Saturday, March 28, 2015

Measuring socially necessary abstract labor time

In his comment (and on his excellent blog, Social Democracy for the 21st Century) LK argues that it's impossible to define, much less measure, socially necessary abstract labor time (SNALT).

First, the "abstract" in SNALT refers to labor abstracted from the specific things that laborers do. Marx argues that because the specific tasks are incommensurable (how do compare sewing a seam to gluing a sole to a shoe?) the specific tasks used to create different commodities cannot be a basis of a consistent exchange value. In this sense, abstract labor time is just the fact that someone has worked for a specific period of time, without regard to the specific tasks that person has performed.

But there are definitely factors other than time that affect productivity. LK asks, "How do you take an average of a heterogeneous factor like labour, when there is so much difference in profession, skill, competence, experience, and skills to be 'averaged'?"

To get average abstract labor time per unit, first count the number of objects produced, count the total number of raw person-hours used to create those products, including the time necessary to create all the capital, all the skill training, and all externalities, and divide by the number of objects. If you want marginal SNALT, find the least efficient producer who is still in business, and do the same thing just for the last unit they produce. Standard economic theory predicts that the marginal cost of the last unit should equal the minimum average total cost and the price. (LK challenges this aspect of standard economic theory, and it might be incorrect, but marginal cost is not exactly a novel economic concept.) Any effects other than time, skill, competence, experience, etc. should all be normally distributed and should cancel out in the aggregate. This is not rocket science.

Of course, the Labor Theory of Value (LTV) is not the only thing affecting actual money prices. You would want to look for shocks (the price of gas just after the beginning of the Iraq war, for example, would probably not reflect SNALT), monopoly and monopolistic competition (SNALT is a valid predictor of prices only under perfect competition), hidden positive and negative externalities, imperfect or asymmetric information, network effects, etc.

Remember, Marx never intends the LTV to be a tool for predicting prices that hedge funds can use to make a lot of money in arbitrage. The LTV is a conceptual tool to explain what it means to say that the capitalist exploits the working class: the capitalist class expropriates labor time without compensation from the working class.

Friday, March 27, 2015

Marx's project: Introduction and commodities

I think that to understand Marx, it is necessary to understand what his project was. I'm writing quickly, so I'm not going to cite, and this is my personal interpretation of my (rather limited) reading of Marx. As I mention below, all theories are false, but some are useful; I'm describing here why I think Marx's theories about capitalism are useful. I am not a truth relativist; I'm saying only that our theories about the world are always limited and approximate.

Marx starts with two observations: first, by the middle of the 19th century, capitalism had increased the forces of human production by at least a couple of orders of magnitude relative to feudalism; second, most people in industrialized economies were living in abject misery, far worse than under feudalism. Why? Smith (and perhaps Ricardo) were convinced that greater economic activity would lead to increased happiness for everyone, including the working class. By the mid 1800's, almost a century after Smith published The Wealth of Nations in 1776, the condition of the working class had actually declined. Why?

Marx rejected the hypothesis that the rulers of capitalist society are just especially bad people. Indeed, although Marx's seething rage at the suffering of the workers is apparent, in his economic writing, Marx rarely (if ever) employs a moral critique of anyone or anything, even capitalism. (Marx did not exhibit the same reserve in his personal relationships.) Marx was enraged, to be sure, but he knows that the fact that he is enraged is of no value; he wants to understand why he's enraged, and what precisely he's enraged about. Even before writing Capital, Marx was already convinced that not individual "evil" capitalists, but rather the fundamental structure of capitalism was responsible for human misery. Thus, Unlike his predecessors and other economists, Marx was completely uninterested in a descriptive, positivist account of how capitalism works. Instead, Marx's analysis of capitalism was geared towards locating precisely what it is about the structural relations of capitalism that causes the misery of the working class.

Marx was a theoretician, not a scientist, and he was trying to solve a problem, not simply describe the world as it is. It is important to understand that, like every scientific theory, Marx's theory is a model. All models, scientific and economic, cut away, i.e. abstract, important parts of reality. In much the same sense, theories of gravity abstract away things like air resistance. Looking only at gravity will not explain why aircraft fly, but to make an aircraft fly, we still have to understand gravity on its own terms. Because all models abstract away important parts of reality, all models are wrong; some models, however, are useful. Because a theory of gravity, neglecting air resistance, is useful for making aircraft fly, we continue to use it, in addition, of course, to theories of aerodynamics.

So, Marx begins Capital with a theoretical analysis of the commodity. Marx defines a commodity as:
  1. A physical object that
  2. by virtue of its physical properties has some use-value (i.e. its consumption satisfies some human want),
  3. can and must be created using directed, willful human effort (i.e. labor), and
  4. is created for the purpose of exchanging it for other commodities.
If something does not fulfill any of the above conditions, Marx is no more interested in it than he is in the speed of light or aesthetic appeal of the Mona Lisa. (Not that such things aren't interesting — they are interesting — but they're not part of Marx's project. Marx also tacitly assumes (at first; later in Capital he makes the assumption explicit), that people are actually exchanging commodities in free, uncoerced competition with each other. So, if someone creates something without use-value, it is not a commodity, no matter how much directed, willful human effort went into it. If something has use-value, but is not created by human labor, it is not a commodity. If someone uses human labor to create something they themselves will consume, it is not a commodity. (Marx focuses on the "goods" part of "goods and services", but the argument for services is virtually identical.) Marx then asks the question: what determines the quantity of one commodity that will exchange for some quantity of another commodity?

