can explain my Geoist beliefs... but I haven't found that explanation very useful for anyone other than myself.

I reject my libertarian past.

The chief difference, I think, between what we call "private" and what we call "government" is that government, at least in theory, has responsibilities beyond providing profit to principals. It is enmeshed in an ancient tangle of reciprocal responsibility, most recently expressed through the popular election of representatives in the West. It must consistently balance its desire to provide benefits to its factional supporters with its need to avoid provoking a loss of legitimacy among the masses. The monopoly on violence is a tenuous thing, and its most important asset.

What I figure is that, if monopoly is inevitable in a given industry, if we're pretty well guaranteed to get screwed by whatever company has control in a given area, why should we consent to both pay the expense of doing business with an oligopoly (since that seems to be the best government can manage) and the expense of paying for a regulatory infrastructure? What if, instead, we got screwed by government owned monopolies (in those industries that are going to inevitably be monopolistic) in exchange for more public services and/or lower taxes?

How to fix the debt:

Step One: Balanced Budget Amendment

The wording I propose is very simple. With the addition in red:

The Congress shall have Power... To borrow Money on the credit of the United States in a time of War as declared by Congress.

I personally don't see any reason why Congress needs the "flexibility" provided by the opportunity to borrow outside the circumstances of a life-and-death struggle... that is, War. Note that the adoption of this amendment amounts to a declaration of bankruptcy. Without the authority to roll over the debt day by day, the Treasury become incapable of managing the debt within months, possibly weeks, maybe even days or hours. This leads us to

Step Two: Organize US government debt holders for a massive class action suit. The representatives of debt holders would be empowered to renegotiate the debt.

Step Three: Seek an appropriate mediator of the renegotiation. If most of the debt were held by US citizens, the the Supreme Court would be an appropriate venue... but a lot of the debt is held internationally. I don't know how much. Possibly a special tribunal appointed by the United Nations would work.

Step Four: Establishment of a realistic schedule of repayment.

The fact of the matter is that the government can't actually repay the current debt. Instead, it relies on others to repay it for them. They get the money to pay back the debts by borrowing from other lenders. They then pay back those lenders by borrowing from someone else. I'm guessing the reason that the "debt ceiling" has been in the news so much over the past decade is that, during a bad economy, it becomes difficult to find the next borrower to pay back the previous one.

This is the government equivalent of shifting credit card debt around from one card to another, and back again. It only works until the card issuers pull the plug. What I am suggesting is the government equivalent of debt consolidation.

Let new bonds be issued, with repayment lengths as long as 50, 100, even 200 years, if necessary. Let some of the principal be written down. Restructure the entire debt into a form that can be gradually paid off without having to shuffle it around. With the amendment from Step One in place, there's no other option.

The Anarchist Underpinnings of The State

For most people, it seems, The State "just is". While a lot of thought seems to have gone into the question of what the purpose of the state is, whether or not it is a desirable institution, I've not read a whole lot about the question of why The State exists in the first place, outside old assertions that it was originally brought about by a deity. In the following paragraphs, I hope to describe how The State is favored by market forces in the same fashion as productive enterprise, and in so doing advise caution when contemplating Anarchist Utopia.

Most analyses of market processes I have read contrast market action with violent action. It is presented as a choice: wealth acquisition by production and exchange OR by theft. But not everybody makes the same decision in that contrast: there will always be those who steal, and so people must have some means to defend themselves and their property. Even in this matter, there are many choices to make: to defend oneself and one's own property, to act in concert with others, to hire help, to rely upon the State. The ability to do violence, wither initial, defensive, or retaliatory, thus shapes the decisions market actors the same as the availability of capital, prices, and so on.

Let us suppose a situation of Anarchy, in which there is no State, but rather all relations are either voluntary or violent. What are the market incentives to various forms of violence?

First off, the distribution of violent capabilities must be considered. In some societies, the capacity for violence will be more generally distributed; in others, more concentrated in select individuals. I think it can be assumed that, ceteris paribus, the capacity for violence (for whatever purpose) will be more concentrated in societies with a more developed division of labor, less concentrated where the division of labor is lower. I don't believe there is anything special about the skills and tools associated with violence. In a society where few know how to grow, process, or preserve their own food, there will also be fewer who know how to use and maintain weapons. So while in a less economically developed society every person can be assumed to have access to and be familiar with the use of a serviceable weapon or two, in a more developed society there are and will inevitably be some who develop violent skills and arsenal to a point where they can make a living off them, and others who cringe at the thought of even handling a weapon (at the extremes). What professional use of weapons will the market favor in such a situation?

