Archives for category: Money as goal

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


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…



Autumn of 2008.
The Bucharest Stock Exchange assembled a conference for the investors where some relatively junior guys working for the ‘Global Banking Establishment’ tried to uplift our mood by outlining their bosses’ envisioned reaction to the crises. Something which would later be known as  ‘quantitative easing’.
I asked one of them:
‘The current crises is the straight consequence of money having been used improperly. Are you sure that throwing a fresh amount of it on the market would make things any better?’.
‘Well, nobody has come yet with a better idea…’

Almost ten years later, it seems that ‘throwing fresh money at it’ did revive the market.
Dow Jones has climbed through the clouds, unemployment is low, inflation is low, interest rates are also low…

Some 120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010.“, according to the IMF.

Only the very same words could have been used to describe the 1990’s…

But there is something that at least some of us have noticed.


©Elliot Wave International (

Both major economic crises which have scarred us in less than a century have been closely predated by spikes in ‘income inequality’.

To make things worse, we are confronted by yet another fast moving development which pushes us towards uncharted waters.
Large scale replacement of ‘human capital’ by industrial robots, some of them driven by ‘artificial intelligence’.

Reaction has been mixed.

Some of the very rich have pledged to make available to charity important chunks of their estates while other ‘concerned parties’ promote  heavier involvement of the government – ‘guaranteed universal income’, etc., etc…
All these in the name of an illusive ‘equality’.

‘On the other side of the isle’, where inequality is seen as being not only natural but also harmless, people are happy with what’s going on and see no problem in everything continuing to march to the same beat.

I argued earlier that ‘heavy involvement of the government’ has already been experimented. And failed. Check the fate of every communist dictatorship.
Actually, check the fate of all dictatorships.
You’ll find that whenever a society becomes too centralized, that thing alone considerably diminishes its survival chances.
Same outcome whenever people in a group/community evaluate things using a single yardstick/from a single perspective.
To make things worse, the speed of the degenerative process becomes catastrophic when decision making becomes centralized while the reduced number of decision makers are partially blinded by too many of them using a single yardstick to do their job.

We are fast approaching that situation.

Extreme wealth polarization means that economic resources become concentrated in very few hands. Hence economic decision making.
And since policies cannot be put in place without resources…

The funny thing is that this concentration of power/decision making take place regardless of property remaining private or communism taking over.
As long as those who control the whole system are too few, ‘who owns it’ makes no difference.
Absolute monarchies faltered in the very same way as their communist successors.

It doesn’t matter whether an universal basic income would be supported by a tax exacting government or by a small coterie of ‘concerned investors’, sooner or later any such arrangement would become sour.

One other thing.
Claims for equality might become so deafening as to impede clear thinking.

Just as money is a very good tool/servant but a lousy goal/master, equality is a commendable goal but a lousy tool.
Human beings ‘work best’ as autonomous individuals who cooperate freely inside what has been described as ‘free market’.
Whenever that market was cornered, either from outside – by the government, or from inside – too many of the players acting in ‘concert’/sync because they had been ‘mesmerized’, remember the ‘Tulip mania” of yore? – it had faltered. Sometimes abysmally.
Attempting to fit everybody in a ‘one size fits all’ mould would be catastrophic.
Just as catastrophic as when less and less people can develop and express their true potential. Remember that we haven’t changed, biologically, during the last 50 000 years or so. But, generation after generation, we’ve been able to do more and more things simply because each generation made it easier for the next one. Most of the times, anyway.
Let’s not change this.



















I keep hearing about this issue and I can’t stop wondering about how parallel to each other are those defending this idea with those denying its merits.


-Robots are eating more and more jobs so more and more people will end up hungry.
-AI will make robots so productive that it will be far more efficient to use robots than human workers.
-A decent income is a human right.


-This is a socialist move, hence it will end up in failure – no other reason offered.

As it is obvious to all, both sides score big.

Yes, including ‘a decent income is a human right’ and ‘all socialist ideas end up in failure’.

