Category: Uncategorized

The Two Faces of Economics

Michael Hudson explains the difference between Western neoliberal economics based on prices and debt, and historical economics based on actual production of goods and services.

Economics is not really a science as it’s taught. It’s a lobbying effort by the finance, insurance, and the real estate sector: the FIRE sector. It’s a lobbying effort by the parts of the economy that don’t produce goods and services, that only collect income without playing any productive role at all. Empty prices – that is price without any underlying value. And that is being promoted as economic growth.

And basically, it’s as if economics is like a criminal case in court where you have two opposing attorneys.The 19th century attorneys were prosecutors for the landlord class. They said, “Why should we have to pay the heirs of the warlords who conquered England and France to collect ground rents without producing anything? What possible function do they play? Why should we have to pay banks money for creating interest for creating credit that actually the governments can simply create their own money, or at least create credit for a productive purpose? And why do we permit monopolies, most of which were created by the government to sell off to creditors because it couldn’t afford to pay them their debt, why do we have to do anything of that? We don’t need it. Let’s get rid of the rentier sector.”The rentier sector being landlords, and bankers and monopolists.

Well, by the end of the 19th century, the rentiers fought back. And they developed what a defense attorney would do in a trial. They said, “There’s a whole different reality. There is no such thing as unearned income. There is no such thing as economic rent. Everybody deserves what they have. The landlord produces a valuable service in renting out the land and the housing and deciding who to rent to. And the bankers make a wonderful service when they charge interest. And especially when they charge a penalty fee because that helps make people pay their debts on time and that’s essential for productivity. So of course, we charge penalty fees as part of the gross domestic product. And monopolies are also part of the GDP, because after all, the monopolist is simply creating an orderly market.”

So, the problem is that instead of economic students getting both sides of the prosecution and the defense of the rentier economy, they’re only getting one side of the picture. They’re getting the defense of the rentiers, not the classical economics. And that’s why in graduate economic courses they no longer teach the history of economic thought. They no longer teach economic history. Because if you had the history of economic thought, you’d know that contrary to what Margaret Thatcher said, there is an alternative, that things don’t have to be this way.

There is a reason why China is growing so rapidly, and the American economy is being squeezed tighter and tighter. And that’s because its basically using its revenue to create new means of production and create a broader environment.

It’s true that it provides education freely, instead of charging $50,000 a year, which is what people have to pay in New York. But if you would say what if we credit China with every person with a degree of having paid $50,000 a year, obviously, that would be much bigger.

It’s true that the Chinese people do not have to pay $4,500 a month rent, which is the average rent here in New York City. Does that really make them poor? Or does paying the $4,500 a month rent that increases America’s GDP, actually turn out to be an economic burden?

This is why the Great Bifurcation between The Empire That Never Ended and the growing BRICS movement was both inevitable and unavoidable. The masters of the shell game can only keep winning as long as the suckers keep playing. But Russia has been kicked out of the game, China refuses to play the game except on its own terms, and their resultant success is encouraging dozens of other nations to stop playing the game.

Call it what you will, but Samuelsonian or Neo-Keynesian economics have always been nonsensical; so too is Friedmanite monetarism, because it is impossible to meaningfully quantify anything in a metric that is so readily expanded at will. One can only base social policies on “economic growth” so long before the reliance upon a myth results in insane and deleterious consequences.

DISCUSS ON SG

Exercise Your Skepticism

Nassim Nicholas Taleb on the importance of exercising skepticism, from an interview with Tim Ferriss:

Nassim Nicholas Taleb: I noticed a lot of people are skeptical, particularly conspiracy theorists, they’re skeptical of small things, but not about big ones. So they get taken for a ride. Find me a conspiracy theorist or find me someone who’s naturally skeptical of all things and I’ll show you a turkey. So I wanted to find people who are fundamentally skeptic, being skeptic about important things, not about small things, because —

Tim Ferriss: What would be an example of a big thing that they would be skeptical of?

