Are you over 18 and want to see adult content?
More Annotations
A complete backup of tocal.nsw.edu.au
Are you over 18 and want to see adult content?
A complete backup of deutschebank.co.in
Are you over 18 and want to see adult content?
A complete backup of ellinismoskaiellines.blogspot.com
Are you over 18 and want to see adult content?
A complete backup of marysvillecaravanpark.com.au
Are you over 18 and want to see adult content?
A complete backup of happyinvestor.com
Are you over 18 and want to see adult content?
A complete backup of presta-module.com
Are you over 18 and want to see adult content?
Favourite Annotations
A complete backup of beautyinsider.ru
Are you over 18 and want to see adult content?
A complete backup of thelwordthaishop.com
Are you over 18 and want to see adult content?
A complete backup of parts4repair.com
Are you over 18 and want to see adult content?
A complete backup of dotnetfoundation.org
Are you over 18 and want to see adult content?
A complete backup of lifeoptimizer.org
Are you over 18 and want to see adult content?
A complete backup of pearldistributors.com
Are you over 18 and want to see adult content?
Text
INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! INTERFLUIDITY » NAME THE SOLUTION There is this notion, proclaimed on all sides of the political spectrum, that if you want to solve a problem, the first step is to name it, center it, because only then can you properly address it. INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread.INTERFLUIDITY ::
It's a cliché, of course, that the 2000s are the new Gilded Age, that inequality in America is at levels not seen since the original Gilded Age, which you may recall was ended by a terrible depression.. During this decade's tiresome debates about inequality, the don't-worry-be-happy side of the argument frequently, and correctly, noted that income inequality statistics overstate the livedINTERFLUIDITY
Straight outta Antarctica, Felix Salmon calls me forth from a shallow grave, with his rhythmic chanting, "I Heart CPDO / I Heart CPDO".And he mocks, mocks, the Sacred Order of the Credit Cassandra.(Our motto: "We may go bankrupt first, but eventually you will too, and then we'll tell you that we told you so.") All I can say to Felix Salmon is.INTERFLUIDITY
interfluidity
INTERFLUIDITY :: RETHINKING SUBSIDIZED FINANCE Interfluidity :: Rethinking subsidized finance. Rethinking subsidized finance. Regular readers know that I view proposals to fund bank asset purchases with high leverage, non-recourse government loans to be an objectionable form of hidden subsidy from taxpayers to privateINTERFLUIDITY ::
Note: Reading through, this post is unintentionally reminiscent of a much better column by Brad DeLong.. Yesterday I was flabbergasted by a small thing. I came upon this article on Morningstar.The piece, targeted towards potential investors, was called Munis Today: Lots of Yield, without All the Risk.It was chirpishly positive about munis and municipal bonds funds.INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITY :: WHO PASSED THE GEITHNER PLAN? Most people are still thinking about the Constitution as if it is the rule of law. It stopped mattering much as soon as people who wrote itpassed away.
INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! INTERFLUIDITY » NAME THE SOLUTION There is this notion, proclaimed on all sides of the political spectrum, that if you want to solve a problem, the first step is to name it, center it, because only then can you properly address it. INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread.INTERFLUIDITY ::
It's a cliché, of course, that the 2000s are the new Gilded Age, that inequality in America is at levels not seen since the original Gilded Age, which you may recall was ended by a terrible depression.. During this decade's tiresome debates about inequality, the don't-worry-be-happy side of the argument frequently, and correctly, noted that income inequality statistics overstate the livedINTERFLUIDITY
Straight outta Antarctica, Felix Salmon calls me forth from a shallow grave, with his rhythmic chanting, "I Heart CPDO / I Heart CPDO".And he mocks, mocks, the Sacred Order of the Credit Cassandra.(Our motto: "We may go bankrupt first, but eventually you will too, and then we'll tell you that we told you so.") All I can say to Felix Salmon is.INTERFLUIDITY
interfluidity
INTERFLUIDITY :: RETHINKING SUBSIDIZED FINANCE Interfluidity :: Rethinking subsidized finance. Rethinking subsidized finance. Regular readers know that I view proposals to fund bank asset purchases with high leverage, non-recourse government loans to be an objectionable form of hidden subsidy from taxpayers to privateINTERFLUIDITY ::
Note: Reading through, this post is unintentionally reminiscent of a much better column by Brad DeLong.. Yesterday I was flabbergasted by a small thing. I came upon this article on Morningstar.The piece, targeted towards potential investors, was called Munis Today: Lots of Yield, without All the Risk.It was chirpishly positive about munis and municipal bonds funds.INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITY :: WHO PASSED THE GEITHNER PLAN? Most people are still thinking about the Constitution as if it is the rule of law. It stopped mattering much as soon as people who wrote itpassed away.
INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or toINTERFLUIDITY
interfluidity
QUOTES FROM "THE CASE FOR FLEXIBLE EXCHANGE RATES" BY The following quotes are from "The Case for Flexible Exchange Rates" by Milton Friedman, published in Friedman's Essays in Positive Economics, University of Chicago Press, 1953. From page 165: If internal prices were as flexible as exchange rates, it would make little economic difference whether adjustments were brought about by changes in exchange rates or equivalent changes in internal prices. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY
Will Wilkinson writes: But “my way or the highway” cannot be the basis of any form of genuinely liberal politics. All durable liberal societies have evolved complex democratic institutions because it’s impossible to manage foundational disagreement in a liberal way INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or toINTERFLUIDITY
interfluidity
QUOTES FROM "THE CASE FOR FLEXIBLE EXCHANGE RATES" BY The following quotes are from "The Case for Flexible Exchange Rates" by Milton Friedman, published in Friedman's Essays in Positive Economics, University of Chicago Press, 1953. From page 165: If internal prices were as flexible as exchange rates, it would make little economic difference whether adjustments were brought about by changes in exchange rates or equivalent changes in internal prices. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY
Will Wilkinson writes: But “my way or the highway” cannot be the basis of any form of genuinely liberal politics. All durable liberal societies have evolved complex democratic institutions because it’s impossible to manage foundational disagreement in a liberal wayINTERFLUIDITY
Today I see people whose politics I largely share getting upset about things. Here are Briahna Joy Gray and David Sirota, upset that John Kasich may play a role in the Democratic National Convention.Here is Anand Giridharadas grappling with how to welcome the energy and support of the “Lincoln Project” without ceding power to the very same people who brought us the Iraq War, torture, INTERFLUIDITY » NAME THE SOLUTION There is this notion, proclaimed on all sides of the political spectrum, that if you want to solve a problem, the first step is to name it, center it, because only then can you properly address it. A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
INTERFLUIDITY
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, orINTERFLUIDITY
Dani Rodrik's wonderful post on free trade and prices has started an extraordinarily candid conversation among economists. Economists sometimes rudely pretend that critics of free trade simply fail to understand "Ricardo's Difficult Idea", and that skepticism amounts either to ignorance, a kind of literary snobbishness, or simple corruption.In doing so, despite protestations to the contraryINTERFLUIDITY
Update History: 31-Mar-2007, 2:32 p.m. EDT: Small gramatical and punctuation clean-ups. Added the phrase "and just holding them" to clarify the equivalence between oil-exporters buying dollars under euro-priced oil and holding dollars under dollar-piced oil.INTERFLUIDITY
interfluidity
INTERFLUIDITY
Straight outta Antarctica, Felix Salmon calls me forth from a shallow grave, with his rhythmic chanting, "I Heart CPDO / I Heart CPDO".And he mocks, mocks, the Sacred Order of the Credit Cassandra.(Our motto: "We may go bankrupt first, but eventually you will too, and then we'll tell you that we told you so.") All I can say to Felix Salmon is. INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
STEVE RANDY WALDMAN HTTP://INTERFLUIDITY.COM/ @INTERFLUIDITY Sculpting an asset • Our coarsest chisels will be redemption and issuance, which put a floor beneath and a ceiling above price respectively. • An artist’s goal is not to give form to stone, butto affect the
INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY ::
Interfluidity still has unfinished business with Felix Salmon, but that will have to wait.Usually we take great pleasure in disagreeing with Felix, but today he makes one point that is unassailable: Bear Stearns Needs English Lessons.The firm sent out a letter to its unlucky investors that managed to communicate almost nothing. Shorter Bear Stearns (my paraphrase): "You have lost all, or INTERFLUIDITY » NAME THE SOLUTION There is this notion, proclaimed on all sides of the political spectrum, that if you want to solve a problem, the first step is to name it, center it, because only then can you properly address it. WEAKNESS IS PROVOCATIVE Plurality voting and Duverger’s “Law” In the United States, for most elective offices, we use a simple voting system in which people who wish to hold an office run, and INTERFLUIDITY :: LIQUIDITY SURFACES AND HEDGE FUNDS Liquidity Surfaces and Hedge Funds. Hedge funds and day traders are often claimed to provide liquidity to the markets they participate in. It's clear that these actors do increase market turnover and reduce observable bid-ask spreads. But I contend that their participation may paradoxically increase the spreads paid by longer-term investorsINTERFLUIDITY
Straight outta Antarctica, Felix Salmon calls me forth from a shallow grave, with his rhythmic chanting, "I Heart CPDO / I Heart CPDO".And he mocks, mocks, the Sacred Order of the Credit Cassandra.(Our motto: "We may go bankrupt first, but eventually you will too, and then we'll tell you that we told you so.") All I can say to Felix Salmon is. INTERFLUIDITY :: BLAME AVOIDANCE: UNDERSTANDING THE "the ossification of economic ideas into stale ideologies over a longer period of time, for getting the US economy into an obvious, big mess, while the best and brightest debated whether a garbage dump wasn't the optimal outcome if something resembling a market happenedto produce it."
INTERFLUIDITY :: DISTINGUISH BETWEEN TRANSACTIONAL AND That's a mistake. Transactional credit is essential, and might even be publicly provided. Revolving credit is a double-edged sword. Transactional credit is a means of decoupling the process of making payments from the form in which ones liquid wealth is held. INTERFLUIDITY :: VANILLA AFTERTHOUGHTS An important point about state required vanilla products, and about state requirements in general, like having the public option in health insurance decided state by state, is INTERFLUIDITY :: ELIMINATE THE BUSINESS INTEREST TAX DEDUCTION I was reading Greg Mankiw dissing a tax increase proposal by Hillary Clinton, and I thought to myself, "If I could invent a tax increase for Greg Mankiw to dis, what would it be?" Suddenly, the screen began to waver, dreamy harp music chimed, and a vision appeared to me on a tablet of balance sheets: Eliminate the tax deductibility of interest payments by businesses. INTERFLUIDITY :: IS THE PRIME RATE A SCAM? While researching something quite subtle (more on that tomorrow), I noticed something not at all subtle. Below is a graph showing the spread between the US Federal Funds Rate and the so-called "PrimeRate".
