Archives for category: Money as goal

“Capitalism has generated massive wealth for some, but it’s devastated the planet and has failed to improve human well-being at scale.”

Drew Hansen, Unless It Changes, Capitalism Will Starve Humanity by 2050,
Forbes, feb. 9, 2016.

I’m afraid we are dealing with a huge confusion.
Capitalism hasn’t generated anything and hasn’t starved, nor fed, anybody.
People did!

Capitalism is nothing more, nor less, than a particular manner in which we, ‘the people’, relate to property while ‘the free market’ is one of the manners in which economies are run.

And here’s the place where things become ‘murky’.

‘Oekonomia’ is Greek for ‘making ends meet’.

“The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

According therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion.

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776

The way I read it, Smith sees ‘wealth’ as people’s/nation’s ability to supply for their ‘necessaries and conveniencies’.
In other words, ‘to make ends meet’.

How we define our needs, the manner in which we choose to fulfill them and what we are disposed to ‘spend’ in the process… is our responsibility.

So.
What is it that we need/want?
A healthy planet? Clean air/water/soil and a fair opportunity for each of us to earn their keep?

Or a dog eats dog type of contest for ‘who has the biggest pile of money’?

Capitalism can encompass both.

Unfortunately, the second scenario has nothing to do with ‘making ends meet’.
On the contrary!

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I’m not going to educate you about what fractals are.
The internet is full of information, go find it. If you care, of course.

I’ll just remind you of an old saying,
‘There’s nothing new under the sun.’

As if nature doesn’t exert itself.
If something works… why invent anything new when you can adapt something which already exists?

In this sense, I somehow must admit that those who believe is God do have a point about this. Sometimes Nature seems to have been fine tuned by an engineer…

Or that engineers have learned a lot from Mother Nature?

Enough with this back slapping between the engineer in me and … whoever is at the other end of this game.

1. The ‘revolving’ principle.

Basically all matter turns around a center, is circled about or finds itself in both situations at the same time.
From the electrons which turn around the nuclei of the atoms to our Sun which spins around the center of the Milky Way.

Behind this principle lies another one.

2. The dynamic equilibrium.

Everything which exists is in a state of dynamic equilibrium.
Both internal and external.
Its components relate to each-other in such a manner as to keep that thing together while the surrounding medium exerts various influences towards that thing.
From the meager proton – whose quarks ‘cooperate’ to constitute a distinct individuality and somehow manage to remain ‘apart’ from the rest of ‘world’ despite the huge forces which keep each atomic nucleus together, to, say, a living organism – which remains alive for only as long as it conserves its ability to interact, both ways, with the environment.

I can probably identify a few more but today I’m going to mention only one more.

N. Killing your host might not be such a good idea.

Remember the fable about the Scorpion and the Frog?

‘Now you really got my attention! How on Earth are you going to spin this into your tale about fractals?!?’

When syphilis first appeared in Europe in 1495, it was an acute and extremely unpleasant disease. After only a few years it was less severe than it once was, and it changed over the next 50 years into a milder, chronic disease. The severe early symptoms may have been the result of the disease being introduced into a new host population without any resistance mechanisms, but the change in virulence is most likely to have happened because of selection favouring milder strains of the pathogen. The symptoms of the virulent early disease were both debilitating and obvious to potential sexual partners of the infected, and strains that caused less obvious or painful symptoms would have enjoyed a higher transmission rate.”

Robert J. Knell, Syphillis in Renaissance Europe…, 2004

Want some more?
How many people have you seen last winter wiping their noses? How many of them actually had the flu and how many suffered from having a benign ‘cold’.
You must have surely got my drift by now… flu kills many more people than the cold. And Ebola kills far many than the flu. And that’s why the cold viruses have far more chances of finding a host than both flu and Ebola.
On one hand, the more deadly a virus is, the less hosts are left for the next generations of viruses.
And on the other hand, the more dangerous a virus – or any other ‘parasite’, is, the more those in peril will try to do something about it.

N+1. If you can’t beat them, join them.

Now that I’ve mentioned parasites, let’s take a step further and talk about symbiosis.

