Capitalism Ties Consumption to Production

One of the great benefits of a capitalistic society is the material abundance enjoyed by the people.

I believe the reason people under capitalism enjoy such material abundance is because consumption is linked to production.

Under capitalism, if you are a child about to become an adult, and you want to have some spending money of your own instead of begging the parents, what do you do? You get a job. More precisely, you find an enterprise of some sort that produces stuff for other people and you offer to help them out for money.

The enterprise gets money because it provides for the wants or needs of people. It gets money because it produces.

To the extent possible, the enterprise employees people who contribute to its purpose. People who are rare to find or contribute more get paid more.

Now think of the socialist or centrally directed society.

People generally are entitled to a salary or stipend when they reach a certain status: student, or adult, administrator. The people in command determine what you get, not a market.

The idea of a uniform basic income, no matter what you do of if you do anything, is clear collectivism/socialism. The political process yields consumption. Your production is irrelevent.

Now under Socialism people do have to produce, or else there is nothing to consume. That is the reason that under Socialism there are always shortages of everything. Production has to be coerced at force. Ultimately leading to the horrific death toll of socialistic regimes.

Did Big Business Suddenly Become Woke?

Big Business in America for the past 200 years kept its public face politically neutral. Big oil said put a tiger in your tank and that was just about the end of it.. Suddenly advertisements and actions practically proclaim they are on board with the progressive movement, lock, stock and barrel. Big tech bans orange man bad.

Did top management and the directors suddenly become woke? No. Anyone with some experience living in or studying autocratic governments can recognize what is going on. Big Business is trying not to be the first person to stop clapping after comrade Stalin finishes speaking. They are loudly demonstrating that they are on board with whatever the powers that be want them to be on board with, and no one on Earth is more enthusiastic than they. Why they can clap all night after everyone else goes home.

We have crossed the black hole event horizon where everything is sucked into the power gravity well of the US Government. The government has increased its power bit by bit every year since the Constitution was ratified. Now it is all powerful.

Scholars of such absolute authority know what the clapping monkeys do not yet. Clapping long and hard may not save you. Approved thoughts will become more and more extreme, people will jockey for power by denouncing other woke people, the most ruthless and the most murderous will rise to the top.

Do Corporations Run America?

I chuckle when I hear corporations run America

Very well meaning and smart people are always saying that corporations buy politicians and have too much influence on policy in America.

Well lets visit some of the most powerful corporations of the last decades and see what their influence got them.

There was IBM, so powerful the Antitrust Division of the Department of Justice, Southern District of NY spent years in litigation to stop the monster. No antitrust verdict ever came in, IBM wasted away as many corporations did when faced with new competitors. Do you fear IBM today? Many people did years ago.

Xerox was a power, Kodak was a power, GE was a power, US Steel was a power, General Motors was a power (does anyone fear GM today, or do we hope it will eek out existence long enough to pay our father’s retirement?), Bell Telephone was so powerful it was broken up into regional companies (wasted effort as the internet made it irrelevant and other companies took over its market), Exxon-Mobile was a great power, until it was no longer a great power.

But somehow their power was not sufficient to ensure their survival in the Dow Jones Industries.

The department of Indian Affairs still exists. The major universities still exist with the same institutions at the top that were at the top 200 years ago (Harvard, Yale, Princeton). But the corporation which run America somehow waste away to be replaced by new social media companies. Weird power they have that does not insure even their survival.


Headlines Blare: Trump Paid No Taxes for 11 Years.

I used to work for a law firm that was fairly high powered in tax. The firm will remain nameless but it gave tax advice to Sir Paul McCartney. I did no tax work for them. From what I hear, the firm found a way to make income from intellectual property, like rights to songs, nearly income tax free.

I conjecture that this became so popular and such an attractive idea that Apple, Google, Microsoft and others followed. Their intellectual property, like the rights to songs, could be placed in corporations domiciled in a country that did not tax royalties much. Then, as much of their income as possible would be paid as a royalty payment to their affiliate that owned the intellectual property. I think it involved Holland (called Double Dutch) or Ireland (there is a whole street of modern high tech offices in an otherwise bleary Dublin).

The whole point of this is that, if this story is true, I am in awe of President Trump’s tax lawyers. Real Estate is one of those fields where cash flow can deviate from taxable income because your property may be depreciating (loosing value) more than it is paying you in cash. On paper for taxes your are loosing money, but in reality tax depreciation is not “lost market value” of the property – it is just a fictional assumed loss. Your property could be worth more but the tax code allows you to depreciate a portion of what you paid.

A good tax advisor should minimize the taxes paid by their client. Millions of transactions every day are done because words in the tax code make the transactions advantageous. If you fund a 529 plan for your children’s education you are doing what my firm did for its clients. If you contribute to a 401(k) or other tax advantaged retirement plan, you are doing what my firm did for its clients. If you have a Health Savings Account, you are doing what my firm did for its clients.

AI is to Intelligence :: Instinct is to ???

I contend that Artificial Intelligence is not intelligence at all.  It is not thinking at all.  It is an algorithm that finds statistical correlations, a sort of mock inductive reasoning. AI is like inductive reasoning because inductive reasoning looks for correlations and then tries to devise a reason for the correlations. AI is one half of the way to inductive reasoning: it looks for correlations.
The reason I think AI is definitely not intelligence is because one could not even imagine AI performing the scientific method.  That is, one could not imagine an AI program detecting correlations in data, postulating a hypothesis that could explain the correlation, and then devising an experiment that would falsify or tend to confirm the hypothesis.
AI could predict that after x there will be y because it saw millions of instances of y following x, but it could not formulate a reason for y following x.  It is just not the nature of AI or what we ask it to do. It could not possibly predict any necessary consequence of y following x because of an abstract construct of concepts about x and y.

