Capitalism and entrepreneurial capitalism

July 1st, 2014

Capitalism, in the sense of wealth creating wealth, wage labor, power derived from wealth, and trade, is a bronze age social technology. “Capital” literally means “head” in the sense of “head of cattle”. Originally, the amount of capital one had was the number of beasts in one’s herds. The biblical bronze age patriarchs were capitalists, in that their wealth was their herds, and their power derived from their wealth, their power was their employees. The actual figures on whom the biblical patriarchs are based are probably considerably less ancient than they are depicted in the bible as being but since Moses dates from the collapse of bronze age civilization and he, or the people who wrote him up, are very early iron age, his predecessors have to have been at least late bronze age, possibly earlier. The biblical patriarchs are depicted as fighting, and winning, battles with kings, which would suggest that they were figures of the very late bronze age, since chances are that nomads only gave kings a hard time during the decline and collapse of the bronze age civilizations. The size of states, and the size of armies, declined during the collapse of bronze age civilization, to the point where the sword of a single hero could make a big difference, only to rise again in the early iron age.

But, obviously there is something importantly different about today’s capitalism, something that changed around the time of the restoration.

The phrase “Industrial Capitalism” is misleading, for it was this new form of capitalism that created industry, not the other way around.

The big difference, the social technologies that caused the big difference, were double entry accounting, which made the joint stock corporation possible, made it possible to separate ownership of capital from enterepreneurship. Investors could put an entrepreneur in charge of their capital, and use double entry accounting to keep an eye on him. This is the foundation of western civilization, which began to soar when Charles the Second cut joint stock corporations loose from strong government oversight.

This means that owners of capital can employ people smarter than themselves to manage their capital, increasing the effective intelligence applied to production.

Which caused productivity to consistently and substantially rise faster than population, for the first time in history.

Double entry accounting is a critical part of this system. Unfortunately, double entry accounting has been profoundly disrupted in America by Sarbanes-Oxley, making it impossible to tell how a business is doing. This ham fisted government intervention was officially intended to prevent businesses from misleading investors and creditors, but instead it has made it mandatory to mislead investors and creditors. Sarbanes-Oxley consists of thousands of pages of law, each page of law giving birth to thousands of pages of regulation. It is of course impossible to comply with all this, for if one was to comply with any one page of Sarbanes-Oxley, it would put you out of compliance with hundreds other pages of Sarbanes-Oxley, so what the big firms do instead is hire accountants sufficiently well connected with the government, accountants on the revolving door between regulators and regulated, so that any figures the accountant conjures up will be deemed compliant with Sarbanes-Oxley.

The practical effect of this became apparent in the financial crisis, when it became obvious that many banks simply had not been keeping track of their finances, and had no idea what assets they owned, what financial obligations others had to them, and what financial obligations they had to others. Sarbanes-Oxley replaced the intentionally misleading figures of Enron with fog, with meaningless figures.

Which brings us back to the old system, where rich people cannot, and do not, entrust their wealth to smart people.

“More Right” proposes communism

June 28th, 2014

More right quoting “Men among the ruins”

The preliminary condition would naturally be the overcoming of the typical situation in democracies, where the political element makes promiscuous alliances with the plutocratic element, opening itself to corruption and pretending to represent a “Right” in opposition to Marxism. Again, the pure political power must be released from every bond—first from the bonds of capitalism, and then from those of the economy

This is, the state released from every bond, is the old communist fantasy. If the state is released from every bond, it can decree that everything be lovely.

The state does so. Strangely, everything fails to be lovely. Obviously evil people, wreckers, are disobeying the decree. They must found and destroyed. Then everything will be lovely.

But things still are not lovely. Obviously there must even more wreckers, who must be sought out even more vigorously and destroyed even more thoroughly.

At some point Stalin declares that Utopia has arrived, notwithstanding appearances to the contrary, thereby stopping the madness, or Vietnam invades Cambodia, thereby stopping the madness.

The state cannot be free from the bonds of capitalism, because it needs money and goods, and therefore needs capitalists to tax and to purchase technology from. As for being free from the bonds of the economy, we saw how that worked out for the communists.

Reality is that for the reasons explained by Mises and Hayek, and colorfully dramatized by Ayn Rand, the state cannot directly run the economy, nor directly sponsor science. Private individuals, with private wealth, have to be free to create wealth and knowledge, without which the state has nothing to tax, and no means to pay the army, nor any source for the technology to equip the army.