INTERFLUIDITY :: CONFESSIONS OF AN UNDERWATER SHORT Purely on an investment perspective, to short on US equities in general is to bet on deflation (or to bet against the Fed). You may be right on the sentiment, yet inflation could still wipe you out. INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. INTERFLUIDITY :: UNEMPLOYMENT AND THE CREDIT CYCLE Steve, I found an interesting article on the debate about Saudia Arabia current account surplus Shura member calls for oil production curbs in Saudi: Saudi Arabia's Shura council (parliament) will hold a series of meetings over the next two weeks to discuss a controversial proposal by a key member to curb oil production to save reserves for better prices, Saudi media reported. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: HOW TO TAKE BACK THE MONEY Justin Fox has been asking how we might make the miscreants pay (and here).I have two ideas to throw out. My first thought is an old doctrine. If we could get the people who supposedly represent the people to formally acknowledge the insolvency of the institutions we are bailing out, there is a wide-ranging doctrine known as "fraudulent conveyance" that might help. INTERFLUIDITY :: CONFESSIONS OF AN UNDERWATER SHORT Purely on an investment perspective, to short on US equities in general is to bet on deflation (or to bet against the Fed). You may be right on the sentiment, yet inflation could still wipe you out. INTERFLUIDITYPREDATORY PRECARITYPRESENTATIONSTWO BIG QUESTIONSUNCATEGORIZED A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments. With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be INTERFLUIDITY » PRESENTATIONS 2017. Rebuilding finance from the bottom up: using cryptographic tokens as a means of small business finance. Engineering authority: the economics of blockchain application design. Fiat money is very effective (although it may not be ethically managed)INTERFLUIDITY ::
Notes "reason" asked about a "theoretical basis"It's important to note that my story betrays an anti-theoretical bias. In the perfect world of financial theory, the supply of financial assets should be infinitely price elastic at one true "fair price", since arbitrageurs can increase supply indefinitely by selling an asset short if it is "overvalued" relative to the value of its future cash INTERFLUIDITY » E-MAIL SUBSCRIPTIONS If you’d like to be notified by e-mail of new posts, please subscribe below. Thanks! A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
INTERFLUIDITY :: CROCODILE TEARS AND THE LIBOR-OIS SPREAD OK. So, stock markets are, like, tanking. But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread. INTERFLUIDITY :: UNEMPLOYMENT AND THE CREDIT CYCLE Steve, I found an interesting article on the debate about Saudia Arabia current account surplus Shura member calls for oil production curbs in Saudi: Saudi Arabia's Shura council (parliament) will hold a series of meetings over the next two weeks to discuss a controversial proposal by a key member to curb oil production to save reserves for better prices, Saudi media reported. ALDMAN PERSPECTIVES ON A UNIVERSAL BASIC INCOME What is a Universal Basic Income (UBI)? • The simplest thing - everybody gets a regular check, in identical amounts, just forbreathing.
INTERFLUIDITY :: HOW TO TAKE BACK THE MONEY Justin Fox has been asking how we might make the miscreants pay (and here).I have two ideas to throw out. My first thought is an old doctrine. If we could get the people who supposedly represent the people to formally acknowledge the insolvency of the institutions we are bailing out, there is a wide-ranging doctrine known as "fraudulent conveyance" that might help. INTERFLUIDITY :: CONFESSIONS OF AN UNDERWATER SHORT Purely on an investment perspective, to short on US equities in general is to bet on deflation (or to bet against the Fed). You may be right on the sentiment, yet inflation could still wipe you out. INTERFLUIDITY :: UNEMPLOYMENT AND THE CREDIT CYCLE Steve, I found an interesting article on the debate about Saudia Arabia current account surplus Shura member calls for oil production curbs in Saudi: Saudi Arabia's Shura council (parliament) will hold a series of meetings over the next two weeks to discuss a controversial proposal by a key member to curb oil production to save reserves for better prices, Saudi media reported. A PERSPECTIVE ON SOCIAL AFFAIRS introduction • Agency represents an interesting lens through which to consider a wide range of disparate social phenomena and ideas • One way (by no means the only or uniquely best way!) of making sense of the pickle we are in, socially and politically, is as a crisis of agency • A unifying theme of a wide variety of potential socialinnovations or
EDIT: AN INTRODUCTION TO FIAT MONEY tl; dr • Fiat money is a social and institutional technology • Fiat money is not “mere paper”. It is not “unbacked”. On the contrary, it is backed by the most valuable of all possible things: human beings’ capacity to labor, to create, or to INTERFLUIDITY :: TRUTH & RECONCILIATION This "plan", and I use the term loosely, is a complete abdication of responsibility on the part of our legislators. It addresses none of the core issues - transparency (as you note), excessive leverage, the elimination of the firewall between banking and the securities market due to the repeal of Glass-Steagall, the unprecedented under-pricing of risk over the last few years, the emergence ofINTERFLUIDITY
interfluidity
INTERFLUIDITY :: HOW TO TAKE BACK THE MONEY Justin Fox has been asking how we might make the miscreants pay (and here).I have two ideas to throw out. My first thought is an old doctrine. If we could get the people who supposedly represent the people to formally acknowledge the insolvency of the institutions we are bailing out, there is a wide-ranging doctrine known as "fraudulent conveyance" that might help. INTERFLUIDITY :: REORGANIZATION VS. LIQUIDATION Reorganization vs. liquidation. Kevin Drum and James Surowiecki both take Richard Shelby to task for advocating "closing down" banks."I don't want to nationalize them; I think we need to close them," said the Alabama senator. He wants to "bury some big ones." For the record,I agree.
INTERFLUIDITY :: ELIMINATE THE BUSINESS INTEREST TAX DEDUCTION I was reading Greg Mankiw dissing a tax increase proposal by Hillary Clinton, and I thought to myself, "If I could invent a tax increase for Greg Mankiw to dis, what would it be?" Suddenly, the screen began to waver, dreamy harp music chimed, and a vision appeared to me on a tablet of balance sheets: Eliminate the tax deductibility of interest payments by businesses. INTERFLUIDITY :: CONFESSIONS OF AN UNDERWATER SHORT Purely on an investment perspective, to short on US equities in general is to bet on deflation (or to bet against the Fed). You may be right on the sentiment, yet inflation could still wipe you out. INTERFLUIDITY :: WHO PASSED THE GEITHNER PLAN? Most people are still thinking about the Constitution as if it is the rule of law. It stopped mattering much as soon as people who wrote itpassed away.
INTERFLUIDITY
Steve Randy Waldman
JUBILEE
Should a Biden administration unilaterally forgive student debt? On the one hand, higher education has grown into an ugly mechanism for transmuting the hopes, dreams, and fears of young people into revenue for a sanctimonious, often destructive, industry , via a debt overhang that ruins lives. With legislative gridlock likely in 2021, forgiving Federally held student debt is one of the few ways that a Biden administration could make a direct, material, positive difference in people’s lives. The President could do it with the stroke of a pen.
On the other hand, the potential side effects seem terrible. The Democratic Party is trending towards becoming a party of the educated professional class alone. I view that as a horrible development we should move heaven and earth to reverse. So long as we are (miserably)
a two-party system, the complement of a professional-class party is afascist party
. The
Republicans we detest are the obverse of what we are allowing ourselves to become. Letting the working class remain in hock — underwater on unforgiven credit card debt, kiting paycheck loans to feed the kid and make the rent — while we unilaterally forgive higher education debt strikes me as an almost cartoonishly perfect wedge issue to polarize the college and noncollege elements of the Democratic electorate. Republicans would ruthlessly demagogue and exploit student loan cancellation to build their new “multiethnic, multiracial, working-class coalition.”
On technocratic rather than political grounds, there are big problems with just forgiving student debt. Come next fall, an unreformed higher education finance system will remain. Kids will sign on the dotted line for new Federal loans, just after the last round has been wiped away as a remedy to the same predatory regime they are joining. Will the obligation embedded in those new loans be legitimate, then? Regardless of where you stand on that ethically, will there be an incentive to max out loans — rather than spend out of family means, or take work to minimize indebtedness — on the theory that new debt might be forgiven in a next round students (and their families) might reasonably predict? Will that end up harming kids even more, if a second round of forgiveness fails to emerge? If a new round of forgiveness does appear, will it end up being perceived as a grift by well-to-do families, many of whom may have suddenly opted to finance college with debt rather than out of savings? For all of this, I can’t persuade myself to simply oppose unilateral forgiveness of student debt. The last thing Democrats need is, yet again, to find technocratic grounds to persuade themselves not to directly, materially help humans desperate for relief. My suggestion (which owes everything to a conversationwith the
remarkable Carlos Mucha ) is that Democrats push for what Steve Keen describes as a “modern jubilee“:
a flat per-capita transfer to citizens and permanent residents that must be used to pay down debts. Any balance that remains after debts are repaid becomes money recipients can bank. (Mucha suggeststhis
difference be remitted as savings bonds, which could be structured to mature over time in order to prevent a destabilizing spike and then withdrawal of new spending power.) Ordinarily, this kind of jubilee would be unlikely to get through a Republican, or even closely divided, Senate. But, as we’ve seen, a Biden administration could implement part of it — an effective “pay down” of Federally-held student debt — with the stroke of a pen. My suggestion is that Democrats do that _at the same time as they pass, in the House, a bill universalizing the transfers to the rest of us_. They should pick a number (Mucha suggests $10K; I might go for $20K), and forgive each student their loans up to that amount. The House bill would specify that the student loan forgiveness constitutes a first tranche of payments under the proposed jubilee. The write-offs would be irreversible; student debt relief would be a _fait accompli_. The burden would then be on the Senate to pass the bill and resolve the equity issues, by authorizing payments to everyone else (as well as payment of any excess balances owed to student debtors). If noncollege humans get angry, understandably, that college types got bailed out and they didn’t, Mitch McConnell’s would be the number to call. The Democratic coalition would be ostentatiously fighting like hell so they get theirs too. Instead of letting student debt relief become a wedge by which Republicans can even further peel the working class from the Democratic coalition, this would flip the table. Relief to some would be a done deal. Republicans’ choice then would be to complete the work, or to leave desperately felt, easily remediable, inequities unremedied, against a Democratic Party fighting for the working class. This proposal would not reform the predatory grift that higher education finance has become, alas. But it wouldn’t place existing system in a strange netherworld, either. Student debt would not specifically delegitimized; it would become just one of many forms of debt per-capita transfers might pay down. The proposal would not create counterproductive incentives to expand indebtedness, student or other, in hopes of profiting from future forgiveness. As a tactic, the proposal represents a useful compromise between barreling headlong towards an “imperial Presidency” or accepting the gridlock of a dysfunctional legislature. The President would not, by the stroke of a pen, try to give himself just what he wants, and then hope for legislative and judicial acquiescence. Instead he would overcome the _status quo_ bias of Congress by upending the _status quo_ in a way that demands legislative action. The comfortable in Congress would be forced to act, if they are to retain their comforts. They can’t win by just pocketing inertia.What do you think?