Using this definition, Marx comes to the surprising conclusion: the exchange-value of commodities, i.e. the quantity of a commodity that will be freely exchanged for a quantity of another commodity, depends only on the total quantity of socially necessary abstract labor time (SNLT) used to create the commodity. Marx first argues that for a free exchange to take place, there must be something equivalent in the commodities exchanged. If there were nothing at all equivalent, then exchanges would be arbitrary and highly variable: one person would exchange a coat for ten pairs of shoes, others would exchange ten coats for one pair of shoes, and everywhere in between. But, given competition, even if someone really wanted a coat, and had more shoes than he knew what to do with, if one person with a coat will take two pairs of shoes and another demands ten pairs, he will still buy from the cheaper seller, and vice-versa. There are some price variations, but I don't see a gallon of gas selling for \$0.10 at one station and \$10.00 at another.

Marx rejects the idea that use-value has anything to do with exchange-value. Marx argues that use-values are incommensurable. We cannot quantitatively compare the use-value of keeping one's body dry with the use-value of a good meal. No one, Marx argues, would exchange comparable use-values, i.e. exchange a coat for a coat. Since use-values are incommensurable, they cannot be equal. And this position makes sense, even if we could numerically compare use-value. I need a certain amount of food every day to survive — a hamburger has infinite use-value to me — but I don't sell myself into slavery for a meal. Similarly, my local restaurant has more hamburgers than the owners could possibly eat — they have zero use-value to the owners — but they don't just give them to me for free. Furthermore, my computer is far more useful to me than my car (if you forced me to choose, I would give my car without hesitation), but I paid twenty times more for my car than for my computer. The whole point of trade is that both parties gain more use-value than they give up; there can be nothing directly equivalent about a positive-sum game.

Marx argues that what can be, and is, equal about two commodities is the socially necessary abstract labor time used to create them. If, counting all the labor time, including the labor time necessary to create the physical capital, it takes one hour of labor time to create a pair of shoes and two hours to create a coat, then two pairs of shoes will have the same exchange-value as a coat; in a money economy, then a coat will have double the money price of a pair of shoes. Again, this makes sense: if I someone is selling a coat for three times the price of a pair of shoes, then I will just work and create the coat myself, giving up the time I could use to create only two pairs of shoes. More precisely, if a company can make identical coats for two-thirds the price their competitors charge, they will do so, and sell all the coats they make.

The qualifiers "socially necessary" and "abstract" are important. "Socially necessary" means that inefficient producers relative to the technical and social state of production do not get to charge more for their commodities than efficient producers. "Abstract" means that the details of precisely how some commodity is produced is irrelevant; what matters is only the actual time (and perhaps other factors, such as intensity and agreeableness/disagreeableness of the labor) involved.

Again, I will reiterate: the Labor Theory of (Exchange-)Value is a model. Marx does not argue that if you go out and measure the money price and socially necessary abstract labor time of every product on the market, you will get a nice neat regression line with only random errors. In much the same sense, if you drop a hammer and a feather, the hammer will hit the ground well before the feather. But Marx does say that if there really is free competition, and if labor really can create more of a commodity, then yes, there will be a direct correlation between the prices and socially necessary abstract labor time. Similarly, if there is a substantial discrepancy between prices and socially necessary abstract labor time, then there will be a violation of the assumption of free competition.

Sidebar: Measuring socially necessary abstract labor time
Next (if I get to it): Labor and labor power

Sunday, March 15, 2015

Marx was (mostly) right

Economists! Be more Marxist:
When I say "we", I don't just mean we Marxists. I mean all economists. I suffer no dissonance at all between writing (more or less) conventional economics in my day job and being some kind of Marxist. The important distinction is not between heterodox and orthodox economics, but between good and bad economics - and Marx is often good economics, in the sense of fitting the facts.

Monday, March 09, 2015

The autonomous individual

What does it mean to be an "autonomous" person? This is a riddle, in Adorno's sense.

Briefly, Adorno argues that philosophy is not like science. Philosophy does not ask "questions" with "answers" in the scientific sense of the word. Philosophy does not ask questions like, "What is the charge on an electron?" with answers like, "1.602176565(35)×10−19 coulombs." Philosophy deals in riddles — negations, contradictions — which cannot be "answered" but must be "sublated" or negated again. A riddle is a negation: "When is a door not a door?" The response sublates the riddle, negates the negation: "When it's ajar." The whole system, riddle and response, dissolves the contradiction of the riddle, and, when nontrivial, creates a new level of meaning, or at least destroys a delusion. Adorno does not, however, argue that riddles are in any sense transcendental, that they have nothing to do with science; instead, science (broadly conceived), in addition to answering questions, poses or creates riddles; without science, there would be no riddles for philosophers to untangle.