“Mitochondria are rod-shaped organelles that can be considered the power generators of the cell, converting oxygen and nutrients into adenosine triphosphate (ATP). ATP is the chemical energy “currency” of the cell that powers the cell’s metabolic activities. This process is called aerobic respiration and is the reason animals breathe oxygen. Without mitochondria (singular, mitochondrion), higher animals would likely not exist because their cells would only be able to obtain energy from anaerobic respiration (in the absence of oxygen), a process much less efficient than aerobic respiration. In fact, mitochondria enable cells to produce 15 times more ATP than they could otherwise, and complex animals, like humans, need large amounts of energy in order to survive.”
The mitochondrion is different from most other organelles because it has its own circular DNA (similar to the DNA of prokaryotes) and reproduces independently of the cell in which it is found; an apparent case of endosymbiosis. Scientists hypothesize that millions of years ago small, free-living prokaryotes were engulfed, but not consumed, by larger prokaryotes, perhaps because they were able to resist the digestive enzymes of the host organism. The two organisms developed a symbiotic relationship over time, the larger organism providing the smaller with ample nutrients and the smaller organism providing ATP molecules to the larger one. Eventually, according to this view, the larger organism developed into the eukaryotic cell and the smaller organism into the mitochondrion.

Another interesting case of symbiosis is that between each of us and the flora which populates our guts and helps us to digest our ‘daily bread’.

Now, do you remember my post about viruses?
Where I mentioned that viruses are organisms which somehow penetrate into their hosts, take over the management mechanisms of said hosts and ‘convince’ them to actually manufacture the next generation of ‘invaders’.
Killing the host cell in the process, but not necessarily the whole host organism.

This being the difference between the common cold, influenza and Ebola viruses.
On one hand.

On the other hand, there’s the difference between a parasite and a symbiont.
A parasite always being a ‘nuisance’ – from the innocuous common cold to the deadly Ebola, while all symbionts bring along quite lot of added value.

‘OK, and where’s the fractal side of all this?’

How many of the politicians you know behave as parasites and how many as symbionts?
Relative to the rest of the society, of course.
How many of the business people you know behave as parasites and how many as symbionts?
How many of the working age people you know….

And do you remember about the dynamic equilibrium which is essential for survival?
Of everything? Including human societies?
Which need ‘division of labour’ and ‘free market’ in order to thrive?

Basically, ‘doing business’ means obtaining sustenance by being useful to other people.
As opposed to hunting/picking/growing your own food, building your own shelter and using pelts to cover your back.

‘Doing business’ obviously implies trading. Raw materials are being transformed to fit the needs of the intended customers, transported to where they are needed and offered to those who might buy them.

For this process to take place, ‘business’ needs far more than entrepreneurs, customers raw material and workforce.

It needs a suitable environment.

It needs roads, markets – not only ‘stable’ but also safe, and – maybe the most important thing, it needs the right kind of ‘popular sentiment’.
For business to work as intended, people need to have faith in each-other.

Yep, faith!

Who would eat in a restaurant without trusting that the cook hadn’t spit in the soup?
Who would buy a car to drive their children to school without actually believing that the car had been built as it should have been?
Who would even drive on a two way road without believing that the drivers going in the opposite direction will stay on their side of the road?

And do you really think that German farmers of yore – who had enjoyed a relative safety while working their own land, living at the bosom of an extended family and being personally acquainted with all the members of the community,  would have gladly come to the ‘unknown’ city to become industrial workers  during Bismark’s ‘reign’ without the ‘safety net’ extended by the Chancellor?

Taxes are the manner in which we pay for all these.
But they are much more than this.
The willingness of the people to pay taxes means that they have faith that the money will be well spent. That they have faith that those in charge will spend the money wisely and that, in the end, those in charge will be held accountable.

Whenever any of the parties involved in this deal – or both at the same time, no longer trusts the other to do its part of the deal – or tries to use their position to access undue benefits… things go south. Way south.

Just as it happens in any other deal.

What do we want?

Money.

When do we want it?

Now.

How do we get it?

By being efficient.
‘Give as little as you possibly can while taking as much as you can possibly grab.’

And who’s going to get the job done?

Huh?!?

Capisci?

Let’s take it one step at a time.

A guy hires a woman. A ‘working girl’, to be precise.

After a while, an attorney pays a hefty sum to the working girl and has her sign a confidentiality contract.

When asked about the whole thing, the guy first said that he didn’t know much about anything and then that he had reimbursed the hush money to the attorney.

The attorney apparently gets a lot of money from somebody else. Which somebody else might be, now or become in in the future, in a conflict of interests with the organization presently run by the guy who had once hired a working girl.

It becomes apparent that the attorney is a confidante of this guy. Or, in plain English, that this attorney takes care of the dirty laundry that ‘happens’ around this guy.

It also becomes apparent that this attorney is not satisfied with the amount of money he gets from this guy. That this guy is not his only client. And that this attorney is not very particular when accepting other clients.

What am I to understand from all this?