WuHan Shutdown

Lots of people are arguing online about the virus shutdowns. The pro say we need to keep the shutdowns to preserve lives, particularly the lives of older people and those with preexisting conditions.

The cons say the shutdowns will ruin the economy. They often summarize by saying: you have to work to get money and you need money to eat.

I think they are truncating their thought. We do not work for money. We work for what money gets us.

When we work we serve the needs and desires of other people. Whatever we produce on the job is wanted by other people. In exchange they give us a claim on their work or output. That is money. It is a claim on their production, because of our production.

In this virus the government has shut down lots of business, and in an attempt to keep things going on in a normal way has distributed “Stimulus” checks to nearly everyone.

But the fact is, those people shutdown and sheltering in place are not producing what they would otherwise produce. In fact they are not producing anything. You can give them dollars to have claims on what other people are producing but they are producing nothing. So pretty soon, there will be a shortage of the things we want and need, no matter what the government does with checks and deposits. Not much is being produced for us to consume.

So there will be less for us.

Classical America

In Classical America, I would say from 1800 to 1900, the average person had unprecedented freedom to do as he wished and make his own life. Even in my father’s time, say 1950, he could ignore Washington and its minions with no detriment to his life.

Ordinary people loved America and the elite hated America.

Obviously the “elite” did not like this arrangement. Ordinary people are inferior.  The elite called them racist to better discredit them. So the elite  worked tirelessly to reduce the freedoms of ordinary people and increase the power of themselves.

Who are the elite?  The members of Congress, teachers at colleges, executives and personalities at major media, newspaper people at the New York Times and Washington Post, people at NGO’s, high ranking FBI and CIA bureaucrats, movie stars, the leadership of many private corporations.

Not elite: rank and file military, union members, working stiffs, religious people, middle management, franchise owners, car dealer owners, small businessmen, service employees,  real estate agents, supermarket cashiers.

Freedom Implies Capitalism

If people are free, they must be able to voluntarily choose to do most of things that they do.

The human condition imposes all sorts of limitations on our freedom. No one is free to give up breathing, or consuming water. In fact, we are basically condemned to toil to live as we have many needs to survive.

Some leftist said that people are born free but everywhere in chains. If you think about it, you are not born free for at the moment of birth you need everything and are not able to provide yourself anything. You need food and water every few hours, shelter from the elements constantly, love, nurturing, stimulation.

It is more hones to say that people are born in chains (to their needs) and the challenge of life is to make themselves free.

Over time the amount of toil a man had to do to subsist has gone down due to technological progress and accumulation of “capital” which make people more productive. A man with an acre of land and his bare hands has to work longer each day to eat than a man with an acre of land, a horse and a plow. A man with the full modern set of farming tools could probably feed himself with half a days work or work all day and sell the surplus.

There is a totally different type of limitation on freedom. That is the actions of other people who seek to impose their will on you. That limitation on freedom can be reduced or increased depending on the type of society in which you live.



You want to live under a government that . . .

You want to live under a government that, if your worse enemy in the world was in charge if it, you would not be too terribly inconvenienced.

Think of the Constitutional framework of the United States in about 1900. Some asshole high in the government has a bug up his ass and wants to throw you [ unjustly ] in jail. There are few federal crimes and no federal police, but suppose this asshole is owed favors by various state authorities he sends federal money to.

He gets a state district attorney to convene a grand jury, presents evidence and indicts you. Guess what, you are entitled to a trial by jury of your peers. Twelve ordinary people from your neighborhood stand between you and the awesome power and money of the State.

They don’t teach it any more in colleges, but when the USA was half slave and half free, northern juries refused to vote to return escaped slaves to their owners. Jury nullification, it was called.

The right to trial by jury is a major firewall against the power of the state and connected people.

And honestly, the fact that powerful people always control the levers of power shows the wisdom of truncating the levers of power into tiny toothpicks.

That is American Exceptionalism. In stead of the powerful directing the lives of everyone not powerful it trusts ordinary people to direct their own lives .

The entire Constitution is designed to limit the awful power of the state which has a monopoly on the use of force. The Constitution is designed to limit the sphere of action determined by force and expand the sphere of action directed by agreement. reason and individual judgement.

Conflict of Interest

Fiduciaries and people in official positions who exercise discretion are held to certain standards.

Such people are required to avoid conflicts of interest.  A conflict of interests is when their personal interests might influence the discharge of their duties. The conflict might be that they have a relationship with a party, or they had an experience that might color their view.  No one should accept his wife’s father as the judge in his divorce.  A detective should not investigate the murderer of his son in a subsequent criminal matter.

It is not an issue of examining their decisions for bias, it is a matter of not placing them in the position of having a bias.  So all this talk of the FBI officials who clearly expressed a bias against Trump not proved to be influenced by their bias is  a side issue.  They should not be on this case if they are biased.

It is also a non-issue to say that they are entitled to political opinions.  Of course they are, but some opinions are disqualifying for investigating a politician you despise. Assign them to investigate someone else, just as you would assign a judge to preside over a case without his daughter as a party.