Then what are they fighting each-other about?!?

Let me rephrase that.
WHY are they fighting, in the first place?

Because neither listen to what the other has to say… as simple as that…

Let me discuss some of the practicalities involved.

Robots eating up jobs and AI being able to continually increase financial efficiency are so evident that they do not deserve much consideration.

‘All socialist moves ended up in failure’.
We need to define socialism in order to make sense of this sentence.
Mainly because ‘socialism’ is one of the most abused words nowadays, on a par with liberalism. Sometimes they are even considered synonyms…
Well, ‘liberalism’ comes from liberty and  bona fide liberalism is concerned with individual freedom.
Socialism, on the other hand, comes from social. And is concerned with the the workings of the entire society.
The point being that there are two types of socialism. One which is ‘somewhat’ synonym with liberalism – the ‘reverse’ side of liberalism, actually, while the latter is the exact opposite.

I’m not making any sense?

Let me start from the other side.
All forms of socialism which have failed have been excessively centralized forms of government. And it was because of that excessive centralism that they had failed, not because of being ‘socialist’. The evident proof being that the same thing has happened with all right-wing dictatorships, which had used the very same excessively centralized decision making mechanism – the totalitarian government …

Which brings us back to the problem at hand.

For Universal Basic Income to work – or Guaranteed Basic Income, as some insist on calling it, it has to be financed.
Through taxes, right? Which means that those owning the robots would have to be somehow convinced to give up a huge proportion of their profits… Then why bother in the first place…? Why start any businesses, at all?
We’ll have the government run the whole show? Remember what history teaches us about centralized decision making?


Well, not all is lost while there’s still hope!

Let me rearrange the arguments.

We not only live in an inherently limited space, with inherently limited resources, but we’ve also finally started to understand our predicament. Which calls for as much efficiency as possible.
Only for a different kind of efficiency than that we’ve accustomed ourselves to.

Until recently, we’ve been trying to get as much money under our belts as possible. Without much regard for anything else.
That’s why we’ve been cutting down secular forests, feeding almost all the fish we’ve been pulling from the oceans to the domestic animals we were raising for their meat, polluting our breathing air, selling our fellow humans which happened to had a different skin color than ours into slavery… As if there was no tomorrow…

Slowly, we’ve started to realize that this won’t work for very much longer.

That no matter whether we’re responsible for the global warming – or if it’s real at all, sooner or later we’ll exhaust the planet.
OK, it is highly plausible that we’ll discover/learn to use new classes of resources.
But this eventuality doesn’t constitute, in any way, a valid reason for us to continue squandering the meager resources we have at our disposal.

Hence the need for increased efficiency.

Only this has to be a different kind of efficiency. The kind that focuses on minimizing waste instead of maximizing profits. The kind that recycles because it makes obvious sense, not because it is cheaper.

Along the same path we’ll discover that it would make a lot of sense to help the less developed nations to catch up with the most advanced ones.
For starters, because the ‘advanced economies’ no longer need cheap workers. They use robots instead.
Secondly, because better living people tend to have less children than those struggling to survive. And we’ve already agreed about the planet being rather limited…

Nothing too fancy… until now, right?

Well, the next item will be trickier..

Remember that Ford had raised dramatically the wages he paid to his workers?
With tremendous results?

OK, his reasons were not the ones, generally but erroneously, attributed to him.
He didn’t do it to ‘encourage’ his workers to buy cars from him… or because of philanthropy…

Actually, it was the turnover of his staff.

At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.”

But, whatever Ford’s reasons were, the long term results have been abundantly clear.
Nowadays people who build cars are being paid well enough to afford buying the same kind of cars they are building. At least in the advanced economies…

What happened was that Ford, in order to keep the assembly line going, paid his workers as much as he afforded to. With spectacular results.
While nowadays most employers tend to ‘compensate’ their employees with as little as possible. Which makes perfect economic sense… doesn’t it?