The state is at best a stationary bandit that keeps mobile bandits at bay. If it consumes everything, it destroys itself. Stalinist Russia kept itself afloat on an illegal but essential and tolerated black market, by letting capitalism that it had thrown out the front door in by the back door and by seizing and pillaging additional capitalist economies.

Stalin’s successors faced an ever more serious conflict between ideology – that everything should be devoured – and reality – that they needed the market and wealthy people, a conflict that gradually became more serious as no more advanced economies fell under their power.

Which eventually led to the open abandonment of the “seize everything” ideology

Dysgenic fertility

June 25th, 2014

Chateau Heartiste, always a great source for the Dark Enlightenment, reports:

Convicted criminal offenders had more children than individuals never convicted of a criminal offense. Criminal offenders also had more reproductive partners, were less often married, more likely to get remarried if ever married, and had more often contracted a sexually transmitted disease than non-offenders. Importantly, the increased reproductive success of criminals was explained by a fertility increase from having children with several different partners. We conclude that criminality appears to be adaptive in a contemporary industrialized country, and that this association can be explained by antisocial behavior being part of an adaptive alternative reproductive strategy.

Moral: For civilization to continue, female sexual and reproductive activity has to be placed, legally and socially, under the control of fathers and husbands. In actual practice, we tend to treat fertile age women as children, as their bad behavior does not have the legal and social consequences it would have for adult, but whereas a badly behaved child will be hauled off to the responsible adult, and the responsible adult asked to keep him in line, the badly behaved female is not hauled off to her father or her husband.

The illusion of government

June 23rd, 2014

Government is an illusion, a pretense in which everyone pretends to believe, for fear of what would be revealed should the pretense be seriously doubted. The US spent an immense amount of blood and treasure setting up a Iraqi government in its own image, and one morning that government softly and silently vanished away like the dream it always was. It seems to have been replaced by alarmingly numerous tribal, clan, and religious militias, of which ISIS is merely one of far too many.

Government is not a being like an elephant, nor a physical object like a tall building, but rather, a thought, an idea, ideas about how force shall be used. And ideas can change at the speed of thought. Ideas can change without anyone quite noticing for a time.

The patriarchal clan and tribe is the natural form of government, and any government on a larger scale has big problems for which we don’t really have any good solution, even though we have been working on this problem for thousands of years. We make synthetic clans, the church or the party. The result is apt to be a party state, one synthetic clan ruling many. It is oppressive. If the ruling clan loses cohesion, members of the ruling clan act more like mobile bandits, for example Jon Corzine, and it gets more oppressive. The rich are on the revolving door between regulators and regulated, for example Bush the second and Jon Corzine. Those capitalists that make their initial money legitimately, for example Elon Musk, then buy their way into the revolving door, becoming political activists, investing in politics with the intent that political authority will make them richer. Musk’s business plan is that car makers will be forced to buy his stuff in proportion to how many cars that they sell, which means that ultimately the ordinary car buyer will be forced to pay for Musk’s stuff regardless of whether he is using it or not, regardless of whether it is useful to anyone or not, which business plan pretty much guarantees that Musk’s stuff will not be useful to anyone. It is hard to make useful stuff. If your attention is focused elsewhere, and it really does not matter much whether the stuff you make is useful or not, it is not going to be useful.

The Iraqi government vanished when it came under attack by a few thousand competent well trained well armed men employing only personal weapons striking in areas far away from the centers of government power. Word of shots fired far away on the periphery caused government to disappear at the center without a shot fired anywhere near the centers of power. It is interesting to reflect on how much chaos Christopher Dorner caused when he launched his one man war on the Los Angeles Police Department, using hit and run tactics rather similar to those employed by ISIS in Iraq. If one competent man did that, what could half a dozen have done?

The revolving door spins scary fast. Jon Corzine, the man of many hats, regulator and regulated, the most regulated man in the world, took over MF Global, presumably on the basis that he would protect them from regulation if in charge, harm them with regulation if not in charge.

Twelve years ago, this sort of behavior would have been unthinkable. People would have screamed “conflict of interest”. There has been a quite sudden change in the political and economic culture, from typical first world to typical third world.