UPDATE HISTORY:
* 18-Nov-2020, 3:45 p.m. EST: “…yet again, to find technocratic grounds to persuade themselves not to directly, materially help humans in need of desperate for relief.”; “the same predatory regime they will be are joining.” Steve Randy Waldman — Tuesday, November 17th, 2020 at 11:07 am PSTpermalink
SOCIAL DEMOCRACY OR FEUDALISM Yesterday, I attended a Zoominar featuring Matthew C. Kleinand Brad DeLong
, which was unsurprisingly excellent. The conversation was inspired by Klein’s book with Michael Pettis, _Trade Wars are Class Wars_,
which I’ve not read yet, but hope to very soon. The conversation skewed sweeping and historical, discussing dual themes, first balance-of-payments wonkery and the challenges associated with managing international financial flows, then elite and government incentives, are better choices possible and why haven’t they been taken? Delong and Klein are more sane and sensible than I tend to be. Both pointed out, in different ways, that managing the swelling waves and yawning canyons that emerge when funds can be lent and spent across borders, and withdrawn at the drop of a hat, presents challenges even for the best placed and most well intentioned governments. Coordination problems rather than conspiracy might explain some of the ugly outcomes (fragility and inequality) these flows have been let to engender. But judging from Klein and Pettis’ title, I think they have more than a little sympathy for my less sane and sensible view that, while not choreographed as conspiracy, our failure to manage these flows and their costs has something to do with the interests of those to whom the costs are paid (incompletely, for sure, but the deadweight losses fall elsewhere). Very Delong-ianly, the conversation ranged over a sweep of centuries rather than decades, with discussions of the historical transition from overt imperialism and strategies where colonial powers coercively outsourced demand and indebtedness to conquered peripheries, into parallel dynamics that have emerged between (notionally) independent nations today with less explicit recourse to the point of a gun. (This is a tale told in bleedingly broad watercolor brushstrokes, but it places the contemporary United States in an interesting, paradoxical position.) Things change, things stay the same, in international (trade) affairs then also perhaps in social (class) affairs. Trade wars are class wars. This got me to thinking that if we should recognize an echo of empire in contemporary trade imbalances, should we not also recognize an echo of feudalism in contemporary class dynamics? The class wars embedded in trade wars of the past generation have provoked growing chasms of inequality (within societies inscribed by nation-state borders), along with (oh Gatsby curve) declining
mobility and dynamism between classes. Nothing has grown so stale, I think, as the argument between “capitalism” and “socialism”. It is, in the scheme of things, a quarrel between cousins, a squabble among friends. Adherents of capitalism and socialism both share a deeper enemy, traditional caste-ordered society in which ones station is fixed and determined by birth, and social relations are ordered by customary — but coercively enforced — obligations between classes. Marx, at least in my vulgar Cliff-Notes understanding of his oeuvre, predicts aprogression like
_Feudalism ⇒ (revolution of the bourgeoisie) ⇒ Capitalism ⇒ (contradictions of capitalism) ⇒ Socialism_. But perhaps it’s more parsimonious to imagine that, in the face of contradictions, society might revert to its most historically stable prior form, rather than inventing a new one. Maybe rather than a progression, we risk a cycle _Feudalism ⇒ (new technological possibility yields a revolutionary bourgeoisie) ⇒ Capitalism ⇒ (contradictions of capitalism yield conflict and backlash) ⇒ Feudalism (at a new technological level, but with uses controlled and further development suppressed)_. During the early capitalist period, feudalism is mocked as primitive, a “dark age”. During the late capitalist period, it becomes appealing, a source of order, stability, community. The contradictions of capitalism yield social pathology, and a caste-based communitarianism offers remedy without revolution , appealing to the winners of the capitalist period. Feudalism can derive from experiments in socialism. That was the experience of Soviet communism. Feudalism can also arise from liberal capitalism. That is the precipice on which we stand right now. It is modernity itself that is at stake, this conceit of a continually dynamic society upon which the contours of power are not rigidly and durably inscribed. Delong asked, when I made an inchoate attempt to express these reflections after the Zoominar, whether I wasn’t echoing Rosa Luxemburg’s “socialism or barbarism”. I wish I was, because that’s a pretty easy choice. One might be optimistic that the humans, like Winston Churchill’s probably apocryphal Americans, will do the right thing after exhausting all the alternatives. The choice between modernity and feudalism is actually a difficult choice, one to which there is not a universally agreed better answer. Lots of conservatisms are tacit calls for feudalism as the practical grounding of an ordered community. If you call it “feudalism” it has few defenders, but by other names it is an ascendant creed. Over the past few years, in the United States, it has become fashionable among modernists — liberal capitalists and left-ish socialists both — to use the term “fascism”. At least in part, this can be understood as a desperate attempt to blunt the appeal of feudalism by tarnishing it with its most garishly malignant strain. But the appeal of feudalism, along with the social forces that are drawing us towards it, is not a messaging problem. For a while, in the West, we thought we had proved Marx wrong . We had experienced contradictions of capitalism, but rather than succumbing to revolution, we coordinated via democratic states to work towards reasonably just, reasonably stable, still dynamic, hybrids of capitalist forces and socialist solidarity. Within the modernist camp, there are lots of capitalists and lots of socialists who consider a social-democratic hybrid not viable, inherently unstable. After all, if social democracy was sustainable, why did it prove vulnerable to the neoliberal turn that destroyed it? Why have we “retrenched” so far from the great societies we were building? However, one historically contingent datapoint constitutes pretty thin grounds to discredit a whole class of social experiments — by far the most successful of modernity’s social experiments, while it lasted. Despite tremendous correlative forces that move “the West” together, despite decades of pressure towards a Washington consensus, social democracy survives and thrives in Scandinavia in a form stronger than anything that ever took hold in the United States. Social democracy is certainly no more discredited than capitalism (which has now failed spectacularly at least twice), or socialism (to which some responsibility for the catastrophes of Soviet communism and Maoism must be ascribed). Perhaps there are better capitalisms or better socialisms that we have not tried. And perhaps there are better hybrids, better social democracies. Rather than thinking of social democracy as a point between, a detente or armistice of two implacably opposed systems, maybe it’s best to think of it as a union, a full surface at whose opposing edges sit “pure” capitalisms or socialisms in their many varieties, between which lies a field of points that draw in different ways and degrees from both. That surface is a map of modernity, and its undiscovered best sits more likely in the interior than at an edge. The choice before us, then, is not capitalism or socialism, not socialism or barbarism, but social democracy or feudalism. (Or perhaps there are syntheses there, too. Perhaps China is an emerging example of a country neither modern nor feudal, but a hybrid, with social democracy and feudalism together proving adaptive if not quite appealing. As a positive matter, it remains to be seen how durably the contradictions of such a hybrid can be assuaged. As a normative matter, I am ideological. I’d rather explore the full space of social democracy before making any kind of peace with a journey, however partial, towards legitimating permanent hierarchy and caste warily enforced by deployment of coercive violence againstinternal threats.)
UPDATE HISTORY:
* 15-Nov-2020, 12:35 p.m. EDT: “…maybe it’s best to think of it as a union, a full surface at whose opposing edges sit “pure” communisms capitalisms or socialisms…” Thank you commenter Ivan! Steve Randy Waldman — Saturday, November 14th, 2020 at 2:59 pm PSTpermalink
MERGE THE COURT
If the Democrats win the Presidency and the Senate, and if they are not inclined to betray the country to plutocratic interests (who would be glad to compensate them for the electoral cost of doing so), they will reform the Federal judiciary in some manner next year. The most widely discussed reform is to “pack the court” by increasing the number of Supreme Court Justices, creating vacancies a President Biden could fill, to counter or correct Republicans’ “constitutional hardball” with respect to replacements for Antonin Scalia and Ruth Bader Ginsburg. Packing the court is a “tit” that conjures an obvious “tat” — Republicans almost assuredly would expand the size of the court next time they held the Presidency and the Senate, in an escalatory game without obvious end. Unfortunately, I think simple court-expansion is the most likely reform, because it retains and enhances the role of the Supreme Court as an existential polarizing issue during election campaigns, which is great for fundraising and preserving incumbency . These escalations are terrible for the country, but good for a politics industrythat includes both
parties.
However, if a Biden administration wants to do the right thing for the country, rather than for their industry, here is my proposal. I. MERGE THE FEDERAL APPEALS COURT INTO SUPREME COURT The Federal judiciary is currently a three-level hierarchy, with district courts, appeals (or “circuit”) courts, and the Supreme Court. It should be collapsed into a two-level hierarchy. All of the members of the current appeals court would become Supreme Court justices. That would leave the Supreme Court with a Republican skew, but much more balanced than the current Court’s expected 2 to 1 skew. Presuming Amy Coney Barrett is confirmed (and no further turnover), there would be 104 Republican appointees and 84 Democratic appointees. Cases would still be heard by nine-member panels, but each panel would be randomly selected from the full body of the Court. “Certiorari” petitions would be voted up or down by a majority vote of the fullbody.
Ordinary appeals would be heard as they are now, within still extant circuits of the now merged Court. These could then be appealed to the plenary Supreme Court. II. REQUIRE A SUPERMAJORITY TO STRIKE DOWN LAWS AS UNCONSTITUTIONALMarbury v. Madison
is a live issue again in American politics. Matt Bruenigand Ryan Cooper
argue we should simply cease to respect the prerogative claimed by the judicial branch to strike down laws judges deem inconsistent with theConstitution.
I oppose that approach. I do think we want to preserve the supremacy, in practical terms, of a rights-protecting core of law that can only be overridden by a difficult amendment process. However, there should be a lot more deference to a presumption that the legislative branch would have considered and respected the constitutionality of laws when they act. The judicial branch should only be able to strike down laws as unconstitutional when a strong consensus prevails within this now very broad Supreme Court. I propose the following procedure: Whenever a panel of nine of the reformed Supreme Court hears a case, it’s first duty is to determine whether there is a constitutional question implicated that might render some or all of the law it is asked to apply unconsititional. If at least three of the panel believe there is such an issue, the justices on both sides (if they are not unanimous) would write opinions unrelated to the specific facts of the case before them, solely on the controversy over constitutionality. The full body of the Court would then vote on the question, and the legislature would only be overridden if three fourths of the justices concur that the law was unconstitutional. Once the constitutionality question has been settled, the case would return to the nine-member panel for adjudication consistent with that determination. This supermajority deference would not apply to executive orders and actions. When the executive and the judiciary conflict, the legislature must decide the issue. Reforming our dysfunctional legislature is a whole ‘nother ball of wax, but we should start now to counter our drift towards an atrophied Congress and imperialPresidency.
III. ELIMINATE FIXED SIZES AND ANY NOTION OF “VACANCY” There should be no fixed size for the new Supreme Court. Justices should continue to serve within “circuits”, and new appointments should be allocated to circuits according to which circuit is most understaffed relative to the population served. If, at a given time, the Third Circuit serves an area with 7% of the population, but only 4% of Supreme Court justices are assigned to that circuit, and no other circuit is even more underrepresented, then the next appointment would go to that circuit. The only position that could ever become “vacant” would be the Chief Justice of the Supreme Court, who would be nominated and confirmed according to the current process, usually from within the existing court (though it might not be constitutional to require that). The Chief Justice would perform her constitutionally prescribed roles, and would remain the administrative and ceremonial head of the Court, but in the business of deciding cases she would just be _primus inter pares_, perhaps an unusually respected voice but one accorded no special formal privileges. IV. LIMIT THE NUMBER OF APPOINTMENTS PER PRESIDENTIAL TERM TO ENFORCE NEAR PARITY OF INFLUENCE Congress should fix a limit to the number of Supreme Court appointments that can be made in any four-year Presidential term. This would be a number close to ten, if we wish to preserve approximately the current size of the newly merged judiciary. Each President would be free to make appointments until that limit had been exhausted. The Senate might block an administration’s appointments, of course, preventing the full complement of nominees from being seated. In that case, the _next_ administration would be limited to appointing the number of justices seated by the prior administration, plus one. In other words, _the number of appointments a President may make per four year term would be the minimum of the fixed limit of ten and the number seated by the prior administration plus one._ This would limit any hope of partisan profit in Senate obstructionism. Blocking low-quality appointments would remain fine and wise, but stalling one President’s appointments would give little advantage to the next President’s party. ------------------------- None of these ideas are, I think, original. I was delighted, for example, to see that Jamelle Bouie favors a randomized Supreme Court.