This guy is cheap?
This attorney is very greedy?
This guy is not very particular when choosing who takes care of his dirty laundry?

two sided coin

So, Japan and Germany have huge trade surpluses. Despite their workers being the best paid in the whole world. In both absolute and relative terms. Among the major economies, anyway.
Meanwhile, the US has a humongous trade deficit. Yet the American CEO-s are ‘compensated’ as if they were the best in the world…

Interesting, right?

More ideas about the same subject here:

Why is Japan Economy (surplus of over $100 Billion) a considered Weak Economy? & Why is USA Economy (deficit of over $400 Billion) Strong Economy?

 

Apparently, modern civilization ‘is all about the money’.

Fundamentally, it’s still about trust.

Drivers trust their follow drivers that each will stay on their side of the road, stop at the red light and yield at the famous yellow triangle.

yield

 

Each of us trusts that the elevators we use daily won’t fall under their own weight, that our daily bread contains exclusively what’s mentioned on the label and that tap water has been adequately filtered before being pumped into our homes through proper pipes.

We trust, and follow their advice, ‘higher authorities’. Science people, teachers, government ‘agents’…

Modern ‘consumers’ order a lot of stuff online, food included. From people they’ve never met, trusting they’ll get what they’ve read about in an add they never asked for.

We keep a lot of data online. Mails, tweets, pictures, more or less intimate thoughts shared on our FB walls. That’s the ‘free’ part. We also pay increasingly handsome amounts of money to ‘upload’ for safekeeping ‘in the cloud’ a lot of sensitive commercial and personal data.

Where ‘apparently’ meets ‘fundamentally’, in our individual/personal lives, we are flabbergasted when cars become weapons and are used to kill innocent bystanders. Our friends and relatives.

When manufacturers implement planned obsolescence, artificially increase nicotine contents in cigarettes and replace sugar with corn syrup in ‘soft drinks’.
When piped water is dirty and the authorities shrug their shoulders.
When we discover that animal fat is not as bad for us as we’ve been told for the last 50 years or so. When we realize that our children are saddled with huge debts simply because they wanted a good education. When we realize that some of the people involved with ‘government’ become part of the problem instead of part of the solution.

When our personal data becomes a merchandise.
Traded to be transformed into a manipulative tool.
Used to influence us into buying certain things.
Used to influence us into making certain political decisions.

Trust will, probably, survive for a while.
But I fear the day when too many people will have lost it.

Price tag

 

 

Survival of the fittest“.

Evolution is not about survival of the fittest but about the demise of those unable to adapt. Even if the difference seems trivial this approach has vast consequences. As Ernst Mayr explains it What evolution is, (Basic Books, New York, 2002) one can never know what “best” may mean, in any situation. First of all because (Werner Heisenberg, Herbert Simon, Dan Ariely) you can never have a complete picture of anything and secondly because in the real world ‘situations’ are changing constantly – Panta Rhei.
So the only relevant test is survival, being able to cope with whatever comes along and not the brilliance with which one might be able to solve a very particular problem, at a particular moment in time.

Division of labor

After understanding ‘survival’, it’s a lot easier to figure why social strategy functions better than sheer individualism: by creating the right environment for its members to become specialists a complex team will cope better when confronted with  different complex situations than a mob composed of identically qualified members.
With the caveat that this arrangement works only as long as every member of the team realizes that it’s better for him to belong than to get out and only as long as all the members of the said team act consistently as if ‘one for all and all for one’. Otherwise put, complex teams where each has it’s own more or less indispensable role work properly only as long as most of the members continue to be ‘socially intelligent‘.

For those who feel there is an apparent contradiction here please note there are two levels of analysis/interaction.
Individually, each of us has to take care of him/herself (and his/hers immediate family).
Socially, each of us has the duty to evaluate the other members of the group and to exchange information with them about the well being of the whole group.

This can be taken even further. Whenever a subgroup becomes too ‘specialized’ –  as is in ‘becoming so preoccupied with it’s own well being as to stop caring about the rest’, its own survival is in danger. Time and time again, history shows us that those who become estranged from the rest of the society end up badly. Creating problems for the entire society, true, but ultimately their behavior amounts to a form of suicide. Callous royals end up on the chopping block, seemingly indestructible dictators end up at the hands of angry mobs… Erstwhile top of the feeding chain (too big to fail?!?) companies end up broke or bailed out by the government…

Politics versus Economics

I’m constantly amazed by the fact that politics and economy have grown so apart from each other and each of them so disconnected from reality.
Politics has become a constant struggle for administrative power while economy has ‘metastasized’ into a battle field where the foot soldiers struggle to survive while the big brass  gorge themselves with ‘money’.