Nassim Nicholas Taleb: A big thing like — let me give you an example. I wrote a paper, it never ended up in a book, on the stock market and religion. It’s called “The Bishop and the Economist.” And I said that those who are skeptical about the existence of God or the non-existence of God, that are skeptical about religious matters, typically tend to be complete suckers when it comes to stocks. They believe in a stock market, or believe in some kind of pseudo-scientific theory on whatever it is, they believe in, but they don’t believe in religion. And the reverse, and people who are religious typically they’re harder. And there’s some, I don’t have research on that. There’s a guy called [inaudible], I think, who did some studies about skepticism, people go to religion about affairs, skepticism where it matters. And I wrote about it, I think in The Black Swan, skepticism where it matters. And I noticed that a lot of these big skeptics were not skeptical of God and things you can’t do anything about. They were skeptical of the charlatan. They are skeptical of things, of someone trying to take advantage of you. That’s where you exercise your skepticism.

I could not agree more. It’s a pity, nay, I daresay it is a tragedy, that NN Taleb was not more skeptical about the vaxx. But perhaps that was a big thing.

DISCUSS ON SG

Conservatardery

Why does anyone continue to pay any attention to mainstream media conservatives? It puzzles me. Very nearly to a man – or woman – they failed the most basic test of analytical capability of the last decade as they fell for what was quintessentially a globalist and government program of the very sort they nominally oppose.

Megyn Kelly, a veteran journalist and podcaster, said Wednesday that she deeply regrets getting the COVID-19 vaccine because she believes she may have suffered a vaccine injury. Ms. Kelly said that she regrets getting vaccinated and then boosted, saying she doesn’t think it was necessary—and that a doctor told her that an autoimmune condition she developed after getting the shot may be related to the vaccine.

“I regret getting the vaccine even though I’m a 52-year-old woman because I don’t think I needed it,” Ms. Kelly said during a Sept. 6 episode of her podcast “The Megyn Kelly Show.”

“I think I would have been fine. I had got COVID many times, and it was well past when the vaccine was doing what it was supposed to be doing,” she added. “For the first time, I tested positive for an autoimmune issue at my annual physical. And I went to the best rheumatologist in New York, and I asked her, do you think this could have to do with the fact that I got the damn booster and then got COVID within three weeks? And she said yes. Yes. I wasn’t the only one she’d seen that with,” Ms. Kelly said.

Her current vaccine regret stands in contrast to remarks she made in April 2021, when she said she had “zero qualms” about getting the shot.

“Am getting the [Johnson & Johnson] vaccine this [weekend]. Have zero qualms [because] have spent a life immersed in a media obsessed with fear-mongering that is often irresponsible and untrue. Do what your doctor tells you to do and ignore everyone else,” she said in a post on X, formerly Twitter.

While it’s good that she’s telling the truth about her negative consequences, what about this provides you with evidence that her opinion about anything is to be taken seriously, let alone valued, in any way? Why would you ever watch a show, or listen to a podcast, or read a book, in order to learn what Ms Kelly thinks about anything? The same goes for every single other vaccinated conservative media figure. It wasn’t rocket science.

To the extent that “conservatism” stands for anything, it is supposed to stand against big government programs intruding on the lives of the citizens. And yet, there are few government programs bigger in scope or more intrusive than the various aspects of the Covid-19 program, from acquiring respirators to lockdowns to vaccines and vaccine mandates. But all it took was a wildly unconvincing health scare to convince conservatives to abandon their nominal core principle.

DISCUSS ON SG

Excellence is in the Details

Fawlty Towers is rightly considered one of the greatest television shows in the history of television. So it’s interesting to learn this little detail about it from the man married to the actress who played Sybil Fawlty.

It wasn’t just the lines that Pru and the cast had to familiarise themselves with.

‘In the case of Fawlty Towers, the devil was in the detail.

In addition to writing the dialogue, John and Connie had gone to great pains to explain exactly what was happening in each scene and why. Put it this way: the script for a 30-minute episode of a sitcom would normally be around 60 pages long, but for Fawlty Towers they were something approaching 140.

In other words, the reason Fawlty Towers so often resembled the synchronized perfection of an oft-shown play or musical is because it was essentially written as a play, with the script containing the choreography and the character motivations as well as the dialogue.