According to Ryan Doerfler and Samuel Moyn,
the idea of a supermajority requirement for declaring a law unconstitutional dates back to the 1920s. I don’t know antecedents to the fixed-appointment-schedule, variably-sized court idea, but I amsure they exist.
The reform proposed here would not be “packing the Court” in any partisan sense. It would in fact preserve a narrow Republican appointment majority all the way through a Biden term. Supermajority judicial review would be a strike for judicial modesty that publics of both parties, rendered fearful by negative partisanship, should support. Random draws mean that some cases _would_ be decided by heavily skewed panels, but the scope of each panel’s discretion would be modest (due to the plenary supermajority required for judicial review), and the temptation to very partisan decision-making would be tempered by the fact that other cases will be decided by panels tilted the other way. Judges of neither party could imagine that an exercise of plain partisan overreach could escape reversal or retaliatory escalation by the other side. With “running the ball down the field” for ones own party a prescription for certain stalemate, hopefully justices’ shared interest in coherent and consistent application of the law would prevail and guide the operation of the merged, reformed Court.UPDATE HISTORY:
* 21-Oct-2020, 3:30 p.m. EDT: Add clarification to “I. Merge the Federal Appeals Court into Supreme Court” that ordinary appeals still proceed within circuits. * 21-Oct-2020, 3:35 p.m. EDT: “…respected the constitutionalityof law laws…”
Steve Randy Waldman — Wednesday, October 21st, 2020 at 12:18 pm PDTpermalink
PARAPARTY COOPERATIVES _In August, _interfluidity_ (hi!) hosted a seminar over Zoom, which I enjoyed very much. The main problem was that I talked too %$@&*-ing much. So, this time, I propose a bit of a different experiment._ _I propose we try a “random seminar”. I’ve written a little app to draw names from a metaphorical hat, and then show a timer. Rather any kind of presentation, or the jungle hierarchy of who chimes in, or discretionary moderation, I thought it’d be fun to choose a topic, and let who-speaks-when be random. You can decline, if you don’t know what to say or prefer just to listen. (We’d love to hear from you though!) In parallel, there will be the more ordinary, discretionary conversation that Zoom encourages in the comments._ _I’ll rig the game by framing a topic, see the overlong diatribe below. But the written piece is it. I won’t present in any fashion. I’ll just run the clock and be a participant._ _If you’re interested, we’ll try on _FRIDAY, OCTOBER 16, 2020 AT 4 PM EASTERN / 1 PM PACIFIC / 8 PM UTC. _If you participated last time around, or indicated an interest to participate in the comments there, I’ll spam you with an e-mail with the zoom link later this week. Otherwise, please leave a comment to this post and supply your real e-mail (which won’t be published) and I will add you to the list. Thank you!_ ------------------------- Ryan Cooper had a great piece on a “paraparty cooperative ” in Rhode Island that sat both on the inside and the outside of the Rhode Island Democratic Party, and worked to reform and substantiallyreplace it.
In the context of our current electoral system , which favors two major parties and makes third-party factionalism largely self-defeating, intra-party and para-party politics are the primary means of effecting change. I am one of those people who detests both American political parties, one for being outright terrible, the other for (in my view, rightly or wrongly) often betraying my values and interests while pretending to represent them, both together for constituting an industry of a piece with American corruption. So for me, this fact that under _status quo_ political institutions, the path to change lies through these abysmal organizations rather than around them is a very bitter pill. Altering our electoral system to encourage the formation of more, better parties is one of my core priorities. But in the meantime, we have to operate through these corpses. Solidaristic paraparty organizations are, I think, the way . “Solidaristic” is a word. Cooper quotes Cynthia Mendes, one of the primary candidates successfully supported by the Rhode Island cooperative: “They do what the political parties used to do for their candidates…show up with volunteers, a shared platform, training.” Unions famously used to look after the material well-interests of their workers, both in their formal role (collective bargaining, advocating for workers in disputes), but also informally, organizing support for members who met with some mischance, and bringing “locals” together socially in ways that reinforced a tangible political identity. Churches, much more within the Republican than the Democratic coalition, also serve this kind of role. Fraternal organization were once important sources of material security, social identity, and political activism. The “Tea Party” movement — whatever you think of them, and yes, fertilized by plutocratic subsidy — blurred the social and the political and effected massive change within Republican politics. Its successor, QAnon, steals a page from the fraternals and then scrawls Zodiac symbols all over it. As the fraternals used wacky rituals, QAnon uses adherence to beliefs mocked and disdained by the broader culture as a mark and measure of belonging. Those beliefs are mistaken and malignant, but QAnon has become a political force within the Republican coalition in part because its practices engender solidarity. (One hopes solidarity is achievable without insularity. Or at least without batshit lunacy.) I now donate hundreds of dollars I can’t really afford each election cycle via Act Blue . Sometimes I donate to 501(c)(3) organizations that solicit my funds for various causes. Again, no criticism, no apologies, we do what we can in the world as it is. But increasingly I think of both of these paths as neoliberal activism, in a pejorative sense. Distant campaigns and organizations present themselves to me in a competitive marketplace of professionally-organized virtue, “effective altruism” if you will. My role is analogous to that of a consumer, to spend my dollars wisely, get the most virtue done for the buck. The relationship is fundamentally transactional. We are isolated, atomized, coordinating only through the offerings providers choose to make available. I worry that these donations are somewhat analogous to masturbation in the Proud Boys’ ontology,
that they represent a kind of leakage of energy that could be put to more fruitful use. Act Blue has raised more than three billion dollarsthis election
cycle, to be mostly spent within the politics industry . What if some of those billions had gone to solidaristic, activist organizations to move the Democratic coalition? 501(c)(3) nonprofits collect _hundreds_ of billions of dollars in donations annually, many of which do go to politically active solidaristic organizations, those churches that profoundly influence politics within the Republican coalition. The existence of GoFundMe is a sad, grifty, paean to a desperate need for solidaristic mutual aid, which might be levered towards political change that renders such improvisations less necessary. So, I think that, politically, the way forward is solidaristic paraparty organizations that are overtly political within the two party coalitions. Their role would be to force representation of interests and values currently eclipsed by the cadres who dominate both parties, professionals for whom constituents are purses to shake, attached to voting habits that impose constraints they have become adept at loosening. These “paraparty cooperatives” would adopt both “outside” strategies (primarying incumbents who don’t represent them, sometimes challenging bad general election candidates despite the risk of spoiling) and “inside” strategies (securing roles within party committees, think-tanks, etc while maintaining solidaristic connections to discourage them from entirely “goingnative”).
If this is of interest to you, please participate in the seminar onFriday!
Steve Randy Waldman — Tuesday, October 13th, 2020 at 11:53 am PDTpermalink
UNIVERSALISM AND MEANS-TESTING Meagan Day points out,
correctly, that the pandemic experience has buttressed the case for universalism over means-tested programs: > When eligibility for benefits is conditional, all kinds of bad> things happen
> ,
> ranging from the intentional exclusion of whole (usually maligned > and disempowered) demographics to huge numbers of otherwise-eligible > people tripping over red tape and falling through the cracks. > Another major problem with means testing is political: so long as > there’s an income threshold, austerity-minded politicians will > always try to lower it, leaving more people out>
> as time goes on. In other words, targeted social programs make easy> targets
> .
>
> …
>
> Part of the architecture of capitalism is that truly wealthy people > are a tiny minority of the population, and the focus on whether this > minority gets a minor boost out of a universal program that would > bring stability, security, and prosperity to the vast majority (and > would be paid for by progressive taxes) has always been a> distraction.
Max Sawicky (with whom this blog has tangled on universalism before)responds . In my
view Sawicky is far from persuasive: > Means-tested benefits are said to limit eligibility and leave many > needy behind, unlike ‘universal benefits.’ Unfortunately, there > is no really existing universal benefit that remedies this problem, > so we are committing the basic fallacy of criticizing an existing > program by comparison to an idealized alternative. There is no > reason a benefit founded on a means-testing formula could not be > provided to anyone you might like.>
> The real rationale for means-testing is not that it deprives the > unworthy of assistance. That is a straw man often deployed by the > less progressive among us. It is that for any sub-group of the > population, a means-tested program will be cheaper, or for any given > amount of money, it can provide more assistance than a universal > one. Advocates for universal benefits must compete with equally > righteous left advocates for other types of spending. In practice, > public funds are limited. (Also true in an MMT world, by the way.) It is Sawicky, I think, who is guilty of straw-manning here. That the stated purpose of means-testing is to maximize the benefit-per-unit-dollar to the targeted group is not disputed by anyone. No one suggests that means-testing is imposed _explicitly_ to create bureaucratic hoops in order to deny benefits to the eligible. Universalists suggest that in practice, means-testing of individual programs often has that _effect_, sometimes unintended, some tacitly intended by public officials who, whether out of ideological pique or in response to fiscal pressures, engineer eligibility criteria to limit disbursals. We had a spectacular example of that when Florida’s Republican governor Ron DeSantis had to acknowledge that his predecessor had deliberately made filing for unemployment benefits difficult, in order to forestall pressure on the insurance fund that might have required raising business taxes. (Unemployment insurance is not a means-tested program, but like means-tested programs it is gated by an application bureaucracy which always has the effect, whether intended or not, of limiting benefits to a subsetof the eligible.)
It’s a particularly odd time for Sawicky to write “there is no really existing universal benefit that remedies this problem, so we are committing the basic fallacy of criticizing an existing program by comparison to an idealized alternative.” In the CARES Act, we just had an (almost) universal $1200 cash payment, and despite the fact that the United States lacks the infrastructure for benefits deposits that are a matter of course in more civilized countries, those payments were almost universally received. Someday a comparison will be done of the fraction of the eligible who received their $1200 payments, versus the fraction of eligible people and small businesses that received Federally enhanced unemployment insurance and forgivable PPP loans. Does Sawicky believe the comparison will reflect well uponthe latter?