The same economic sense which used to drive us into “cutting down secular forests, feeding almost all the fish we’ve been able to pull from the oceans to the domestic animals we were raising for their meat, polluting our breathing air, selling our fellow humans which happened to had a different skin color than ours into slavery… As if there was no tomorrow…”

See what I mean?
Instead of attempting to mandate a ‘Guaranteed Basic Income’, calculated by the central government and financed through forcefully levied taxes, how about hiring as many people as it would make sense, let them work as little days per week as they want and pay them as much as we can afford to instead of programmatically replacing as many of them with robots and paying the remaining ones as little as we possibly can?

OK, some of us won’t get as rich, as fast, as our grand-fathers did… So what? None of us can eat even close to what our grand-fathers used to… and food is a lot cheaper, anyway…

This is would be a considerably shorter way to get more people out of poverty than any scheme concocted by any government and it would have the same snow-ball effect as Ford’s wage increase had.

Economists describe this as Rostow’s ‘take off effect’.


For attaining adequate finance for take off it is necessary that:

(a) The community’s surplus over consumption does not flow into the hands of those who will utilize it by hoarding, luxury consumption or low productivity investment out-lays;

(b) Institution for providing cheap and adequate working capital be developed;

(c) One or more sectors of the economy must grow rapidly and the entrepreneurs in these sectors must plough back a substantial portion of their profits to productive investment; and

(d) Foreign capital can profitably be utilized for building up social and economic overheads.”


Obviously, any attempt to instate a guaranteed basic income, (except for those too young, too old or otherwise un-able to pull their weight, of course) would grind any ‘take-off’ to a stand-still.

And no, getting people out of poverty is not a valid goal, per se.
Poverty is a relative thing, which relies more  on feelings than on hard reality.
The real problem with poverty is that it reduces the ability of poor individuals to lead meaningful lives. Poor people are a lot less autonomous than self sufficient ones, meaning that decision making ability is impaired by the fact that they need to focus their attention on the short term time span.

This whole thing has long term consequences on societal level.

Remember what I said about centrally planned socialist countries constantly failing.
About all dictatorships eventually crumbling under their own weight, because of too much decision power being concentrated in too few hands?

Excessive wealth polarization produces the same results. Economic decision becomes too concentrated, political decision follows through and…

What next?
The world has already experimented with communism. Didn’t work.
It also experienced two economic meltdowns, exactly when wealth polarization was at relative peaks.


When are we going to learn anything from what happens to us?
Why do we continue to waste the accumulated lessons collectively known as ‘history‘?


From a friend’s FB wall:

“African proverb:
Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve to death.

It doesn’t matter weather you are a lion or a gazelle.
When the sun comes up, you better start running.”

(from The World Is Flat, by Thomas L. Friedman)

It seems that the modern world is gradually becoming more and more ‘African’.
We’re so busy running ourselves out that we’re failing to remember the essential.

That we’re people.
Neither gazelle nor lion!
And that most of us have long ago left the jungle and now live in cities!

How about ‘taking five‘ from our incessant quest for trinkets and use the time to remember “togetherness”?
As in “communion”?

In the civilized world, ‘Dog eat dog’ was supposed to be an exception, not an everyday occurrence…

Ruthless acquisition or competition, as in With shrinking markets, it’s dog eat dog for every company in this field. This contradicts a Latin proverb which maintains that dog does not eat dog, first recorded in English in 1543. Nevertheless, by 1732 it was put as “Dogs are hard drove when they eat dogs” (Thomas Fuller, Gnomologia).”

After reading this, my son pointed out that lions are the only cats which hunt cooperatively on a constant basis.
Could this be the reason for which they are seen as the royals of the animal world?

“Between 1970 and 2010, the number of administrators in health care grew more than 3000%, while the number of physicians grew about 200%, according to the Bureau of Labor Statistics. During that same 40 years, U.S. health-care spending rose 2300%. Doctors’ fees account for only 8 cents of the health care dollar. Where do you think the other 92 cents are going?”  (Marni Jameson Carey, Focus on Health Coverage Misses the Point,, Oct 24, 2017)

A few years ago I was arguing that profit was overrated.
It seems that Forbes, a magazine which cannot be accused of any socialist tendencies, has reached a somewhat similar conclusion.