MF Global managed other people’s money, which Jon Corzine promptly stole. He expended the money of MF Global’s clients largely on buying political influence.

This is classic mobile bandit behavior. Instead of shearing the sheep, he skinned them. He would have made a lot more money steadily milking them over a lengthy period. His real asset was political and regulatory power. I conjecture it was slipping away, and he had to do something in a hurry.

It is difficult to see how to fix this problem. A Tsar is not a solution, due to the agent/principle problem. One needs a ruling elite with asabiyah, a harder and more subtle problem. Asabiyah is easily undermined by small amount of diversity, and I rather think that this is what happened twelve years ago – that the election of Obama is a symptom of the third worldization of our ruling elite, after the fashion of Detroit, and now Chicago. Can’t have a Tsar without an aristocracy, and Alexander the Liberator destroyed his aristocracy, replacing it with left wing bureaucrats who found that the more leftism, the more underlings the bureaucracy acquired.

Government needs to be one, which is hard, and the more government does, the harder it is to be one, and the less asabiyah it has, the harder it is to be one. Jon Corzine’s career tells us that our government is not one. Whereupon government suffers from the problems it purports to solve, prisoners dilemma, and tragedy of the commons, public funds and regulation being a commons.

Hormones and obesity

June 22nd, 2014

There is an epidemic of obesity, and no one knows what is causing it.

One item, however, is worthy of investigation. Females with early andrenarche, (early pubic hair) in addition to going boy crazy at a disturbingly early age, tend to become obese when they finally reach puberty and their figure finally catches up with their behavior and further enables their behavior.

And these days, pretty much all girls have what once would have been called early andrenarche. So, abnormal hormones first, abnormal fat later.

So, could be that whatever is causing the obesity epidemic, is the same thing as in causing declining masculinity in males and early sexual behavior in females.

Note that the absence of a father is risk factor for early andrenarche, suggesting that the problem might not be estrogen in the water supply, but metaphorical estrogen in the metaphorical water supply.

In the ancestral environment, early sexual behavior in fatherless females would have been a survival mechanism. In the absence of a father, and the absence of Uncle Sam the big pimp, need a sugar daddy. So, when the state makes fathers weak, that weakness tends to make their daughters into fat sluts.

If early andrenarche correlates with obesity, the interesting question, to which I don’t have the answer, is: Does late (by modern standards) andrenarche correlate to less obesity? Obviously it correlates to less promiscuity.

Andrenarche can be delayed by the drug spironolactone, (safe for girls, unsafe for boys) and parents alarmed by early sexual behavior sometimes treat their daughters to delay andrenarche – the humane and reversible alternative to clitoridectomy. Perhaps all girls should have andrenarche delayed to what used to be normal. Pubic hair is an indicator of sexual interest – you probably don’t want your daughters developing pubic hair earlier than their other secondary sexual characteristics.

Another test of the power of the purse

June 21st, 2014

During reign of Obama, attempts by the house of reps to exercise the power of the purse have been universally condemned as ultra extreme far right wing rightingery, and these attempts have invariably failed, rendering the house of reps similar in legal status to the Oklahoma University Student Debating society.

The NSA has been spying on Americans in massive and flagrant violation of the spirit of the fourth amendment, the letter of the fourth amendment, and recent legal interpretation of the fourth amendment by the Supremes. The overwhelming majority of Americans oppose this, so the house of reps has attempted to use the power of the purse to reign in the NSA in various ways, among them

barred the N.S.A. and the Central Intelligence Agency from using funds in the bill to “request or mandate” that an American corporation alter a product to permit surveillance of it.

Often the NSA has perfectly reasonable and compelling grounds to spy on a particular individual who is using a service of American corporation. The NSA then demands all information about everyone who has ever used this service, but, hey, promises that after all the information has been handed over, will only look at that particular individual for whom they have legitimate grounds and will piously close their eyes to all the other information that they have demanded. Scout’s Honor!

What makes this legislation less impressive is that this is the second time the reps have passed it. Perhaps they going to pass it a third time and add “But this time we really mean it!”

Bitcoin failure

June 15th, 2014

For bitcoin to work politically, authority over the currency needs to be distributed over a large group of peers. If power is concentrated at a single point, the state can dominate that point, whoever controls that point can steal other people’s currency and do a variety of bad things.