A fundamental misunderstanding undergirds this whole debate, that it’s an argument of “means-testing” _versus_ “universalism”. Universalists don’t dispute the necessity of means-testing, they dispute _how_ and _where_ means should be tested. Partisans of “means-testing” are really arguing for _within-program means-testing_ — that each benefits program should have its own means-based eligibility infrastructure. “Universalists” are also very devoted to means-testing. We just think all programs should share a single, efficiently managed and enforced, means-testing infrastructure rather than jerry-rigging one for each individual benefit. Means-testing is inherently intrusive of privacy. It is costly in time, money, and sometimes dignity, for applicants and for validators. It imposes, in the language of economists, large deadweight costs, from the cost of the exercise itself, and from the social cost of benefits deterred by the exercise and so undelivered. It is simply more efficient to have a single and, um, universal means-test, and use that for all programs. And we do have a universal means-test. It is called the income tax. Universalists argue that rather than means-testing program by program, we should just provide the benefits unconditionally, but “take them back”, in different degrees, financially, via the income tax. In accounting terms, gross outlays (whether they be cash benefits or “in-kind”) are to be divorced from means-testing and, to the maximum extent possible, any other sort of eligibility bureaucracy that imposes deadweight costs. But _net outlays_ — benefits extended minus taxes paid — are absolutely means tested. This is just more efficient than multiplying eligibility bureaucracies for every program. But its advantages go beyond eliminating redundancies. Providing benefits up-front and then charging on a sliding scale as income is realized supports the insurance function of social spending. People’s incomes are uncertain and only verifiable after some delay. Requiring demonstration of inadequate means up-front, rather than on the back-end, creates at best a delay between when a shock is experienced and when it can be ameliorated. “Delay” can mean your kid skips meals, you start rationing your insulin, or your family is evicted from its home. It’s a big deal. Further, from the perspective of recipients, benefit withdrawal is itself a kind of income tax, often imposing very high effective marginal rates at low levels of income. We make programs “cheap” by making people just richer than beneficiaries pay their way, rather than let the burden fall higher on the income distribution. Within-program means testing may be “progressive” relative to no program at all, but it’ll be regressive relative to a universal program funded from the general budget. Bouncy tax rates and cliffs are bad policy that affect human incentives in real, socially costly ways. Restricting means-testing to the tax system allows us to structure incentives rationally and burdens ethically. Less materially, but perhaps more importantly, universal programs unite and ennoble us while within-program means testing divides and diminishes us. Humans perceive flows of funds and services in gross terms rather than in net terms. We all have the use of the roads “equally”. In net terms, you can argue that poorer people get full use of the roads without much funding them in taxes, so they are lucky duckies. Or you can argue that the rich use the roads much more than even the home-owning, property-tax-paying middle class, so the flow of net benefits is severely regressive. Argue this shit all you want, as a wonk or whatever. Most of us just perceive the roads to be fair and free to all, and the taxes as something else entirely. Roads are common infrastructure, an interest we share, a good reason to support solidaristic government. Given the high salience of gross flows rather than net, it’s a free-lunch in terms of social cohesion to provide services and support to all, rather than make very explicit that some are getting “free stuff” that others are not. But what about the _inflows_? If universal outflows to the public are supportive of social cohesion, aren’t the radically varying inflows we require as taxes corrosive of the same? Yes, of course they are. Have you seen how rich people talk about the income tax? However, these aren’t equal and opposite effects. More affluent Americans still enjoy and support the roads and national parks, despite “overpaying” for them. Many of them would be grateful for the option to send their kids to college less stressfully. Further, developed countries have tremendous flexibility in how we finance universal benefits. There is no one-to-one correspondence between a new dollar spent to support a universal benefit and an increase of divisive dispersion in the tax system. Social democracies support universal benefits with a wide mix of income and payroll taxes that render the benefit system more net-means-tested (when they are not capped) and other taxes (e.g. VATs) that render them less so. Choices about the progressivity of income taxes affect the degree to which the benefits state is net-means-tested, and have potentially complicated effects on social solidarity. (Very progressive taxes leave high-income people disgruntled over the short term, but over the long-term, very progressive of taxation can contribute to a “predistribution” more conducive of solidarity .) Developed countries that control their own currencies have wide latitude to finance benefits with “debt” instruments that are more like preferred equity. If they are careful, they can wisely distribute the inflation risk public expenditure may occasion, rather than let expenditure merely magnify it. A wide variety of regulatory policies (e.g. discouragement of predatory consumer credit arrangements) can reduce the degree to which benefits put pressure on prices and so must be offset with potentially divisive taxes. Finally, means-testing _obligations_ rather than _benefits_ better aligns social provision with human dignity. When a person applies for means-tested benefits, they are asked to prove their poverty, which in our society shades towards inadequacy, in order to get something that they need. They must make themselves charity cases. When we means-test obligations, no one is humiliated. Detached from “getting a handout”, there’s not much indignity filing a tax return, regardless of ones income. When ones tax bill is high, some people feel pride (“taxes are the price of civilization”) and some people feel ripped off. But no one is diminished in the eyes of their community, or in their own eyes. If you think taxes are theft and the state is predatory, that is a reason to be angry at others. But your high tax bill is not a personal failing. On the contrary. Whether you are content to pay your taxes or outraged that you have to, the cause of your predicament is a source of pride rather than of shame. From the market or from other sources, the benefits we receive from others without having to beg tell us what we are worth to our society. The taxes we have to pay may be irksome, but they are not deducted from that social expression of value, as long as they are levied on nondiscriminatory terms. There is a free lunch in human welfare embedded in these propositions. We are idiots not to take maximaladvantage of it.
------------------------- _NOTE: While I was writing, Matt Bruenig published a response to Sawicky and Day. I suspect I’ll agree with it, though I haven’t read it carefully yet._UPDATE HISTORY:
* 28-Sep-2020, 3:55 p.m. EDT: “It is costly in time, money, and sometimes dignity, for applicants and for validators.” * 22-Oct-2020, 1:35 p.m. EDT: “…the benefits we receive from others without having to beg tell us what we are worth to others inour society.”
Steve Randy Waldman — Thursday, September 24th, 2020 at 3:26 pm PDTpermalink
REPRESENT
It has become a cliché to say that this election is not about electing a President, but preserving democracy in America. That’s much less because of Donald Trump than because of the “doom loops” (in Lee Drutman’s term ) between the two political parties. It’s bad enough that we have only two parties that leave most of us poorly represented. But as the parties increasingly differentiate themselves across issues of identity and culture, the “winner-take-all” nature of our electoral and political institutions can no longer tempered by the horsetrading and difference-splitting. Our conflicts can no longer be resolved by compromises that leave us all feeling represented, albeit imperfectly, and fighting over matters of degree. Instead the parties have manufactured two distinct superidentities, and rehistoricized them as ancient hatreds. Both parties, and the partisans they’ve made us all, agree that we face a battle of good versus evil, sanity versus chaos, for the very soul of the American republic. Only one slight difference remains to be resolved: Which is which, who is who. Framed this way, I am not neutral, I have a view, my own allegiances. But it is a catastrophe that we have framed things this way. Democracy is a sham, in practice and in theory, if half of the people are simply evil. And they are not, in any objective sense. Our horrible partysystem , a politics
industry that caters to plutocrats, and insiders’ incentives to secure incumbency, have caused us to
reconstruct ourselves in this way, yin to one another’s miserableyang.
One source of our discord is majoritarianism, which drives destructive competition between our political factions to win just a tiny margin over the other one. “Majority rules” is a deeply flawed basis for democratic institutions. It conflicts with a more functional virtue, representation, the idea that everybody should have a voice, no one’s interests should fall beneath consideration. Under strict majoritarianism, minorities have effectively no voice if a majority organizes to wield power. In liberal democracies, the most catastrophic harms of majoritarianism are (supposed to be) mitigated by minority rights, basic protections and liberties that even organized majorities are not permitted to violate. But even when those are respected, majoritarianism leaves minorities boxed out of any agency in the national project. When organized factions are nearly evenly matched (as our abysmal political institutions encourage), unsubverted
majoritarianism would have 50% of the electorate plus 1 rule entirely, no matter how strenuous the objections of the other 50% – 1. This is not a functional or legitimate way to rule. (Our abysmal political institutions are not so straightforwardly majoritarian, so they don’t have that flaw, exactly.) Opposing majoritarianism is not a defense of minoritarianism. The idea that some benighted minority should rule is obviously worse. But Republicans’ anti-majoritarian turn is itself a function of the structural majoritorianism of the institutions they contest. Majoritarian institutions invite the question “majority of whom?”, and the winner-take-all character of “majority rules” means the whole ballgame can turn on small changes in the always contested boundaries of the enfranchised. Under institutions where power is proportionate rather than binary, temptations to nibble at the edges of electoral eligibility or convenience disappear. Questions of suffrage become the fundamental questions about the nature of the polity that they ought to be, rather than playthings for party operatives looking to shave a few points from their opponents. Representation is the ideal to which our political institutions should aspire, not “majority rules”. But representation must not be merely formal. Having “representatives” in a legislative body where they are always outvoted is not really representation at all. A democratic polity requires institutions that ensure the entire public is represented in _outcomes_, not merely in deliberations that become perfunctory or, even worse, performative, so the routinely outvoted become recklessly extreme, as compensation for impotence and in competition for press. Obviously, contending factions sometimes have mutually exclusive preferences, so that one faction must win and others must lose. But then you should win some and lose some, in proportion to your support among the general public. When possible, compromises should be crafted that attend in degrees to all of the public’s interests, and then passed with a high degree of legislative consensus. And such compromises usually _are_ possible, when politics properly orients itself around conflicts in the material world, where differences can be split and priorities traded, rather than around questions of identity, morality, and status, questions on which contending factions must win or lose with nothing in between. Where compromises are not possible, we should have to take turns. Turn-taking should occur much more frequently than multiyear election cycles. Even within a single legislature, the majority should win only sometimes, and lose sometimes, in rough proportion to its dominance. There should be no possibility, none at all, of any faction dominating eternally, winning so big they need never fear reprisal for whatever they do to others. The golden rule must be a norm upheld and alwaysenforceable
between political factions. Our politics creates its public much more than the public creates our politics. We should seek a politics that constructs a public respectful of difference, that wields persuasion as its core implement of change. Representation in the way I’ve described it can conflict with other virtues. There are tensions between turn-taking and the strategic coherence required to run an effective state. When everyone seems represented, it becomes harder to know whom to hold accountable, and how, for policy failures. It must be possible to take actions, sometimes to make big, contentious changes, and commit to them in ways that won’t immediately be reversed in stupid oscillations when the next turn is taken. American institutions already suffer from terrible _status quo_ bias, and richer representation should not exacerbatethat.
These are real issues, but they are (imperfectly) resolvable issues. Representation is the heart of democracy. Forms of majoritarianism that circumvent rather than support it should be abandoned. In the short term, for the United States, this means eliminating abominations like the “Hastert Rule ” (which both parties and both chambers have now effectively adopted) in favor of legislative procedures designed to maximize enfranchisement, of the minority party and of diverse factions within the parties. In the medium term, it implies changing our electoral system to one that yields proportionate representation, rather than reshape the public into two bitterly contending factions. In the longer term, it implies innovations within the institutions of democracy that ensure turns are always taken except when strong consensus can be reached. ------------------------- _NOTE: I’ve just read Drutman’s book_ Breaking the Two-Party Doom Loop _, which has helped color my thinking. I’d take issue with some aspects of the political history it tells, but it does a great job of explaining why our politics is such a mess, and casting a light forward towards the kinds of ideas that might remedy it. I heartily recommend it. We’d have a better world if it were more widely read._UPDATE HISTORY:
* 22-Sep-2020, 12:40 p.m. EDT: “…would have 50% of the electorate plus 1 rule entirely, no matter how strenuous the objections of the other 50% – 1.”; “I’ve recently just read Drutman’s book Breaking the Two-Party Doom Loop , which has helped color my recentthinking.”