While it doesn’t rise to the level of Tolkien’s invented histories and languages, or Umberto Eco’s recreation in string of his monastery in order to time the length of the conversations properly, it does serve as a spur to the creative mind to up his creative game.

DISCUSS ON SG

They Call it “Luck”

But it really doesn’t have much to do with chance or anything random. A team of Italian scientists tests the connection between the distribution of various attributes and the distribution of wealth.

What factors, then, determine how individuals become wealthy? Could it be that chance plays a bigger role than anybody expected? And how can these factors, whatever they are, be exploited to make the world a better and fairer place?

Today we get an answer thanks to the work of Alessandro Pluchino at the University of Catania in Italy and a couple of colleagues. These guys have created a computer model of human talent and the way people use it to exploit opportunities in life. The model allows the team to study the role of chance in this process.

The results are something of an eye-opener. Their simulations accurately reproduce the wealth distribution in the real world. But the wealthiest individuals are not the most talented (although they must have a certain level of talent). They are the luckiest. And this has significant implications for the way societies can optimize the returns they get for investments in everything from business to science.

Pluchino and co’s model is straightforward. It consists of N people, each with a certain level of talent (skill, intelligence, ability, and so on). This talent is distributed normally around some average level, with some standard deviation. So some people are more talented than average and some are less so, but nobody is orders of magnitude more talented than anybody else.

This is the same kind of distribution seen for various human skills, or even characteristics like height or weight. Some people are taller or smaller than average, but nobody is the size of an ant or a skyscraper. Indeed, we are all quite similar.

The computer model charts each individual through a working life of 40 years. During this time, the individuals experience lucky events that they can exploit to increase their wealth if they are talented enough. However, they also experience unlucky events that reduce their wealth. These events occur at random.

At the end of the 40 years, Pluchino and co rank the individuals by wealth and study the characteristics of the most successful. They also calculate the wealth distribution. They then repeat the simulation many times to check the robustness of the outcome.

When the team rank individuals by wealth, the distribution is exactly like that seen in real-world societies. “The ‘80-20’ rule is respected, since 80 percent of the population owns only 20 percent of the total capital, while the remaining 20 percent owns 80 percent of the same capital,” report Pluchino and co.

That may not be surprising or unfair if the wealthiest 20 percent turn out to be the most talented. But that isn’t what happens. The wealthiest individuals are typically not the most talented or anywhere near it. “The maximum success never coincides with the maximum talent, and vice-versa,” say the researchers.

So if not talent, what other factor causes this skewed wealth distribution? “Our simulation clearly shows that such a factor is just pure luck,” say Pluchino and co.

First of all, this science, such as it is, should suffice to end, once and for all, the absurd insistence by American Jews that their statistically inordinate amount of wealth and power amassed in a matter of decades has anything to do with their imaginary average 115 IQ.

However, “just pure luck” is not a variable. While this method is sufficient to demonstrate the lack of correlation between talent, IQ, hard work, and other specific variables with wealth, to simply assign the causation to random chance is incorrect. The much more reasonable answer is that the team failed to test the variable that is most strongly correlated with wealth, which is positive connection to the central societal distributors of wealth.

There is no way such a model could account for ticket-taking, and yet we repeatedly observe that mediocre ticket-takers succeed while much more talented independents “experience unlucky events”. Is there one single person in the world who believes that Ben Shapiro is better behind the microphone than Milo Yiannopoulos or Owen Benjamin, and that he is also a more talented writer than Bruce Bethke, Chuck Dixon, and me?

Color me dubious.

Is there anyone who genuinely believes CNN can’t do better than hire a CEO and Chairman who was fired as the Director-General of the BBC for covering up the Jimmy Saville scandal?

I am of the color dubious.

It will be interesting to see what happens when these researchers discover that what they call “serendipity” fails to produce the results they are expecting, and when “serendipity” suddenly begins to cause them to experience unlucky events.

A useful term, that “serendipity”.