Every individual's consciousness is constructed by his or her family, society, and culture. A person who develops without any human society does not develop any consciousness at all; consciousness, personality, is not by itself something latent in infants, in the same sense that a plan for their bodily development is latent in their DNA.* We have certain propensities latent in our physical neurology: the development of language, of empathy, of reason, and perhaps some instincts (or perhaps not), but there is not an actual personality latent in an infant mind; there is at most only the propensity to develop some personality.

*Yes, I know that the environment plays a crucial role in the development of the individual phenotype. But the difference between physical development is, I claim, substantively different from mental development. There is nothing at all in mental development even vaguely similar to the phenotype's genetic "latent plan."

Saying that individual consciousness is socially constructed is not, of course, to say that the development of any individual consciousness is predictable, even if it were, at root, deterministic. Development is far too complicated to be predictable in the same sense that the positions of the planets of the Solar System are predictable. But predictability is not the issue: the issue is construction of consciousness from the "outside."

So, if consciousness is constructed, if it is ineluctably social, cultural, what does it mean to be autonomous? If my consciousness is constructed by the prohibitions and compulsions of my society, in what sense am I ever anything other than radically unfree? Given that, how can we ever distinguish between a free and an unfree society? If a slave's psychology could be constructed such that he wanted to be a slave (and why could it not?) would he still be a slave?

There is also the problem of a critique of society and culture: the critic's own consciousness, the fundamental basis of his or her critique, is a construction of society and culture: all criticism is from the "inside"; it can never be from the "outside." Or at least not radically outside; every critique is from the inside of some society and culture. A judgment that a society is good or bad is not the judgment of an individual consciousness; it is the judgment of a society of itself.

Similarly, what about an individual's self-judgment? When I feel pride or guilt, about myself, where does that judgment come from? Whose judgment is it? My own? Society's? Can any judgment of myself be anything but society's domination of the self? Even this post is American capitalist culture, which constructed the consciousness and personality of that possibly fictitious thing called "Larry," questioning itself. Why should any resolution not be simply tautological?

The problem of autonomy is, I think, the true "hard problem" of consciousness. (What passes for the "hard problem" in contemporary philosophy, i.e. how can non-conscious matter form consciousness, seems to me, after years of study, to be a scientific question with an answer, or just a pseudo-problem.)

Saturday, February 21, 2015

Dark Leviathan

Dark Leviathan [link fixed]: The Silk Road might have started as a libertarian experiment, but it was doomed to end as a fiefdom run by pirate kings.
Ulbricht built the Silk Road marketplace from nothing, pursuing both a political dream and his own self-interest. However, in making a market he found himself building a micro-state, with increasing levels of bureaucracy and rule‑enforcement and, eventually, the threat of violence against the most dangerous rule‑breakers. Trying to build Galt’s Gulch, he ended up reconstructing Hobbes’s Leviathan; he became the very thing he was trying to escape. But this should not have been a surprise.

Monday, February 16, 2015

Criticism of religion

The New Atheist project is to criticize religion. We pursue this project by a variety of means: from the driest philosophical analysis (e.g. me) to polemics to mockery gentle (e.g. Jesus and Mo) and savage (e.g. Charlie Hebdo). We have our flaw, but only a minority* of New Atheists support geopolitical violence (and that's because most New Atheists are also citizens of imperialist nations, and Western imperialism is not a project initiated by New Atheists), and I literally know of zero New Atheists who condone, much less advocate, personal violence. Regardless of his motivations, regardless even of his opinion of religion, Craig Hicks' murders are absolutely infantile. Our project is not about our enmity with religious people; our project is our criticism of a way of thinking. We want people to be happier, not dead, and we believe religion makes most people unhappier than they could be. And, unlike for example, Black people, atheists are not generally subject to unjust state violence (and many benefit from unjust white, male, class, heteronormative, and cis-gendered privilege); we have no particular need of armed self-defense.

*That's my sense, without the rigorous statistical analysis I don't have the resources to perform.

There are, I will repeat, right-wing, American exceptionalist New Atheists, e.g. Sam Harris, Christopher Hitchens, and Ayaan Hirsi Ali, but their advocacy for Western imperialism is as much politically motivated as religiously, and they are, with no small hypocrisy, allied with an explicitly Christian government. But if you look at what we actually say, you will find neither passive acceptance nor active advocacy for personal violence against religious people. The worst I think you can find is, as PZ Myers argues, a lack of attention specifically to creating a positive ethical system.* But you will find no New Atheists listing Muslims to kill, you will find no New Atheists glorifying cowardly criminals such as Hicks, you will find no New Atheists saying, "The only good Muslim is a dead Muslim." And if you do find such a site, let me know: I will lead the charge against them, and not just exclude them from the New Atheist community, but make them the object of public ridicule. (And if my charge is unsuccessful, then I would leave the New Atheist community instantly.)

*I don't particularly agree with Myers. Almost all New Atheists take a level of ethical functioning for granted, a level that obviously excludes Hicks, and it's boring to talk about things we all agree about. It's much more interesting to talk about our general ethical lapses, e.g. the rampant sexism and only-slightly-less-rampant racism within the atheist community.