Steve Randy Waldman — Monday, September 21st, 2020 at 3:35 pm PDTpermalink
POLITICS IS AN AMERICAN INDUSTRY American industries — the ones that sit at the new commandingheights
of the economy — look nothing like the collections of the atomized, competitive firms described in an introductory Economics textbook. Industries like technology, finance, health care, higher education, and media dominate our collective lives, and yet they are not regulated by anything recognizable as open competition for the custom of decentralized consumers. These industries share some things incommon.
I. AMERICAN INDUSTRIES DO GREAT THINGS Health care is really important. Doctors and nurses and hospitals and drugs do great things. Finance is essential. Without a payments system, credit, and investment a prosperous economy would be impossible. “Big tech” and the ecosystem of startups that serves as its farm team really do put much of the world’s knowledge at our fingertips and make it possible, even through the isolation of this pandemic, for us to communicate and collaborate, to escape and to love despite our bodies’ imprisonment. Higher education, regardless of whether employers value it for skills or for signalling, is powerfully transformative for many of us who experience it. Etc. II. THE MEANS BY WHICH THEY FINANCE THEMSELVES ARE PROBLEMATIC Yeoman capitalism tells a very simple story about how firms and industries get financed. It is supposed to be end consumers who, _en masse_, finance or fail to finance firms by virtue of well-informed, voluntary choices about whom to pay in exchange for delivered value. This is an apt description of how none of these industries get paid. Health care, finance, education, technology, and media are not for the most part financed by independent bilateral transactions between well-informed parties. These goods are sometime purchased in bundles, sometimes financed by third parties or the state, sometimes financed by contractual contingencies imperfectly understood by their payers (“tricks and traps”, as Elizabeth Warren used to call them), often arranged under circumstances of asymmetric information or simply absent information . Rather than vying against one another for customers, “competitors” in these industries often work cooperatively to secure the shared bases of their cash flow. Citibank and JP Morgan, Berkeley and Stanford, the Mayo Clinic and Johns Hopkins, Google and Apple, they all do genuinely compete for “customers”, but their fates are much more determined jointly, by the terms on which the state structures finance, offers research grants and student loans, by third-party health insurers (public and private), by how antitrust law is interpreted and enforced. Often the financing of these industries is perceived (accurately) as predatory or plutocratic or both. Outside of informed, competitive markets, payments become less than voluntary. Late fees and overdraft fees, usurious interest on credit you never intended to revolve, incomprehensible medical bills for services not meaningfully chosen at outrageous prices never meaningfully agreed, tuition affordable only by virtue of taking on arbitrary debt, in a context where opting out means foregoing any chance of a comfortable middle class life: All of these financing arrangements are predatory. If you get into Harvard, maybe tuition is paid, thanks to an endowment based on flattering plutocrats. Print media increasingly depends upon supplemental “support” from the wealthy, which conditions the character of the national conversation. Google and Facebook are far from free. Every user and every nonuser of the services pays exorbitantly for their services, and not just in “data”. Their profit margins are embedded in the costs of every good and service that advertises on those platforms. We finance them, but we don’t have any choice or control over the product like we would as customers in a competitivemarket.
III. THE PEOPLE WHO WORK FOR THEM ARE NICE As human beings, at an interpersonal level, people who work in technology, higher education, heath care, technology, or even finance are good people. Not all of them, of course. Perhaps there is some accuracy in a statistical sense to bankers being bastards or Silicon Valley tech bros or whatever. But even within those industries, as among nearly every occupational category, most people are good people, doing the best they can, trying to do the right thing although no doubt accepting some tradeoffs. Nurses are notoriously caring, and yet their salary derives from a predatory, kafka-esque pricing system . My college professors were amazing people. In terms of dimensions like civility or politeness, the workforces of these predatory, problematic industries are probably _nicer_ than the general population, because they are disproportionately educated and the norms we define as polite are to some degree the cultural mores of the educated. And because of affluence. Certain kinds of patience, civility, and generosity are “normal goods” in economics-speak, things the comfortable can afford but the less comfortable must do with less of. However you want to cut it, the people who work for these industries are not “bad people” in any natural sense. You can define them as bad by construction, if you like, by virtue of their complicity in their industries’ sins. But they’d do fine in any Turing test for niceness and decency in which occupational status was blinded. IV. AMERICAN INDUSTRIES EVOLVE TO INSULATE MOST OF THEIR WORKFORCES FROM ASPECTS OF THEIR INDUSTRY’S FINANCE They have to, in order to reconcile points II and III above. If you ask ER doctors about the “chargemaster”
— the hidden skein of prices that vary by procedure, party, and phase of the moon that determines how much you are billed — they will not be great fans! In my experience, most doctors agree that it’s a shitty system, incomprehensible and unjust, and they sincerely wish that it were different. If you ask whether that system affects the care they provide, the answer is usually no. Doctors mostly say they provide the best care they can in medical terms, and don’t think very much about what happens on the financial side. You can argue that this is good thing (best care possible!), or a bad thing (maybe second-best would have been more than good enough and would have helped the patient financially). But it is a thing. Most people who traded the bonds that in 2006 were stuffed with predatory and fraudulent mortgages never themselves sold home-buyers from minority communities on adjustable-rate mortgages with prepayment penalties that would become unaffordable once the teaser rate expired. They were professionals at big banks, selling to institutional counterparties, all wearing similar suits. A lot of what amounted to fraud in aggregate was straightforwardly justifiable by the people most directly involved in perpetrating it. Real-estate can be valued by capitalizing the rents properties would generate, or in terms of “comparables”, what similar properties are selling for. When market prices started to decouple from capitalization-derived estimates, was it wrong for appraisers to increasingly emphasize valuation by comparables as more “empirically accurate”? Especially since banks, eager to lend, would preferentially hire appraisers “in tune with the actual market”? In aggregate the industry perpetrated tremendous fraud, but much of it was organized like the translation of Monty Python’s “Funniest Joke In The World “, with each participant never exposed to more than a tiny part of an ugly, lucrative bigger picture, deniable especially to themselves. American industries, which work simultaneously to maximize revenue and keep the loyalty of highly sought professionals, naturally arrange themselvesthis way.
V. WORKFORCES CANNOT BE _COMPLETELY_ INSULATED FROM DISAGREEABLE ASPECTS OF THEIR INDUSTRY’S FINANCE Somewhere in some office at every hospital chain, there are the people whose job it is to maximize revenue by imposing or negotiating a multiplicity of nose-bleed prices for each medical procedure, none of which will be routinely published or disclosed to patients except at the time of billing. They know it isn’t nice. At every health insurer there are the people whose jobs it is to deny coverage whenever coverage can be denied. All of these people have rationales by which they can justify their work. The hospitals are struggling! (Often the rents in our healthcare system get paid out of hospitals to overpriced providers, drug companies, device manufacturers, administrators, etc rather than accruing as juicy profits in hospitals.) Fighting insurance fraud and limiting coverage to contracted care keeps premiums “low”! During the housing boom, eager mortgage originators would themselvesfudge
or (much safer) advise borrowers to lie on loan applications. They understood they were committing or suborning fraud. (But this housing boom has legs! Sure it was lucrative, but they were also democratizing the American Dream, helping new homebuyers succeed despite little blemishes.) Bankers who purchased mortgages to bundle into securities overlooked deficiencies they knew existed in the pools that they purchased. The people they were selling them to (but not people on behalf of whom those people were buying) were “consenting adults”, _caveat emptor_. Workers at rating agencies would famously take on securities “structured by cows” as part of a focus on “maximizing revenues”. (But they scrupulously applied the formal models that were then the industry standard! Though they knew the model “def does not capture half the risk.” Still, they adhered to procedural norms!) In these examples from health care and finance, basically a segregated minority of the workforce is exposed sharply to the ickiness of the business model, helping preserve the innocence of the rest. But of course, in all of these industries, there are aspects that cannot be so well shut away. When engineers at Facebook are optimizing for “engagement”, they know what they are doing. The surveillance is not occluded from Googlers by its sexier names, “analytics”, “machine learning”. Until a few years ago, it seemed (at least to me) common for college professors to point to the average “college premium” and argue that the student loans on which their institutions relied were basically a good deal (nevermind the tremendous variation hidden in that premium and that its increase over the decades derived more from falling noncollege wages than rising college wages). Current affairs writers like to think of themselves as proudly independent, but the pieces they pitch, that they expect editors might accept, are conditioned by the perspectives of donors and the red lines of advertisers, as well as by any inherent public oraudience interest.
These industries do their best — really! — to carve out zones of independence, within which the incentives that derive from how they are financed are blunted, so that other values can express themselves, and so their professional, decent, often idealistic workers can sleep at night. But they cannot insulate their workforces completely, nor can their workers be absolved entirely for their remunerative complicity with the cash-flow-generating aspects of their industries, however much they may dislike or wish to reform them. And workers overestimate their independence. They internalize the constraints. They make up good reasons for coloring within the lines rather than admit that the gravy train requires they do so. They reflect upon their work proudly. It is only coincidence that their independently defensible choices happen not to conflict irreconcilably with the interests that finance them. ------------------------- Politics in the United States is another American industry. It runs the gamut from elected officials and their campaigns, to the consultants, think-tanks, lobbyists, staffers etc. Even civil servants and military officers, with secure jobs and government paychecks, are part of the industry, and face the same complicated incentives, as long as the opportunity to rotate into private-sector parapolitics isof value to them.
Like other American industries, politics does great things. A government must be staffed and run, decisions must be made, expertise must be brought to bear in crafting legislation, public policy research must be done. Political parties must contend if representative democracy is to function, and that contest must be staffed and funded. Like its peer industries, politics’ financing model is indirect, predatory, and plutocratic. Obviously the “donor class” that funds PACs and think-tanks is a plutocratic revenue source. Government contracting, revolving doors into which condition civil servants’ real-time decisions, constitute a predatory source of revenue. Politics, like finance, includes certain niches of workers who are explicitly, ostentatiously assholes. But for the most part the politics industry is staffed by well-spoken, idealistic, decent people. Nice people. To outsiders, politics appears horrible: ugly, predatory, oppressive, corrupt. But insiders “know” that while there is _some_ truth to that, it is mostly a caricature. Most people are not selling out or doing horrible things. Most people are working sincerely to advance agendas they believe in. Even many lobbyists, the plainest sort of hired gun, are idealists who choose the causes they work for based on prior attachments and commitments, rather than bending to some plutocrat’s will. (Of course, the likelihood that people working to advance prior commitments succeed at making a career of it is not independent of plutocratic interests. But that is outside the control of the sincerely motivated lobbyist!) Lobbyists are justifiably proud of the resources they bring to bear to support legislative and rule-making processes, resources that far surpass what our intentionally atrophied government makes available to itself forthese purposes
.
Still, it is true that workers in politics cannot _completely_ insulate themselves from the predatory and plutocratic incentives that come with how the money works. Compromises must be made. Just as an aspiring politician can do no good if she cannot get elected (and then re-elected), a research institute can do no good if it has no funding. The people in the industry know this, concede it. For those (not all!) whose political attachments are in conflict with the financial incentives, they lament it. But they also “know” that outsiders underestimate the degree to which their choices are right on the merits, even though they are tarred as betrayals or corrupt concessions. If we were in their shoes, we would understand and feelthe same way.