Even more interesting is the solution proposed by Forbes to the health care problem.

A return to the free market!

Free from what? Who says the American health care market is not free?
Well, click on the quote above and see what Forbes has to say about this…

But what happened? How did we get here?

Well, the free market described by Adam Smith was an environment where people used to fulfill their needs by selling their wares.
The butcher sold meat and bought everything else he needed, the brewer sold beer and bought everything else he needed, the baker… and so on!
OK, there  was a certain kind of competition which kept the things in check. The butchers competed against other butchers, the brewers…
And because of this competition, all traders – those who wanted to survive, anyway – streamlined their operations and became more and more efficient. Hence profitable.

I mentioned the link between the survival of a commercial enterprise and its ability to generate profit.
Apparently, it doesn’t make much sense to elaborate on this. Bear with me, please.

The whole point of the free market is the division of labor. Besides its freedom, of course.
Each of us does what he knows better and then we trade our respective wares. This way all of us fare better than if each of us would have had to produce everything each of us needs to survive.
In this scenario, competition – between ‘bakers’, for example – is actually a tool which makes it so that the market, as a whole, doesn’t waste resources. When the less efficient bakers are ‘encouraged’ to find something else to do, the entire market is better off. And so on.
In this sense, profit is only one indicator – and a very good one – of how able to survive is a certain commercial venture. But not the only goal of the entrepreneur who started/runs the enterprise. What he wants is to make an as good as possible living by doing what he knows best, in close collaboration with the other participants to the free market.

Adam Smith had written his books some two and a half centuries ago.
And the free market had served us well, for a while.
Just look at what we’ve accomplished in these two and a half centuries.

But, just as Forbes points out, things are no longer going in the right direction.


Simply because the market is no longer free!

Not only because some of the participants have become ‘heavy’ enough to crush all competition. This is only the lesser part of the problem.
The really big one, and so well hidden that it’s almost invisible, is that too many of us have become obsessed with the same thing. Money!


Profit has become THE absolute goal of everything we do. Too many of those who participate in the free market no longer want to collaborate with the others but simply want to get rich. By any (legal) means.

Some say this is a good thing.
They invoke Adam Smith’s words as a justification for their beliefs.

I beg to differ.

The simple existence of our current obsession has profoundly altered the very nature of the market. Which is no longer free.

Because WE are no longer free. When too many of us are obsessively concentrated on the same thing, they will necessarily disregard all other options. And the rest have no other option but to follow.

This is not freedom!

Mesmerized people can not be described, by outside observers, as being free.
Regardless of how they consider themselves.


“We are the last (semi) stable democracy on the planet without a universal health care system. Elsewhere in the world, health care is a utility taken for granted, like safe tap water or electricity. They pay for it, just like we pay for garbage service or highways, and it costs far less than our broken system. That is not an opinion. That is a reality easily revealed with a bit of travel. Like embattled cult members, we deny ourselves better policy outcomes to protect our deluded beliefs about the nature of markets and preserve our odd pathologies around race. That’s a choice we make…”

Chris Ladd,
Why Republicans Cannot Replace the ACA, Or Accomplish Anything Else,, Jul 20, 2017

ACA means “Affordable Care Act”.

‘Affordable’ for whom?

For those left out, of course…
And who was going to pay the difference?
Those already in, obviously…

See what I mean?

Health care can be seen in many ways.
As yet another opportunity for profit to be made – one of the best actually, since health is such a valuable commodity.
As a ‘social benefit’ extended by the society at large to (all?) its constituents. America already takes care of its elders, children and veterans, doesn’t it?
A combination of the first two. A free market where many independent health care providers cater for the needs of their customers – free to choose among the various providers – while the bills are picked up by a third party, financed through public contributions.