Our project is to criticize religion, to delegitimize religion as political and social power. If you want to go to church on Sunday, that's your own business, but if you put your collar on backwards, study the mythology of early Iron Age slaveowning patriarchal goat... herders, you still have zero special privilege to set the moral, ethical, or political agenda.

Religious people despise our project, and they want us to just shut the fuck up. All religious people want to preserve religious privilege in general, and then argue — or fight — about which religion is better. Even the Infamous Brad would rather excuse the misogyny, homophobia, anti-science propaganda, right-wing authoritarianism, and scriptural support for violence in Islam than admit his own religion is at best a hobby and at worst a delusion.

If the primary cause of religious bigotry, discrimination, oppression, and violence were New Atheists' criticism of all religion, then there might be some case for asking us to rethink our position. But the real primary cause of religious bigotry, discrimination, oppression, and violence is, of course, religion itself. You say that religion had nothing whatsoever to do with the Charlie Hebdo murders? That relgion had nothing whatsoever to do with murders of David Gunn, John Britton, James Barrett, Shannon Lowney, Lee Ann Nichols, Robert Sanderson, Barnett Slepian, and George Tiller? That no one ever religiously justifies the abuse of children? That religion had nothing to do with the Indian Partition and between 200,000 and 1,000,000 deaths? Fair enough; even the New Atheists will admit that there are a lot of political and non-religious cultural reasons going on there. But then you say it's ridiculously obtuse denialism that New Atheists might look for other reasons for Hicks' murders?

I seem to recall something about beams and motes in the Bible.

You religious people want to slaughter each other over your gods. Not all of you, and, lately not even most of you, but a lot of you: even per capita a lot more religious people want to slaughter other religious people than New Atheists want to slaughter anyone. (Sometimes just because of different religions; more often using religion to justify the slaughter.) And most of you no longer want to slaughter each other in no small part because of us, the atheists, secularists and some religious people, all of whom dared subject religious beliefs to rational scrutiny, and to condemn the stupidity and brutality of those beliefs on secular, humanistic grounds.

We're having none of that. We will generally condemn Hicks, he is no longer "one of us" in any sense. He is no longer a New Atheist because we define New Atheism to exclude infantile personal violence: it's our group, and we can define ourselves as we please. Anyone who praises Hicks, anyone who advocates what Hicks did, is right the fuck out. And not just out of our community: we will do what we can to humiliate, delegitimize, and, for such as Hicks, advocate state power to punish, those people in public society.

But we will not shut up. We will not stop criticizing religion. We will not stop pointing out the stupidity, cruelty, and brutality of religion, and we will not stop saying that what you think God does or does not want, good or bad, has nothing whatsoever to do with how reasonable, caring, loving, empathetic and sympathetic human beings behave towards each other.

Sunday, February 15, 2015

Craig, Brad, and the New Atheists

On February 10, 2014, Craig Hicks killed three young people. Hicks actions are abhorrent, criminal, and the deaths of his victims unequivocally tragic. Hicks is not in any way, shape, or form heroic; he is a criminal, a coward, a murderer.* My arguments against our "justice" system notwithstanding, he needs to be punished to the full extent of the law.

*I am not a journalist; I can pre-judge Hicks to my heart's content. I can live with certainly being excluded from sitting on his jury. If I'm wrong, I'll apologize.

Hicks is, among other things, an atheist, and his victims were, among other things, Muslims.

Thus, we do have to ask: did the New Atheist "community," however defined, contribute to this crime? I think the question cannot simply be dismissed; it needs to be asked, and we must answer it carefully and deliberately.

In Muslim Panic, Satanic Panic?, the Infamous Brad, presumably a NeoPagan, whom I've been reading for years, and for whom I have tremendous respect, answers in the affirmative: The New Atheist community is nothing "but an anti-Muslim hate group." If Brad's charge is true, then the New Atheist community definitely would bear substantial responsibility for Hicks' murders, even if it is true that Hicks is legally insane or has a serious medical mental illness.

But, uncharacteristically, Brad's argument is substantially flawed.

Brad first mentions the Washington Post article, "Chapel Hill killings shine light on particular tensions between Islam and atheism," where author Michelle Boorstein explores the possible relationship between New Atheism and Hicks' murders. Boorstein delivers a balanced piece, raising the question of the relationship between "public criticism and violence," in contrast with statements by spokespersons of notable atheist organizations decisively rejecting Hicks' kind of violence. Brad then contrasts Boorstein's article with The Baffler article, The Nuances of Nonbelief. In this article, Stuart Whatley argues that atheism, being simply the absence of belief, has no overarching ideology that could be a legitimate cause of Hicks' crimes.