Bitcoin was designed so that “voting” depended on computing power and network connection. Initially, almost everyone who had a client was a miner, there were a huge number of miners, everyone who used bitcoin had roughly equal influence because they contributed roughly equal computing power to the block chain.

Today, bitcoin is controlled by by a single miner., which was a predictable consequence of bitcoin’s scaling problems.

What we need is a crypto currency which is controlled by the top one hundred or so owners of the currency that are well connected to the net and have adequate computing power, with influence over the currency proportional to the amount of currency that they own, rather than the number of cycles that they burn.

In principle it should be possible to do this using bilinear maps, but the details are a bit tricky, because we have to make sure that manageable number of votes reflects an infinitely divisible currency whose ownership changes continually. So the shares (private and public keys in groups with a bilinear map) have to be reissued frequently, while ownership of the infinitely divisible currency is given value by the fact that if you own a lot of it, you get shares proportional to the amount you own. Since shareholders are people who own a lot of currency, they have an incentive to not misbehave, to continue to reissue shares according to currency ownership and validate transactions according to the rules, since to do otherwise would destroy the value of the currency that they own.

The number of shares remains manageably small, however many people use the currency and however many transactions take place. The shares underlie the value of the currency – and absolutely nothing underlies the value of the shares. Of course we still have other scaling problems, to which I have not figured out a solution except in alarmingly vague outline.

Does game work?

June 15th, 2014

Read it and weep

If still in doubt, watch the video

For a lot of men, game is not all that effective. This is because the major part of game is to superficially appear to be high status, as women perceive status, which is very different from how men perceive status, and it is simply hard to appear to be high status. One’s subconscious shoots one down, resulting in incongruent behavior. Easier if other people act as if you are high status, as in the video.

Obviously it was stupid to emancipate women. Fertile age women should have the legal status of children. The state should back parental authority over children, and the husband’s authority over his wife.

Emancipation was a shit test that we failed.

Very minor outbreak of democracy

June 12th, 2014

Elections are about goodies. Even more obamaphones for all. No money down mortgages for minorities.

One might hope that republican primaries might be conducted on a slightly higher level.

In the recent primary, Eric Cantor campaigned that he was going to bribe the voters with their own stolen money, while David Brat campaigned on issues that have overwhelming support – campaigned against immigration, against crony capitalism, and against Obamacare. Just about everyone in America, except Washington and big business, opposes crony capitalism, most oppose immigration and Obamacare, and almost everyone who should be voting in a Republican primary opposes all three.

David Brat won 56% to 44%.

However, David Brat does not take the horribly extreme ultra right wing neonazi position that we might actually deport illegals, let alone stop with the Obamaphones.

Bottom line: 44% of the voters in the Republican primary voted like sluts and underclass.

The best of slavery, and the worst of abolitionism

June 8th, 2014

Let us compare the best of slavery with the worst of abolitionism.

In the West Indies, free blacks were apt to be re-enslaved: If found with no visible means of support, would be sent to the workhouse, on the assumption that otherwise they would be stealing or starving or very likely both.

The workhouse would then attempt to find owners for them, but often these were blacks with problems. The workhouse would find if they had a former owner, and twist his arm to take them back. If no one suitable wanted them, the workhouse would support them indefinitely on public and private charity.

So the workhouses in the West Indies, or at least some of them, were operating like a no kill pet shelter. Obviously the people operating these believed they were doing good, and had plausible reason to believe they were doing good. The benefactors could see their beneficiaries and look them in the eye. They might well wind up owning a couple of their beneficiaries, as someone operating a no kill pet shelter often winds up with more than his fair share of problem pets.

Let us compare with the holier than thou abolitionists who caused a civil war that killed a large part of the white male population, burned cities to the ground, and created artificial famine.

After the slaves were freed, a significant proportion died, being generally incompetent to look after themselves. The abolitionists, having denied that blacks needed a paternalistic welfare state, were disinclined to provide one, even as the death rate among their supposed beneficiaries rose to quite alarming levels.

After the civil war and abolition, black productivity as freemen was markedly lower than black productivity as slaves, leading to markedly lower material living standards. In part this must have been because of “slave driving” – that slaves were forced to work considerably harder than they would have otherwise been inclined to work, but in part it was because the employer could not trust a black employee to behave well, whereas he could make sure a slave behaved well.