The only problem with the third option being our current obsession with money.
For as long as we’ll let ourselves be governed by the current mantra, “greed is good”, we’ll continue to perceive health care as nothing but yet another opportunity for some to get rich at the expense of everybody else.

How about an Efficient (Health) Care Act?
Opening the market – by allowing the patients to freely choose their doctors and by preventing  monopolies – would drive down the costs.
Cutting the middle-men – the insurance companies would no longer be needed since the public contributions would be collected by a public authority – would also help.

Would such a scheme work?
As I mentioned earlier, not before we give up ‘greed‘.
In order to trust yet another public authority with even more money we’d need at least some hope about that authority being populated by really honest people.
We’d also need many more ‘health care providers’ who actually love to help their patients – and make a decent living out of it – instead of so many people becoming involved with this ‘industry’ simply because it is among the very ‘rewarding’ ones.
And when I say ‘health care providers’, I mean all of them. Not only the doctors and the nurses – most of them do love their jobs and perform them almost heroically. (Some of/too many of) the Big and Small Pharma, (some of) the hospital ‘owners’, etc., etc….

Should we extend this scheme to other areas? Education, for instance? You bet!

Should we apply the same ‘weltanschauung’ to the rest of the economy?
Minus the ‘single payer principle’, of course?
Well, last time I read his work, Adam Smith was talking about “the Nature and Causes of the Wealth of Nations” and about “Moral Sentiments“, not about greedy individuals becoming filthy rich at the expense of their fellow human beings.

“In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely. The charity of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, and by purchase. With the money which one man gives him he purchases food. The old cloaths which another bestows upon him he exchanges for other old cloaths which suit him better, or for lodging, or for food, or for money, with which he can buy either food, cloaths, or lodging, as he has occasion.”


“America’s abundance was not created by public sacrifices to “the common good,” but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes. They did not starve the people to pay for America’s industrialization. They gave the people better jobs, higher wages, and cheaper goods with every new machine they invented, with every scientific discovery or technological advance—and thus the whole country was moving forward and profiting, not suffering, every step of the way.”

Ayn Rand

OK, she borrowed this idea from Adam Smith, without mentioning him… let bygones be bygones…

A more interesting endeavor would be to learn something from all this.

‘Abundance was not created by public sacrifices’.
Makes a lot of sense. In a free market everybody gets what they are offered, ideally in close accord to what each of them had brought to the market.

‘Abundance was created by the productive genius of free people who pursued their own personal interest and the making of their own private fortunes’.
Now, whose ‘productive genius’ are we speaking about here?

About Ford’s, for instance, or about that of his workers?

At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.

Tim Worstall, Forbes Magazine

Anyway you look at it, both Ford and his workers were acting as ‘rational economic agents’. Ford was paying them the going rates in the industry and they were putting in as little effort as they could afford to.

That went on until Ford came up with a ‘new idea’. “It can indeed be cheaper to pay workers more but to reduce the turnover of them and those associated training costs.” “The point is not so as to be paying a “decent wage” or anything of that sort: it is to be paying a higher wage than other employers. That gets your workforce thinking they’ve got a good deal (for the clear reason that they have got a good deal) and if the workers think they’ve got a good deal then they’re more likely to turn up on time, sober, and work diligently.”

Again, a very reasonable attitude displayed by both parties.
An attitude made possible by the fact that both the car and workforce markets were free.
Ford could hire anybody/sell his cars to whomever had enough money to buy them while his workers were free to leave their previous workplaces and accept Ford’s offer. Or leave him if they found a better one.

And let’s not forget the fact that Ford was not alone, at that time. At the turn of the XX-th century there were hundreds of automobile producers in the US alone and this was one of the reasons for which the workers could afford to be so ‘picky’ – specially those who had some experience.

In this situation – where the market was really free, each party taking good care of their own interest yielded excellent results.
Ford had became one of the leading car manufacturing corporations.
The diligent workers continuously improved their living standards.
The society, as a whole, prospered. And learned, or should have had, the long term benefits of commitment and mutual respect.

What happened after the market was no longer free?