Brad dismisses Whatley's argument out of hand first as a "No True Scotsman" fallacy, but this dismissal seems completely unfounded. A "No True Scotsman" fallacy is a fallacious move from an empirical claim to a definitional claim. As far as I know, no New Atheist claims empirically that all atheists are nonviolent (or even especially good people). Whatley's argument may be flawed — he ignores, I think, that atheists who speak publicly about atheism, and offer public criticism of religion, have formed at least a loose community, with some socially constructed cultural values — but Whatley does not seem to move from an empirical claim to a definitional claim. At best, we might define a "true" New Atheist is one who renounces senseless, infantile, and socially illegitimate* violence such as Hicks'; since Hicks does not meet the definition, he is not a true New Atheist. In just the same sense, I personally was born in the United States of French/Italian/English parents and have never lived in Scotland; therefore, I am not a True Scotsman. That argument would hardly be fallacious: even though the definition might be arbitrary, I simply do not fulfill any component of the definition.

*One does not have to be an absolute pacifist to be a New Atheist.

Inexplicably, Brad compares the New Atheists vs. Muslims to the #NotAllMen vs. #YesAllWomen controversy. I know absolutely nothing about the details of the latter controversy, but on general principles, there's an obvious context there: the existence of a millennial, socially constructed hegemonic patriarchy, from which all men benefit, whether they like it or not. A man cannot simply use his personal attitudes to excuse himself from patriarchal privilege. But there is no such thing as a socially constructed hegemonic atheism. Furthermore it's not NotAllAtheists, it's exactly one atheist out of millions, who's also apparently a gun nut and an American chauvinist. (And furthermore, an atheist who had, according to Michael Nugent, written extensively on social and religious tolerance.) The comparison is especially inapt because Brad himself admits that "atheists are, in America, the single most hated belief group, with approval ratings on par with or maybe even below religious extremist terrorist groups." Hardly the stuff of hegemonic power.

Brad's main point is to compare the New Atheists to the NeoPagans' shameful participation in the prosecution of alleged "Satanic ritual abuse" in the 1980s and 90s. Again, this comparison seems entirely unfounded. In what sense at all are any New Atheists whatsoever endorsing the legal persecution of innocent people for public relations gain? Has a single even moderately prominent New Atheist said, for example, that we should not challenge the illegal imprisonment of innocent Muslims in Guantanamo Bay just because they are Muslims, because we want to curry favor with the authoritarian neoimperialist United States government? Brad seems to think too that criticism of Islam is somehow insincere, that New Atheists have latched onto Islam just because Muslims are a popular political target. I can assure Brad personally that this is not true: New Atheists criticize Islam because we are genuinely critical. We — or more precisely some authors, notably Harris and Hitchens — might have become more popular because the target of our criticism happened to match United States imperialist policy, but the motive for criticism of Islam rests on genuine disagreement, not simple opportunism.

Brad's main point, however, is not his worst point. His worst point is a paragraph literally libelous hate speech:
Not all atheists are bigoted anti-Arab, ant-Islam wannabe hate killers, but yes all Muslims have to fear New Atheists. After the New Atheist communities’ most prominent authors have spent the last half dozen years or so beating this drum, I don’t see how anybody can call the New Atheists anything but an anti-Muslim hate group. These are people who can’t be distracted from their message of anti-Muslim hate by oppression or violence from any other religious community, whether it’s the veto on public policy the Ultra Orthodox hold in Israel or the anti-gay secessionist rhetoric of Alabama’s fundamentalist Chief Justice or terrorist acts by Christian Identity groups or anti-abortion groups or anti-Islam terrorism by Buddhists in Sri Lanka. Nope. Try to bring any of that up, and they change the subject back to, “the Muslims are coming to kill us all!”
First, if public criticism of a group is "hate speech," then this paragraph is prima facie hate speech: whether or not his criticism is warranted, Brad is being publicly critical of New Atheists. Could some nutjob read Brad's criticism and that conclude that some New Atheists, whom all Muslims should fear, need killin'? The only alternative to public criticism is that everyone suck everyone else's dick 24/7.

But, more importantly, I know what hate speech is: it is saying literally that people are inhuman and deserve death. "The only good Indian is a dead Indian." So... Sam Harris perhaps crossed the line when he said that Islam might, if they acquired long-range nuclear weapons, require a preemptive nuclear strike. Harris has defended this postion as entirely hypothetical, but I still don't like it one bit; it looks way too much like the "ticking time bomb" hypothetical to justify torture. And, of course the late Christopher Hitchens was notably in favor of a global war on Islam. And fine, if Brad wants to criticize Harris and Hitchens, he would have my support, but to generalize this criticism to all New Atheists is a blatant lie. Some New Atheists are also pro-imperialism, some, such as Jerry Coyne, are pro-Israel. — there's a considerable range of opinion in our "community" — but my sense (without a rigorous statistical sampling) is that pro-imperialists are a minority among New Atheists.

Brad asserts that New Atheists talk only about Islam, and refuse to discuss any other religious oppression. This is a flat out lie. We can't discuss everything, but New Atheists talk about a lot of stuff. Just look at the front page, for example, of Planet Atheism. There is a range of opinion and topics. Notably, the front page includes a story critical of the lack of the media coverage and the weak government response to a Christian terrorist intending to blow up mosques in Jerusalem. There's a lot of stuff critical of Christianity there too (duh). New Atheists have written about Irish blasphemy laws, Christian anti-evolutionism, Christian theodicy, etc. We also talk about race relations, anti-vaccination stupidity, and feminism.