Politics is an American industry, just like all the others. It is awful in some ways, but it is also essential. I think we should wish to reform it, dramatically, but it won’t be reformed alone. It is of a piece with peer industries. It won’t be repaired without also repairing the political economy that surrounds it. ------------------------- _NOTE: I want to thank all of the people who participated in last month’s “seminar” . I enjoyed it, and hope you did too. I hope to try some other experiment (that involves me talking less) sometime very soon._UPDATE HISTORY:
* 17-Sep-2020, 2:05 p.m. EDT: “II. The means by which they are financed is are problematic“ * 17-Sep-2020, 5:35 p.m. EDT: “II. The means by which they are financed finance themselves are problematic“ * 22-Sep-2020, 12:45 p.m. EDT: “V. Workforces cannot be _completely_ insulated from disagreeable aspect’s aspects of their industry’s finance” (Thanks commenter Jeff!) Steve Randy Waldman — Thursday, September 17th, 2020 at 9:55 am PDTpermalink
AN EXPERIMENT, YOU’RE INVITED… On-line writing is less social than it used to be. I have long rants about why, and what that even means. Maybe I’ll blog them someday. Anyway, until we remedy that (I think we should remedy that!), assholes like me will just have to cope. There’s Twitter, which is like the junk-food version of on-line intellectual sociability. I have to confess I draw most of my nourishment, and most of my poison, from there. But I am not happy about it. In this moment when teleconferencing has replaced almost every other form of human sociability, I wondered, why not this too? So, on Thursday, I’ll host a Zoom “seminar” using the previous post, “Weakness is provocative “, as its launch pad. I’ll make a short presentation of the ideas in that post (I’ll try to keep it interesting even for those who’ve read it), then we’ll segue from a Q&A session and then to free-form chat. Of course, whatever people say about the best-laid plans would never apply to what I arrange, my plans are uncommonly shoddy. So, we’ll see! The time will be 3pm EDT / 12pm PDT / 7pm UTC, this Thursday August 27th. If you’re interested, I’ll need your e-mail to send an invite. Please add a dummy comment to this post with a real e-mail (the e-mail you provide when you comment is not published), or DM me with your e-mail at @interfluidity on Twitter if you are interested in attending. I’ll send back a Zoom link / invite by Thursday morning. Thanks, always, for reading! ------------------------- UPDATE: The slides I presented are available here.
Steve Randy Waldman — Monday, August 24th, 2020 at 4:08 pm PDTpermalink
WEAKNESS IS PROVOCATIVE I don’t think it’s an exaggeration to say that our electoral system is destroying our society. The United States uses single-winner, “first-past-the-post”, plurality voting for almost everything. When we elect someone, we define an eligible electorate, create some procedure by which candidates can get their name on the ballot, and the position goes to whomever gets the most votes, regardless of whether that’s a majority. It’s a simple, intuitive, form of democracy. It’s alsoterrible.
The most commonly discussed flaw, sometimes recast as a virtue, is“Duverger’s Law
“, which points out this system herds people into two-parties. Plurality voting renders a multiplicity of political parties unsustainable, as distinct but somewhat aligned parties that fail to join together split one other’s vote, handing victory to groups the somewhat-aligned parties detest even more than one another. I endorse this critique. I think we’d have a much healthier democracy if citizens could make homes in political political parties that genuinely reflect each of our values and interests, rather than melting into two permanent, bitterly contested, coalitions. The Americanist apology that the broad coalitions forced by a two-party system yield moderation, stability, and compromise has, I think, been discredited by events. Instead, incumbency incentives within the United States’ two party system demand entrenched polarization , however dysfunctional that is for the polity as a whole. Less frequently discussed than all of that is how _weak_ first-past-the-post voting is, with respect to resisting corruption. And weakness, Republican politicians eternally remind us, is provocative. Single-winner, first-past-the-post elections are often described as “winner-takes-all”. That means that in a close election, the leverage, the “ROI”, associated with stealing a small edge can be huge. If the ultimate margin of victory of an election is likely to be within 2%, you only have to manipulate, suppress, or steal 2% of the vote to win 100% of the power. Then we are “shocked, shocked” that political entrepreneurs with an interest in the outcome (not necessarily of the parties themselves, _it could be Russia!_) do play for such edges. But that’s only true for close elections, right? Yes, that’sright.
But because single-winner, first-past-the-post voting yields a two-party system, we should expect that the most consequential elections will frequently be evenly matched. The two parties are strategic actors, and they want to win a struggle for power. When either party’s strategy leaves it losing that struggle by a clear margin, that strategy will change, one way or another, even by poaching aspects of the other party’s identity if necessary. (Consider the realignment of the Democrats when 12 years out of power in 1992, or Republicans’ adoption of Dixiecrats.) With party institutions more eager to contend for power than they are devoted to any fixed ideology or constituency, a 50/50 divide is the equilibrium, the attractor. So, to sum up, the United States’ electoral system yields:*
Elections that, when closely matched, yield a tremendous return to just a little bit of manipulation, corruption, or voter suppression*
A near certainty that the most consequential elections will often beclosely matched.
That’s pretty bad, right? It’s worse than that. Parties will try all of the above, manipulation, corruption, and voter suppression. But manipulation is the safest — because it’s often legal, “legitimate” — so it is done most loudly, most aggressively. If you can do something, any little thing, that fucks with the news cycle immediately preceding the election, you can win everything for almost nothing.But one pundit’s
manipulation is another statesman’s persuasion, right? What’s wrong with trying to persuade voters to come to your guy’s side (or stay home rather than voting for the other guy)? The thing is, a two party system imposes by construction its own political spectrum, expressible as the probability a given voter will vote for Party A over Party B. Given the broad, unruly coalitions forced by the two-party system, party alignments and realignments are tectonic. They happen slowly, except whey happen quickly in rare, unpredictable events we describe as “earthquakes”, like Donald Trump’s insurgency within the Republican Party (which up-ended some, but not most, of the Party’s prior commitments, and forced some reorientation within the Democratic Party as well). During the run-up to a given general election, however wildly platforms or promises veer left or right, the deep structure of the parties, defined by particular humans and their relationships and commitments, is essentially fixed. Given these fixed coalitions, Party A and Party B, there are the “hard-A-ists”, who would never think of voting B, and the “hard B-ists” for whom voting A would be treason. These groups are connected by a gradient, from the hard A-ists, through the soft A-ists, who are 80% likely to vote A but might sometimes consider the other guy, to the genuine independent, the swing voter, who might really vote either way. The swing voter is, by construction, the voter most indifferent to the core commitments of the competing coalitions. The swing voter is the motherfucker for whom the A-ists and B-ists really are alike, because her concerns are simply orthogonal to the conflict embedded in the structure of commitments that, by a given election, the two parties have already competed and collaborated to develop in order to divide the influence-weighted electorate (not one person one vote!) into a roughly 50/50 split. (The two parties compete to form and/or poach commitments that would render their side popular. They collaborate by agreeing to leave off the table commitments that might be popular among voters, but that would be antithetical to interests that both parties share, like privileging incumbency or appeasing rich donors.) The commitments of the parties evolve slowly. They accrete over time in personnel decisions and private relationships. They are made credible by the formation of institutions that reward those who uphold them and punish those who do not. But the outcome of elections turns on precisely the voters at the margin who are most indifferent to the divergences between the entrenched commitments of the two parties. It’s not that these voters don’t care, don’t have strong interests, values, and views that they’d like to see represented politically. It’s that, in a given election, the actual contest between the two actual parties is confined to a narrow subset of potential disputes, and there will always be some group of voters who are more-or-less indifferent to that subset of disputes. And precisely those people are the margin of victory, the ones who decide our elections, much though not all of the time. Harry Frankfurt famously defined bullshit as expression that is indifferent to its truth or falsehood, communication whose purpose is instrumental, rather than to inform or to mislead. If over the timescale of an election campaign, party commitments are largely fixed in ways that usually divide the (influence-weighted) electorate about evenly, but that leave a subset of the electorate genuinely indifferent to which of those two sets of commitments prevail, there is nothing true or false to say that might persuade people. The most political of political speech, the speech we hallow with special Constitutional concern and deference, direct advocacy with respect to general elections, becomes, necessarily, almost always bullshit. We do not learn, at the political conventions now ongoing, which individuals, relationships, and institutions durably guide the parties, what agendas will quietly guide the patronage and grants of power or prestige within each party, should it come to rule. That’s not because there is some nefarious conspiracy to hide party commitments, but rather because the politically engaged public already knows and understands them. Most of us have embraced or made our peace or shunned the parties already, because the two parties’ commitments — both where they diverge and where they don’t — are actually pretty transparent. For those not moved to join a team by these pretty stable, pretty transparent commitments (that have little to do with formal platforms or campaign promises), all that’s left is bullshit (which sometimes takes the form of formal platforms and campaign promises, or uplifting personal stories expressing our team’s virtue and decency, or infuriating anecdotes revealing how craven and vicious prominent members of the other teamare).
Our sacred political seasons are not where the great and weighty principles and compromises that guide our republic get worked out. That happens quietly, in hiring decisions and donor calls, in board and committee appointments, in the consultants and fellows who are hired, versus those who are effusively admired but passed over. Our two political parties are in a constant dance, forming and reforming in reaction to one another, in response to the electorate as they perceive it and the institutions (whose shape is also a battleground) through which that electorate expresses itself. In the American system, most politics happens within the parties. The role of the public is indirect: To constrain the coevolution of party politics, because the parties must stay locked in 50/50 embrace. And then to flip a coin, to decide which coevolver wins. The public meaningfully decides only during elections (maybe including this one) where the 50/50 embrace has failed, where events have outpaced the parties’ capacity for realignment and left one party so far behind the midpoint attractor that the cloud of noxious randomness generated by inexhaustible bullshit and competitive manipulation and suppression just is not enough to give it a serious shot. But many elections are close enough that it is not the party that decides, but the bullshit. And bullshit is too anodyne a term. The competition to sway a few points of the most indifferent fraction of the electorate during the run-up to our elections encourages parties to manipulatively incite passions, to inflame divisions, whose relevance to what will actually be decided is minimal. But the wounds to social peace endure, to be inflamed again and even further next time around. Bullshit is endogenous to our electoral system. But not just any bullshit. Painful bullshit, “toxic”, destructive of the mutual goodwill that institutions of a virtuous nation should seek to cultivate, while not delivering much in the way of meaningful enfranchisement to justify the pain. This is not how I’d design a democracy. I’d like to change it. But, in the words of a prominent if not great statesman, it is what it is. I do think it a bit rich to complain when all kinds of actors — foreign and domestic, inside the parties and out — join the fray and try to bias the coin as it flips. It’s what we should expect, when we’ve crafted a system that very often gives all the marbles to whoever can put together an edge of just a few percentage points, in a few key races, among the portion of the electorate that cares least about what is actually at issue, who are forced to choose among parties whose commitments they have little role in shaping. ------------------------- More cynically, each party’s consulting classes require they always be perceived to be in close contention, or their gravy trainwould cease.