DISCUSS ON SG

Adieu Divine Right

You can put this one squarely in my list of failures. This morning, I relinquished all of the development and publication rights to the excellent fantasy wargame Divine Right, nine months before our rights to it expired, due to my inability to get Divine Right reprinted or get the computer game developed. The project wasn’t a complete failure, as we did manage to get Minarian Legends published, but I didn’t have the bandwidth to oversee the other aspects of the project and the volunteer project leaders didn’t have the ability to complete either the boardgame or the computer wargame.

Anyhow, as a fan of the game and its creator, I wish the next group of developers great success with the updated Divine Right, and eventually, one hopes, Scarlet Empire. Sadly, it will not be featuring this excellent cover, based on the original artwork, that we had produced for our now-cancelled edition.

For some reason, it appears that gaming volunteers are reliably less able to get a job done than those who volunteer in various other areas of development, from print books to open source office projects. I was very briefly involved in what was supposed to be a Linux distro dedicated to games, and I have never, ever, observed a more useless horde of worthless gammas, all of whom had multiple, often contradictory, opinions, and none of whom were willing to lift a finger to actually do anything at all. I quit the project three weeks after being given responsibility for overseeing the development of the first demo game for the distro.

Despite being 21 years old, The Battle for Wesnoth is still the flagship for open source game development.

My theory is that those who are actually willing and able to successfully develop games are mostly already doing it on their own, as the thriving independent game scene demonstrates. That leaves a lot of people who very much like the idea of game development, but are more interested in the trappings than in actually dealing with the decidedly less-romantic reality of it. The same is true of those who want to be a writer more than they want to write anything; it was surprising to observe how many of the members of a much-accomplished Minnesota writers’ group of which I briefly was a guest never actually wrote anything at all. However, it’s important to keep in mind that one can’t actually know if one has the ability to do something new until one tries; volunteers must always be respected for being willing to try rather than criticized for an inability to do.

That being said, it’s still rather remarkable that the Arkhaven, SocialGalactic, and UATV teams have been able to accomplish bigger and more difficult tasks in less time than the various groups of game volunteers have. I have some ideas as to why, but nothing concrete enough to state an opinion on them.

So, if you want to know why we’re not planning to pursue anything in the game space beyond finishing the ALT-HERO RPG for the backers and possibly licensing various properties to other game companies, now you know why. I’m not blaming anyone but myself here; that experience with the Linux project was 14 years ago, and I should have reached the correct conclusions at the time.

This doesn’t mean I won’t do any game design, but in the future, I’ll do the development myself or we’ll hire a proven professional team to do it. And let’s face it, it’s not the worst thing to give up the Divine Right license, as this means we’ll own all the rights to whatever fantasy wargame I end up designing in the future.

DISCUSS ON SG

New York Runs Out of Magic Dirt

The Mayor of New York City turns anti-immigrant.

Mass immigration will “destroy” New York City unless something is done about it, Mayor Eric Adams has warned. Speaking at a meeting in Manhattan, Adams said the city was being overwhelmed by migrants from all over the world and faces a $12 billion budget deficit.

“Never in my life have I had a problem that I did not see an ending to – I don’t see an ending to this,” Adams explained at a town hall-type meeting on Wednesday evening. “This issue will destroy New York City.”

The most populous US city is taking in more than 10,000 migrants a month, according to Adams.

But how can the city be overwhelmed by immigrants when they strengthen the economy and bring much-needed vibrancy and diversity to the city?

Sounds a little racist to me. And definitely anti-semitic. Mayor Adams should lose his job, his bank account, and his access to social media, don’t you think?

It’s always fascinating to see how direct and personal experience with immigration tends to change even the most liberal individual’s mind on the subject.

DISCUSS ON SG

Thursday Arktoons

ALT★HERO Episode 88: Self Defense

FAIRY DOOR Episode 41: Thresholds

TATTERS Episode 14: Come Kea

CHATEAU GRIEF Episode 287: Some Assaulting

CHUCK DIXON PRESENTS: ADVENTURE Episode 91: The Brigand

BEN GARRISON Episode 115: The Squatter in Your House

STONETOSS Episode 222: Prisoner of Conscience

ALICE IN WONDERLAND Episode 1: Discovering Wonderland

The Arktoons production team has launched a new spin on an old children’s classic, Alice in Wonderland.