All this from a cursory investigation of Planet Atheism and a few prominent New Atheist blogs. PZ Myers, has even written two thoughtful pieces on the responsibility that New Atheists really do have in Hicks' crimes: Own it ("I do not think that atheism compelled [Hicks] to kill Muslims, just as I don’t think Islam compels one to become a suicide bomber, or Christianity compels one to bomb abortion clinics. But I do think that the ideology must accept some responsibility for failing to teach people not to do those things.") and Beliefs have consequences ("I don’t think there’s a significant component of atheism that preaches for violence against believers, but there are a large number of atheists who seriously try to argue that atheism should include no moral component at all."). The New Atheist discourse is a lot richer than Brad would have his readers believe.

The only thing Muslims have to fear from New Atheists are our words: we will criticize Islamic misogyny, authoritarianism, superstition, and, yes, its scriptural and ideological support for political and personal violence, which goes far beyond any violence justified in resisting Western imperialism. The only reason Muslims have to fear imperialism from New Atheists is that, sadly, many New Atheists are embedded in an imperialist capitalist system that we did not create, a system bent on a conquest of the (oil-bearing) Muslim lands we did not begin: the proper criticism should be directed against imperialism, not New Atheism. And the only reason Muslims have to fear personal, individual violence from New Atheists is because writers like Brad and Luke Savage (see also my response) spread bigotry and vicious lies about us. That's hate speech.


I have deeply regretted that I did not proceed far enough at least to understand something of the great leading principles of mathematics, for men thus endowed seem to have an extra sense.

— Charles Darwin, Autobiography.

Freud wrote that love involves the undervaluation of reality and the overvaluation of the desired object. While the correct valuation of a person is an odd, if not impossible idea, we might say Freud meant something like this: for various reasons, many of them masochistic, we become involved with others who cannot possible give what we ask for; we can wait as long as we wish, but they do not have it, and one day, if we can bear to abandon our fantasy and see clearly, we might face reality straight on.

— Hanif Kureishi, "A Theft: My Con Man," qtd by Emran Mian

Sunday, February 08, 2015

Savings and Investment

It is a trope of neoclassical economics that we have to trade off present consumption for investment, to increase future consumption. While this trope has some value, in conceals as much as it explains.

In (still way oversimplified) real terms, we consume the real (physical, tangible) goods and services created by the previous production cycle. There's no point in not consuming those goods: at best we can put some in storage; at worst we just waste them.

The choice between consumption and investment is not a choice between today's consumption and tomorrow's consumption, it is a choice between tomorrow's consumption and the day after tomorrow's consumption.

At the beginning of each production cycle*, we decide what to produce, which will be available (and must be consumed or employed in production) at the end of the production cycle and the beginning of the next cycle. Furthermore, each production cycle inherits the choices made at the beginning of the previous cycle, less depreciation.

*I am making the obviously unrealistic assumption that all production has the same cycle, and all production is synchronized in this cycle. The analysis, however, still holds if for multiple, heterogeneous overlapping production cycles. We just make more decisions more often, but all the decisions are still production-cycle-lagged.

So, on January 1st, we (the members of a national economy) have a warehouse full of consumer goods, and a lot of capital, human and physical. On Jan 1, we decide what to produce in the coming year, and we can choose between:
  1. producing consumer goods to fill up the warehouse at the end of the cycle
  2. maintaining our existing capital stock (repairing buildings, factories, physical infrastructure, and machinery)
  3. creating new physical capital (new buildings etc.)
  4. creating new human capital (training workers and professionals)
  5. researching new technology (both scientific research as well as new forms of industrial and professional organization)

And, of course, we have to decide in detail precisely what consumer goods to create, what capital to maintain, what new capital to create, what new technologies to produce.

These are not all-or-nothing or mutually exclusive choices; instead, we have to decide how many resources (labor, land, and existing capital) to allocate to these broad tasks. Our choices are constrained (or at least influenced) by the choices made in the previous cycle, since both physical and human capital persists (less depreciation) persists across production cycles.

The point here is that we have to choose not between present and future, but between different futures. It is completely irrational to choose in the aggregate not to consume what we want and has already been produced; not consuming what has already been produced does not add one iota to our future consumption, and, in fact, is a "signal" that we should produce not more but less; it's irrational to produce things people appear to not want to consume.

The money system fethishizes this decision: it makes a decision that in reality is a decision between different futures into a decision that falsely appears to be between the present and the future. When I get my paycheck, I appear to have to decide if I want to consume right now the goods and services I can buy with my entire paycheck, or consume less right now and put some of the money in the bank, where it will (ideally) be allocated to investment for future consumption.

But by choosing consuming less right now, what I am really doing, ideally, is allowing someone else to choose consume more right now. It must be so: in the non-ideal case, if no one consumes what I forego, we are actually wasting the last cycle's production and beginning a paradox of thrift, with disasterous consequences. Present savings (foregoing consumption) is at best just zero-sum game (and at worst a negative-sum game).