Nowadays, too many politicians have forgotten that their job is to figure out, in close cooperation with the rest of the society, how to solve the various problems which  challenge us on a daily basis. Too many of them do nothing but fight among themselves, each of them attempting to impose their particular vision on all of us.
In the same time, the economic mechanism is no longer geared towards ‘making the ends meet’ – the original meaning of the Greek word oikonomia.
Our not so distanced ancestors have invented a self governing mechanism which very efficiently allocated the available resources to those who were able to put them to good use. Adam Smith described this mechanism as ‘the free market’.
Presently, we’ve corrupted this previously self leveling mechanism into a collective MMA arena where the heavier knock the wind out of the weaker in the name of ‘king profit’.

All this because we mistakenly believe free market capitalism to be an ideology when it is nothing but a mechanism for allocating resources.
The best to date, admittedly, but only as long as we’re wise enough to preserve the freedom of the market.
And as soon as we’ve mistakenly ‘anointed’ profit as the most important goal of any economic venture… the market had ceased to be free!  You see, profit is the best measure for efficiency – which, in its turn, is the best indicator for economic survivability, yet efficiency itself is pointless if the needs of the market are not met. Smith’s famous characters – the baker, the brewer and the butcher, went to the market to meet the needs of their customers. They became comfortably well off because they were successful in meeting those needs in an efficient manner, not because they were successful in cornering the market… as some of the present day tycoons are teaching us

Why do I maintain that a ‘profit obsessed’ market is no longer free?
Well, simply because the participants to such a market are just as free as those addicted to heroin. Both kind of addicts think of nothing but the object of their addiction and are oblivious to everything else. As in blind to everything else!
And I’m sure you all agree with me that being blind is detrimental to being able to stay alive. Specially so for those unaware of their blindness!
Or unaware of their addiction…

 

We are constantly being told that we’re living in the best possible world.

I agree with that.
Of course it’s the best possible one… specially since there’s no other!

On this side of the Styx, anyway…

Let’s get real now.

This is the Century when we’ve managed to open up all corners of our round Planet. We’ve ‘conquered’ the most remote and inhospitable places – both poles, all mountain tops and most of the ocean floor, including that beneath the Arctic Ice Sheet, and, way more important, made most of the Earth solid surface accessible for almost everybody. By car, by train, by plane, by bike, by ferry …
We’ve managed to populate all the ‘cubicles’ designed by Mendeleev and we found uses for most of them.
We’ve managed to identify a vast array of natural resources. We’ve developed matching technologies to exploit each of them, to transform and combine them into what we thought it would fit our fancies and to distribute the results to whomever wished to receive them.
We’ve continued to develop already invented means of communication and we transformed them into something totally different. Practically, we’ve restored the world to it’s ‘Golden Age’. We now live in the Global Village.

Which is not that much different from the old one…

Now, with the world watching Aleppo burn, Daraya fall, and Idlib and other Syrian cities suffer so brutally, Pope Francis’s description of Syria as “abandoned and beloved” rings chillingly accurate. After Bosnia, I was sure the international community would never again stand by and watch in silence as hundreds of thousands of people were bombed relentlessly, starved, beaten, traumatized, and denied the most basic human rights, including education and medical facilities. During the height of the worst years in Sarajevo, from 1992 to 1994, you could chart the ebb and flow of the city’s hope, like the steady flow of the Mijacka River, whose shelled bridges we had to run across to avoid getting hit by snipers. Food supplies ran out; soldiers were getting slaughtered on the fronts; the hospitals’ generators went down.

Janine Di Giovanni, From Sarajevo to Aleppo, Lessons on Surviving a Siege,
The Atlantic, October 12, 2016

What happened with “only a fool learns from his own mistakes, the wise man learns from the mistakes of others“?

OK, back to square one…

1918 had seen the end of the First World War.
Which was the first ‘mixed’ war and the one which should have been the last…

‘The last’ part is obvious, let me elaborate on ‘the first mixed’ one.

Basically, people are both lazy and easily frightened. Their natural tendency is to ‘give in’, a.k.a. ‘trade in’ rather than ‘fight for it’ ‘to the ultimate consequence’.
Which actually makes a lot of sense. Just imagine what would have happened if we were just a tad more combative than we used to…

Need a clue? Click on the picture below.

sex bonobos chimps

Welcome back.

The proposition “Laziness and congeniality is our default mode (mood?)” is valid but from a ‘statistical point of view’.
On a ‘case by case approach’, the manner in which each of us reacts in specific circumstances depends both on those circumstances and on our own interpretation of what’s going on. In fact, it’s our individual consciousness which makes things even more complicated than the situation described in the video above.