Meaning that instead of hundreds of car manufacturers competing for the best available workers we had for a considerable number of years only three corporations more interested in short term profiteering rather than improving their products?
And instead of diligent workers striving to improve their skills we had union members more interested in their week-end barbecues?

“The U.S. government bailout of the auto industry lasted from January 2009 to December 2013. The Big Three automakers approached Congress in November 2008. They warned that, without the bailout, GM and Chrysler faced bankruptcy and the loss of one million jobs. Ford didn’t need the funds, since it had already cut costs. But it asked to be included so it wouldn’t suffer by competing with subsidized companies.

The Treasury Department invested $80.7 billion from the $700 billion authorized by EESA. It recouped all but $10.2 billion…”

Kimberly Amadeo,

Some of you might tell me that the Japanese car manufacturers operate along more or less the same guide-lines. ‘Cradle to grave’ employment for the workers, a rather opaque management never held accountable until too late…
A very correct observation.
Only there is a huge difference between the Japanese work-ethos and ‘the American Dream’. The Japanese have a long history of being told to ‘fit in’ while most Americans have gradually convinced themselves that ‘getting rich’ is the only possible solution for all their problems…

Considering that both Japan and America seem to have reached two different cul-de-sacs it wouldn’t be farfetched to suggest that both are doing something wrong.

For almost 30 years now Japan has been running in circles. She hasn’t completely lost her edge but hasn’t performed as it used to.
The most worrying indicator – for me, at least, being the fact that they have given up ‘making’ children. As if the present generation doesn’t have much hope for/expectations from the future.
For almost 30 years now the American people has allowed a huge trench to grow larger and larger in their mist. The haves on one side, the have-nots on the other and the rift so wide that they are no longer able hear each-other. A present day Henry Ford would have no idea about how much to pay his workers in order to obtain similar results to those achieved at the start of the XX-th century…

Is there a ‘common cause’ that might explain what’s going on on both sides of the Pacific?
How about both cultural and economic spaces experiencing a somewhat similar decrease in individual liberty, the phenomenon having rather different causes in each of the two cases?

First of all, ‘dedication to duty’ can take you only that far. It is very useful for those wishing to ‘close a gap’ but acts similarly to an ankle weight for those who are in the position to attempt to ‘take the lead’. ‘Dedication to duty’ focuses the attention of the team to ‘obeying the rules’ while ‘taking the lead’ means leaving the ‘straight and narrow’ and venturing into the unknown.
These two situations imply completely different mind frames.

Secondly, those who venture outside the ‘safety of the perimeter’ need to follow a simple rule.

“Leave no man behind”.

” “When you have a conscript army and you can always replenish it just by adding more people, you don’t really have to care about whether they’re happy with what they’re doing,” Springer said.

Now the military had to care about its soldiers as individuals, and the idea that it would never leave them behind became something of a familial bond.

“It’s kind of a contract with the service,” Springer said. “You promise to serve us, we promise not to leave you.” “


You see, time and time again history has hinted to us that freer societies fared better, ceteris paribus, compared to ‘tighter knit’ ones.
For example, subjected to the same communist knut, Poland came out differently than my native Romania.

And while most people agree about Poland being in a better shape than Romania, there is very little agreement about a possible explanation.
Just as most people agree about ‘liberty is good’ while each of those people derive different meanings from the very concept of freedom.

Since it is so hard to coordinate ourselves about the meaning of a ‘simple’ word, how about taking the liberty to ‘agree to disagree’ and turn our attention to another concept?

Mutual respect.

Just think about what liberty would mean without mutual respect.

Can you imagine the liberty of someone driving a M1 Abrams tank on a highway?
Can you imagine what would happen if the driver of the tank wouldn’t treat the others with utmost respect? What would happen if the outraged others would band together and wait for the ‘mad’ driver to burn through his last drop of fuel?