Thus, the real mechanism, what the money system is concealing is thus: Alice consumes less today of what we produced yesterday, and Alice (implicitly) allows Bob to consume more. This exchange of present consumption has exactly zero real effect on what is produced in the coming cycle: what we produce in the coming cycle has nothing to do with who consumes what we have already produced. Since the exchange has no real effect, it must therefore have moral effect: Alice is "virtuous" (abstemious), and Bob is "vicious" (profligate). Because of her moral superiority, Alice gets to decide how many of society's resources are allocated to new investment, and she gets to consume more of what will be produced at the end of the current cycle; actually, at the end of the cycle she gets to say that because she has more moral entitlement to consume, she is more virtuous by foregoing even more than she is entitled to consume, and morally deserves more decision-making power about what to produce in the next cycle, and, she will receive even more entitlement to consume what is produced at the end of that cycle. Nassau Senior makes this argument explicit.

Put so plainly, it is obvious why this social arrangement has to be fetishized. No one would stand for it if they knew the truth: Alice's present "virtuous" abstemiousness has absolutely no real effect on future production, so her abstemiousness does not materially entitle her to anything. Even worse, the whole system falls apart if everyone is "virtuously" abstemious; this system fundamentally requires that Bob be "viciously" profligate. A moral system that requires vice to avoid catastrophic failure is no moral system at all.

(I am not talking about the choice between working a lot vs. a little, or working on more vs. less socially desirable production, or working more vs. less efficiently, during the current production cycle. All of these choices have an obvious real effect on the amount produced at the end of the current cycle, and the it there's a rational material justification for differential allocation of consumption at the end of the cycle. We might still not want to actually create differences of allocation, but if we did, I think we could do so out in the open without fetishization.

Of course, decisions about how hard or effectively we work during the cycle occur after we have made decisions about how to allocate resources to production. These kinds of decisions do not affect our earlier decisions, which is the problem at hand. Expectations about these decisions can affect the beginning-of-cycle allocation decisions, but expectations are not actual reality.)

So if this system is fundamentally irrational, what could we do instead?

Suppose we are at the beginning of a production cycle, with a lot of stuff to consume in the warehouse and a capital base. The best minds of science (i.e. not economists) give us the following choices, in percentages of available labor and percentage increase over the last cycle's production:

New Investment
% of available labor
Net Additional
0% 0% 6%
20% 3% 3%
40% 6% 0%

(We can also choose values in between these points, assuming some more-or-less continuous functions.)

I'll assume (just to simplify the model) that we're close to the optimal mix of consumer goods and service; we just might want more of everything. I won't distinguish between new human and physical capital. I'll ignore the government.

Additional Productivity compounds: our total productive capability increases at the end of the cycle; which means that we can produce even more in the following cycle. Additional Production does not compound; it just means we have that much more stuff in the warehouse, but no change in our inherited capital.

The "capitalist" way is that each person (household) begins the cycle with some amount of money which varies by person. We follow this procedure:

  1. We auction off all the consumer goods in the warehouse, which people will consume during the period. This money goes to consumer firms. Some people don't spend all of their money.
  2. The consumer firms pay the amount invested, plus a premium, to their investors from the previous cycle. Since all the goods in the warehouse have been sold (except for those nobody wants), this money has to be reinvested or "saved" (stuffed in the mattress).
  3. Each person with money left over allocates that money to new investment: They give the money to producers of consumer goods, who (hopefully) spend it on producers of new machinery or human capital.
  4. People auction off their labor to producers; producers of consumer goods compete for labor with producers of capital goods. The money received from auctioning off consumption goods (less payments to previous-cycle investors) and from investment is used to purchase labor. Firms can "save" money if they choose.
  5. The money is paid to workers at the end of the cycle. Note that in this model, production of new capital (unrealistically) requires only labor.
  6. Based on the allocation of labor, we end up with some mix of production of consumer goods and capital.
  7. Producers of consumer goods who have investment money for new capital pay the producers of capital goods for that labor. All of this money goes to the workers creating capital goods.
  8. Companies use the labor to create new capital and consumer goods, and fill the warehouse back up, and we go back to step 1.

One defect in this procedure is that the supply of money is fixed. This means either that people bid less and less money for any given consumer good (because, assuming we're using some labor to create new capital, the quantity of stuff in the warehouse keeps increasing. However, since people can "save" money from one cycle to the next, neither spending nor investing it, there's an incentive to hold onto money to buy goods more cheaply in the next cycle. But if too many people "save" like this, there's no money for investment, productivity doesn't grow (or can fall, if existing capital isn't maintained), and prices will rise.

We have at best a chicken game, where people who "save" their money benefit from those who invest their money. The best outcome is if no one "saves" at all, but what will actually happen is that some people will "save", and we will allocate an inefficiently low amount of labor to create new capital.

To be more efficient, we should introduce new money into the system. But where? How much? Who decides?

Again, the capitalist way is to insert a step between step 3 and 4 above. We create a special type of institution, the bank, which can create new money. Based on their judgment about how much people want to invest directly (by direct investment in step 3), and how popular products are (based on the auction in step 1), they create new money and give it to producers of consumer goods to buy new capital. Firms give investment money back to the bank in step 2 just as they give money to individuals.