I’m omitting discussion of maybe-nonvoters, but I don’t think they change the story very much. Like the marginal “swing” voter between parties, the eligible voter who might or might not show up sits at a point of indifference, where whatever the two parties are offering, the perceived advantage of one over the other is not great enough to overwhelm the cost or inconvenience of voting. Like the other category of swing voters, these voters are in practice absolutely crucial, should absolutely not be ignored by political campaigns. Get-out-the-vote is a big deal. But that is precisely because these citizens comprise part of the population of near-indifferent voters who often in practice decide our elections. Much, not all, of the time, because sometimes (like now, this election, I hope!), events outrun the slow competition and coordination of the parties to embody commitments that about equally divide the electorate, so that one party has a temporary but propitiously timed clear advantage over the other. When this happens we escape the pull of the 50/50 election, and the marginal, nearly indifferent, voters become less relevant. But it’s rare that a predicted victory margin is so wide and certain in real time that campaigns can afford principled restraint in favor of less principled attempts to manipulate the marginal voters. The cost of a small mistake in polling would be the whole game. Steve Randy Waldman — Saturday, August 22nd, 2020 at 10:22 am PDTpermalink
DISPERSION CAUSES DISCOHESION Dispersion causes discohesion. It is hard to have a cohesive, high-functioning, society when dispersion of individual outcomes — “inequality” — is high. Some people argue that mobility is an answer to dispersion, that it’s okay, great even, to have extremely unequal outcomes as long as it is possible for people who begin poor to end up rich (and _vice versa_). I’ve argued against that before . This post will further explain why I think celebrating the combination of inequality and social mobility is a particularly dumb idea. We’ll start with a simple, tragic fact. In a society where there is both a high dispersion of outcomes (income, wealth, status, whatever people aspire to) and a high degree of mobility, from most individuals’ perspective, it’s more profitable to engage in distributional conflict to advance _within_ the distribution than to cooperate to help _shift_ the distribution, without competing to improve ones own rank. Let’s illustrate this with a some pictures. The grey bell curve represents the distribution (of wealth, income, status, whatever) in a society with a high dispersion of outcomes. The cyan bell curve represents how that full distribution might advance over the course of one lifetime, if most members of the society worked cooperatively to increase the general Welfare. The trouble is, if there is social mobility in this society, individuals have an alternative strategy. Rather than cooperating to shift the bell curve, they can compete with one another for slots within the existing bell curve. I’ve illustrated the situation of a hypothetical modalperson.
Competing for rank in the distribution is a zero-sum game, so a “representative agent” that formed its expectations by averaging all outcomes, or an individual agent whose “rational expectation” was formed by assuming its odds are as good or bad as anyone else’s, might conclude that the expected value of this strategy is zero. However, that strikes me as unrealistic. In societies that celebrate social mobility, individuals are encouraged to have optimistic expectations, to believe that with our hard work we can exploit our own talents to “get ahead”. Let’s imagine that’s so, and a substantial fraction of agents believes that by competing for a better position, they can advance by one standard deviation within the distribution (the red arrow labeled “Conflict“). Now suppose that the plausible rate of _aggregate_ progress, holding ranks constant, even if we organized effectively and cooperatively, is smaller than a one-standard deviation shift (the green arrow labeled “Cooperate“). Then basically it will be individually rational for all “optimistic” agents to devote themselves to contesting their rank within the distribution, rather than cooperating to work in ways that would contribute to aggregate prosperity but might not improve their own rank. The more optimistic the society is, in the sense that people believe that _individuals_ can get ahead through their own efforts, the smaller the share of people who will eschew contesting social rank in favor of cooperating to advance aggregate prosperity. Now let’s run the same thought experiment for a less unequalsociety.
Nothing has changed except the standard deviation of the bell curves I have drawn, representing the dispersion or inequality of the population. Again, “optimistic” individuals believe that by contesting their ranks, they can advance one standard deviation in the distribution. However, because this distribution is narrower, that degree of advancement is _less than_ the progress they could plausibly expect if they held their rank within the distribution, but they organized cooperatively to achieve aggregate gains. Contesting ones place in the distribution, rising up by pushing others down, is a dumb strategy relative to cooperating to achieve aggregate gains. To riff on Eugene Debs, whether
it makes sense to try to rise _from_ the ranks or to rise _with_ the ranks is endogenous to both the level of inequality in a society, and the perceived social mobility available to optimistic agents. In a very unequal society with a high degree of rags-to-riches optimism (whether objectively defensible or not), lots of people will choose zero-sum conflict over rank rather than positive-sum cooperation towards progress. You can resolve this problem in a couple of ways. If you want a society that is both functional and unequal, you can choose illiberalism. Once mobility is off the table, if people understand that contesting their social rank will be fruitless, perhaps even punished, then the only strategy with any payoff is to cooperate to advance aggregate welfare. Unequal, illiberal societies can be very functional, so long as they credibly promise that gains will be widely shared, rather than hoarded only by high ranks. Perhaps contemporary China is a rough approximation of this kind of society, though I don’t have much handle on perceptions of social mobility there. My own strong values are liberal, so I’d prefer we retain a high degree of openness to social mobility, but diminish pathological inducement towards zero-sum conflict by limiting the dispersion of the distribution, by reducing inequality. I believe we really do have to choose. We can have inequality without liberalism (the path offered by Donald Trump’s Republican Party). We can have liberal, less unequal societies (the path highlighted by Scandinavian societies). Or we can try to sustain a liberal, very unequal society, and find ourselves beset by continual conflict over rank and position, relying on social pathology at the bottom of the distribution to justify outsize fortunes of the top . I don’t think this last choice, our current choice, can last very long. I don’t think it is intellectually coherent to be liberal but not egalitarian, at least relative to current levels of dispersion. But, the “classical liberal” will remind us, there is an obvious rejoinder to all of this. I have treated competing to advance ones place within the distribution and cooperating to shift the full distribution forward as distinct, mutually exclusive strategies. Isn’t the whole point of capitalism, its core virtue, that an invisible hand transmutes competitive individualism into cooperative gain? Yes! Absolutely! But that doesn’t happen by magic,automatically.
Not all competition takes the form of competitive supply into open and contestable markets that economics textbooks tell us maximize output and eliminate markups. I think it’s particularly important to distinguish this kind of _economic competition_ from _tournament competition_, whereunder people compete for a relatively fixed numbers of slots with high payouts. Too often in the United States we use “competition” as a broad, bland term to legitimate almost any sort of outcome. That is dumb. When warlords pummel one another’s villages until, finally, one of them gains supremacy, I think we’d all agree that is a hypercompetitive process. But, as the smoking wreckage attests, it is a negative-sum game, it is bad not good. Similarly, the tournament that selects admission into Harvard is certainly competitive, but when you add all the resources expended by the losers as well as winners into activities they would not have undertaken for personal development, that tournament is probably also negative-sum. If you have achieved a lucrative partnership at a top law firm, you have brutally competed for your entire career. But if you didn’t win that partnership, someone else would have. Your gain was someone else’s losses. The costs of these usually negative-sum tournaments may be somewhat offset by the virtue of putting the most talented people in places where they can do outsized good. But that depends on very particular circumstances. In a society where _economic competition_ is far from perfect, where firms with outsize market power dominate to harvest outsize markups, individual prospects are largely determined by tournaments for positions within those dominant firms. A world like this is certainly “competitive”, but in a way that should lend it no legitimacy at all. The tournaments for lucrative slots are negative-sum internally, and the external effect of this form of organization is to curtail the textbook economic competition that might otherwise contribute to aggregate well-being. The classical liberal isn’t wrong when she argues that the virtues of economic competition can undermine the case I’ve made above, can reconcile aggregate progress with an unequal distribution in a liberal society. But that it _can_ do so doesn’t mean that it does, or is likely to, in practice. When we say markets civilize greed, we are acknowledging that greed needs to be civilized, that if it is not caged and channeled by certain kinds of institutions, it does harm. To reconcile competitive inequality and collective progress, we’d need markets that are perpetually contested, in which victory is always transient because anyone’s profit is everyone’s wide open opportunity. The world that we actually inhabit looks less and less like that. The more competitive behavior in an economy is characterized by tournaments, the less persuasive classical liberalism’s answer to reconciling competition with cooperation becomes. We revert to the world of our thought experiment. If we adopted some muscular version of antitrust, if we replaced patent monopolies with less destructive approaches to rewarding high-fixed-cost innovation, if we developed means of countering the market power engendered by technological network effects, maybe we could reconcile social mobility, high levels of inequality, and brisk improvement of aggregate welfare. But that would require designing and performing unusually excellent institutions. It would require sustaining those institutions over long periods of time, against continuing, earnest efforts by incumbents to undermine them. Which again suggests we must limit inequality. Because when incumbents have very, very far to fall , it means they have a lot of power today, and extraordinary incentives to rig the game.
Steve Randy Waldman — Friday, July 31st, 2020 at 3:38 pm PDTpermalink
Older Entries
*
INTERFLUIDITY
*
Steve Randy Waldman
*
SUBSCRIBE
* twitter | rss
*
PRESENTATIONS
* here
*
ARCHIVES
* November 2020
* October 2020
* September 2020
* August 2020
* July 2020
* June 2020
* May 2020
* April 2020
* March 2020
* August 2019
* July 2019
* April 2019
* March 2019
* February 2019
* October 2018
* September 2018
* July 2018
* June 2018
* May 2018
* January 2018
* April 2017
* March 2017
* February 2017
* November 2016
* October 2016
* June 2016
* May 2016
* March 2016
* February 2016
* January 2016
* December 2015
* October 2015
* September 2015
* July 2015
* June 2015
* April 2015
* December 2014
* November 2014
* October 2014
* September 2014
* July 2014
* June 2014
* May 2014
* April 2014
* March 2014
* January 2014
* December 2013
* November 2013
* October 2013
* September 2013
* August 2013
* June 2013
* April 2013
* March 2013
* February 2013
* January 2013
* November 2012
* October 2012
* September 2012
* July 2012
* June 2012
* April 2012
* March 2012
* February 2012
* January 2012
* December 2011
* November 2011
* October 2011
* September 2011
* August 2011
* July 2011
* June 2011
* May 2011
* April 2011
* March 2011
* February 2011
* January 2011
* December 2010
* November 2010
* October 2010
* September 2010
* August 2010
* July 2010
* June 2010
* May 2010
* April 2010
* March 2010
* February 2010
* January 2010
* December 2009
* November 2009
* October 2009
* September 2009
* August 2009
* May 2009
* April 2009
* March 2009
* February 2009
* January 2009
* December 2008
* November 2008
* October 2008
* September 2008
* August 2008
* July 2008
* June 2008
* May 2008
* April 2008
* March 2008
* February 2008
* January 2008
* December 2007
* November 2007
* September 2007
* July 2007
* June 2007
* May 2007
* April 2007
* March 2007
* January 2007
* December 2006
* November 2006
* October 2006
* September 2006
* July 2006
* June 2006
* May 2006
* April 2006
* March 2006
* earliest posts
*
CATEGORIES
* uncategorized
*
SEARCH
*
Details
Copyright © 2024 ArchiveBay.com. All rights reserved. Terms of Use | Privacy Policy | DMCA | 2021 | Feedback | Advertising | RSS 2.0