During most of our history, human social arrangements have closely resembled those of the chimpanzees. Alpha males have somehow managed to climb to the top of the food chain while the ‘laziness’ of the rest kicked in and allowed the alpha males to do more or less what they pleased.
Which had included a lot of unwarranted aggression.

Up to WWI, most wars had been started by aggressive rulers who had somehow convinced their followers to attack one or more of the neighbors. Which neighbors were also organized more or less like a chimpanzee troupe – ‘lazy and congenial people’ ruled by which ever alpha male was aggressive/cunning enough to remain in power.
These social arrangements had a very interesting consequence.
All conflict was between rulers and all wars were ‘turf wars’.
The belligerents were not attempting to out-kill each-other but to establish hierarchies. More prosaically, war was nothing but ‘protection racket’. The loser had to pay a certain amount of money to the winner – ‘war reparations’, surrender a piece of the ‘turf’ or both at the same time.

In time – due to particular circumstances, some of what are currently known as ‘nations’ have learned that ‘chimpanzee social order’ leads to unnecessary suffering and have (re)invented an alternative. A.k.a. democracy.

WW1 was the first major war which pitted authoritarian regimes against democratic ones.
Yes, humankind had already witnessed some wars which had been started by more or less democratically run countries – the British Empire had attacked the Boer Republics in South Africa, for example, only this is but a blog post, not a 500 page dissertation…
Unfortunately, the democracies which had won the WWI had behaved totally inappropriately… with dire consequences. For them, as well as for the rest of the world.

The Treaty of Versailles imposed a huge amount of war reparations upon the main loser. Germany.
Two consequences have arisen from here.

The obvious one was WWII. And almost nobody disputes this.
The less obvious one was that those war reparations had transformed war itself.

A democratically run coalition imposing war reparations upon a defeated and leaderless/dispirited population had transformed war from a dispute between rulers into a dispute between nations.

This was the ‘accelerant’ used by Hitler to start the second funeral pyre which had engulfed Europe…

Democratically run nations behaving inconsiderately towards other nations also established an immensely dangerous precedent.

The first example of which had occurred less than 20 years later in Spain.

 

Remember Midas, the character who, after being granted a wish by a grateful Dionysus, “asked that everything he touched would turn into gold“?
And who was happy as a pig in mud after his wish was fulfilled … only to find out that he was going to die of hunger since everything he touched did turn into gold? Including his beloved daughter who had enthusiastically embraced her father upon his return from the fateful meeting with Dionysus?

Under the Violent Crime Control and Law Enforcement Act of 1994, the “Three Strikes” statute provides for mandatory life imprisonment if a convicted felon: (1) has been convicted in federal court of a “serious violent felony”; and (2) has two or more previous convictions in federal or state courts, at least one of which is a “serious violent felony” (the other offense may be a serious drug offense). The sentencing enhancements in this law can have a significant impact on a criminal defendant.

Now wait a minute! What has this got to do with anything?

Well, more than two and a half millennia after Midas had driven himself into a tight corner we continue to ignore his lesson. As a species…

And the key words here are ‘continue to’.

The axe.

Very soon after our flint knapping ancestors discovered that a shaped stone is very useful at chopping wood they tied it to a shaft and started bashing the heads of their neighbors with it.

stone axe

‘Corrupting’ tools into offensive weapons, strike one.

 

Articulated language.

Soon after learning to fight our fellow humans, we started to speak to each-other.
It might have started while hunters tried to coordinate their efforts or when strangers tried to barter things… Does it really matter?
For me, it’s enough that very soon after we learned to speak we were masters in the art of lying.

internet lies lincoln

Corrupting words into lies, strike two

Money.

At some point in our more recent history, we discovered that it was easier for each of us to learn a particular skill and to exchange goods among rather than each of us providing for all his (family’s) needs. Eventually we invented money and replaced barter with proper trading.
Soon after, some of us forgot that money was meant to facilitate trade and started to hoard it.

follow the money

Elevating money to stardom against all historical advice, strike three.

 

Are you wondering whether I’ve lost it entirely?
Neah… just came home from the movies…

All the money in the world

Since the movie ended on the bright(-ish) side, I’m going to remind you that Midas also found a way out of his predicament.
The ‘golden’ King begged Dionysus to lift the cursed blessing bestowed upon his head, was instructed to wash his hands and everything else he wanted turned back to its original state in the Pactolus River – in present day Turkey, and presto, everything was fine again.

There’s only one small problem left.
Where are we going to wash our hands…. or should we cleanse our minds first?

Hopefully, before experiencing the hunger pangs which had driven Midas to wisdom…

 

 

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