This has a two-fold effect. First, it directly stimulates additional investment. Second, if the bank creates enough new money, there will be just enough inflation (prices rise for consumer goods overall in the step 1 auction, even though there is more stuff in the warehouse than the previous cycle) that no one has an incentive to "save" money, i.e. stuff it in the mattress, until the next cycle's auction. (The right amount of money to create is expected compounding economic growth plus 2 percent inflation plus or minus adjustment for errors in previous cycles' expectations.) With enough legal and social controls (bank regulations, examiners, a central bank, etc.) this system more or less works.

But the defect noted above still exists: there is absolutely no material reason why holding back some money from the auction for goods in step 1, and thus consuming less stuff relative to people who don't hold back money, should give individuals power to decide how much investment happens in the present cycle, nor a material reason to receive extra money in the next cycle. People who consume less from the previous cycle are not, by virtue of consuming less, materially affecting the consumer goods or investment goods we can produce in the next cycle. That production is constrained only by the existing capital stock and the availability of labor.

The capitalist system tends to magnify even initially small differences in wealth. People with less wealth need to spend more of it in step 1 just to get the basic necessities of life; people with more wealth can afford to save more for investment, which gives them even more money in the next cycle. It is possible, with different kinds of government action to correct wealth inequality. However, the government does not really stand "outside" the system: people with wealth have disproportionate power not only over the economy, but the government as well, and they can and will (rationally) resist correcting wealth inequality.

The communist (transitional communist, or "true" socialist) way is simply to dispense with individual investment, which has no material effect anyway; it's just an arbitrary method to socialize investment. All of the investment happens through the bank, and the bank is run democratically, with everyone having an equal voice on how new money is allocated, advised by experts who will inform the people of the material consequences of investment. We still keep the auction for goods in step 1, but we expect people to spend all of their money at that step (except for money they want to keep in the mattress just in case). There's no incentive to invest individually. We still keep the auction for labor in step 4, but we expect everyone who can work to work at least a little. (There are extra mechanisms to make this happen.)

The only wealth and income inequality comes from people who choose to work more, or work in more socially desirable activities, or work more efficiently. This sort of inequality does not get magnified. If someone works extra hard in one cycle and gets more money, that extra money doesn't translate to forever getting more money; it's a one-shot deal. If someone wants to get extra money in every cycle, she has to work extra hard in every cycle.

Sunday, February 01, 2015

Ideas about "political correctness"

Apparently, Fredrik deBoer is out of ideas about what to do about political correctness.

deBoer tells some nasty stories about the abuse of political correctness. And I believe him, in the sense that he's not making up the stories, and I will even grant that they are representative of something larger. But what is that something larger?

I'm 50 years old, and I've been in college classrooms for five years, and I haven't seen anything at all even remotely resembling what deBoer describes. Of course, I live in one of the flyover states, not exactly a bastion of leftism, progressivism, or liberalism. And, although I'm a communist, most of my IRL friends are Economics professors, Econ and Math students, and English tutors. (Can you tell I study and work at a college campus and spend almost all of my free time there?) And I rarely hang around with leftists.

But my (lack of) experience doesn't mean that what deBoer describes isn't real; at best it shows what he describes isn't completely ubiquitous. (In contrast, for example, to some of the egregiously silly things they teach us in undergraduate economics.) But again, what is deBoer actually writing about?

deBoer is writing in response to Jonathon Chait's cringeworthy essay, Not a Very P.C. Thing to Say. The question is: are Chait and deBoer actually writing about the same thing? There are some superficial resemblances, but some notable differences. Chait argues that "Political Correctness" is pervasive, even ubiquitous, and seriously compromises public discourse. (Chait, is, of course, completely full of shit.) deBoer describes instances of bullying. Bullying is bad, to be sure, but they're simply not in the same league as what Chait talks about.

Money quote: The political correctness is "enforced by the children of privilege." So. We have privileged people bullying non-privileged people on the shibboleth du jour. Stop the presses.

deBoer wants ideas on what to do about this. Well, you do What do you do about bullying in general: you fight it or you walk away from it.

I can't stand most people in leftist organizations, and I'm a communist. Leftist organizations populated mostly by privileged, self-righteous, self-important dipshits. (To my friends who are in leftists organizations, I'm talking about them, not you, and I admire your ability to cooperate with the dipshits that infest left-wing organizations.) Even deBoer himself regrettably strays occasionally into self-important dipshit territory. I didn't see that much actual bullying per se in my experience with leftist organizations (and it's also true that I'm very hard to bully), but I saw enough egregious bullshit that I decided to walk the individualist road.

I'm sincerely sorry, Mr. deBoer, that some students and others you know had their feelings hurt. That shouldn't happen to anyone. But it does happen, and it won't kill them. They'll find groups and communities that treat them with respect and consideration.

In the meantime, there's nothing to do but take personal responsibility. When you see bullying, stop it. If you can't, then walk away and find some other more worthwhile use of your time.