I divide the "professional" use of weapons into a spectrum bounded by two extremes. At one end you have the violent criminal: one who uses his capacity for violence purely for the satisfaction of his desires at the unwilling expense of others. On the other hand you have the virtuous mercenary: using violence only in exchange for payment, to prevent or remedy the violence of those at the other extreme. But ultimately, this is a spectrum. Even the most virtuous might succumb to the temptation, not necessarily to rob someone outright, but perhaps to bully a bit? Strongarm a deal? Maybe take a somewhat iffy contract, enforcing questionable property rights? On the other end of the spectrum, perhaps a robber might take pity on a pretty girl and protect her, instead of robbing her (or worse)? Maybe he has an aged mother who needs help with some of the local toughs? Maybe someone finally offers him enough money to take up legitimate employment... for a time? And then there's the middle of the spectrum, where you've got men of violence who are concerned purely with the money. If it is profitable to protect, they will protect. If it is profitable to rob, they will rob. This suggests the traditional "protection racket", a forerunner of The State if ever there was one. But which does the Market favor?

Consider the costs of living by violence. First, there is the material: the direct costs of maintaining weapons, a stock of ammunition, as well as the opportunity costs of developing and maintaining the skills of violence. There are the moral  (purely psychological and social) costs, which will be greater or lesser depending on the individual's level of aversion to the use of violence for various purposes. Finally, there is the cost of managing mortality risks. He who lives by the sword dies by the sword... but not necessarily right away if he is careful and clever. For whom will the gains be greatest relative to the costs?

We can assume that whomever is engaged in a particular kind of violence has found a way to minimize the moral costs of their particular kind of "business". While the moral cost is an important component when discussing cultural degeneration, the importance of tradition, religion and/or spirituality and such, I think it can be ignored for the purpose of economic analysis. But what about material costs and mortality risks?

The virtuous mercenary must defend his clients against both the ordinary thug and the operator of a protection racket. He must maintain a capacity for violence sufficient to deter both, and must risk retaliation and the hands of either. The operator of the protection racket, on the other hand, particularly if he has successfully "horizontally integrated" the various protection rackets in his area of operation, needs only maintain that capacity necessary to deter the basic thugs; his own enforcers can be kept in check with but a command. The virtuous mercenary will not be a problem unless he chooses to attack the mercenary's clients.

This brings us to a second factor: economies of scale. A larger business in protection (whether they allow their customers the choice or not) will, assuming they don't surpass the technical limits of effective coordination, be able to provide more protection for lower costs. This is due to their ability to concentrate more force than their competitors; the mere threat discourages violence they would otherwise have to remedy at full cost.

Of course, to be competitive in the market, firms must pass on a portion of their own savings to their customers. If one is in the market for protection, the services of a large firm who makes offers one "can't refuse", is not only the less risky option... it's also probably cheaper (assuming away the cost in personal pride, of course). The larger and more responsive to their "customers" such an operation is, the more "State-like" it becomes.

Thus, from a situation of anarchy, absent a culturally homogeneous population that is willing and able to incur the costs of excluding something like The State, The State will inevitably arise from nothing more than the primordial soup that is the market in a situation of anarchy. The process by which the State arises, however, is messy, as violence is as much a part of the process of "horizontal integration" as "production" itself, and violence, like other "industrial" processes, can have undesirable "byproducts" (read: "collateral damage").

On Negative Campaigning

Something I've figured out during my 35 years on this earth and only just now found the words for is this: people seem to identify most strongly in a negative fashion. Go among a group of like minded people and try to say something good about what they all ostensibly like, and usually you'll get a lukewarm reception. Go in their midst and insult their common interest and, of course, they'll rally in defense. But nothing gets quite so much of a reaction as going in and insulting something they collectively hate.

I'll give you an example of what I'm talking about. I am a nerd. As such, I am a devoted fan of a number of different things, Japanese music included, and I mod a Google Group dedicated to this interest. If someone shows up and posts a song, or a picture associated with the subject, they'll get a few +1s, maybe one or two, maybe even eight or ten. Then some kid comes in with a "Justin Bieber sucks" memepic... and the forum goes nuts in agreement. Then I mod it out of existence, since I don't want this group to be about what we hate, but what we like, and Justin Bieber is decidedly off topic.

This is just a juvenile example, but I've seen it everywhere. Tell me the same doesn't happen in political groups. A politician talking about how good his policy will be will maybe get a few yawns and some accolades from a few marginalized intellectuals. Claim that his opponent eats babies and maintains a shrine to Hitler in his basement... now that will get a supportive reaction. Politicians understand this, of course, and the most savvy of them will always make use of this. I pity the poor, principled politician who attempts to campaign in a purely positive manner.

I can guess why this is. In a past world, one in which people were divided into far more, and far smaller, and far more independent groups of people, warfare was pretty much a constant in life. A tribe or clan needs unity most when an enemy threatens from without, and a people who lacks this negative unity is likely a people who will not pass their ways onto the next generation.

But perhaps it is time we become conscious of, and reexamine, this particular impulse. What was once an important adaptation may well now be maladaptive. So next time someone shows up with a post decrying something you agree is a bad thing... stop and think a moment. Is this really necessary? Is it a true threat? Is the self-congratulatory dogpile that is almost guaranteed to ensue worth the psychic damage that hate, even of the best intentioned kind, can cause?