You see, people who have more respect for the rules than they have for each-other end up belonging to a society so tightly knit that it has immense troubles whenever it has to cope with unforeseen situations. Adapt to change.  Confront a catastrophe…
For example, the Soviet Union, Japan and the US have a considerable number of nuclear power plants and have experienced a number of failures. The tightly knit Soviet Union and Japan have displayed commendable individual acts of heroism in the aftermath of such incidents but it was the more individualistic US who has somehow ‘ducked’ any serious experience of this kind.

On the other hand, I see potential trouble when I hear people stating that “My right to swing my fist ends where your nose begins”.
On the face of it, this sounds perfectly reasonable.
Only the whole thing absolutely depends on both individuals involved in it having comparable reach. Do you really think that a guy with twice the ‘wing-span’ of his opponent would continue to stick to this rule if the by-standers would not band together to stuff it down his throat?

My point being that no ‘market’ is really free if its freedom relies primarily on a set of rules instead of depending on a healthy dose of sincerely upheld mutual respect among the participants to that market.
In this instance ‘free’ and ‘freedom’ are perfectly interchangeable with functional/sustainable.

The communist centrally planned economies had failed abysmally  simply because the powerfuls of the day had nothing but contempt for those under their rule.
Japan’s strict set of rules about what constitutes proper behavior in each situation seems to act as a brake whenever decisive action is needed.
America’s new mantra, ‘greed is good’, has time and time again produced speculative bubbles which have inevitably ended up badly. Under its spell, the market actually looses every shred of liberty. Exactly as a hypnotized group of people think of themselves as being free while sheepishly obeying the orders of their herder.
I gather you all know what ‘herd behavior’ means…

Compare Ayn Rand’s words to Adam’s Smith original idea.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

See what I mean?

Smith sees all ‘market goers’ as equals who freely address each other while Rand applauds “the productive genius of free men” who, in pursuit of “their own private fortunes” had the magnanimity to bestow upon “the people better jobs, higher wages, and cheaper goods with every new machine they invented, with every scientific discovery or technological advance”.

I, for one, fail to detect any shred of actual respect towards “the people” in the behavior so laudatory described by Rand.
And I’ll let you be the judge whether her description fits the current ‘state of the nation’.
Anywhere on the planet, not only in the US.

“and thus the whole country was moving forward and profiting, not suffering, every step of the way.”

jobless men keep going


Each of us tries to deliver themselves from the misery of this world.

We attempt that at the intersection of three realities.

The ‘hard’, the ‘virtual’ and the ‘socially constructed’.

The ‘hard’ one is what Marx called ‘the objective reality’. Whatever exists outside our individual minds. Whatever doesn’t need any confirmation from any of us.
For instance, a rock can very well lay on the bottom of the sea without any conscious agent being aware of its existence. No one might ever become aware of its existence but that actually doesn’t matter. Same thing goes for a man made piece of furniture. The original craftsman might die, the owner also,  and the ‘thing’ might be forgotten in a warehouse – or attic – without its existence, ‘in the hard reality’, being jeopardized in any way.

The ‘virtual’ one is whatever each of us makes of what happens around them. It consists of three, separate yet interdependent, ‘ingredients’. The ‘perceived’ realities, the ‘intended’ realities and the ‘engines’ that make all of them possible – our conscious selves.
I’m speaking of ‘realities’ because each of us is different from all others – hence ‘sees’ slightly differently from all others, cannot inhabit the same place in space – hence ‘sees’ the world from a slightly different perspective, doesn’t have the same goals – hence entertains different intentions.

The ‘socially constructed one’ comprises the aggregate consequences of our efforts. Intended and unintended. Known to us and unknown by us.  Belonging both to the physical and metaphysical realms. As in both the Egyptian pyramids and language being parts of the socially constructed reality.

Please note that the first and third ones are ‘objective’ in Marx’s terms while the second in purely subjective.
It is also worth noting that the ‘hard’ reality is not immune to our efforts and that the ‘socially constructed one’ becomes ‘harder’ with the passage of time. The pyramids dotting the banks of the Nile constitute a very good example of our ability to change the ‘hard’ reality while the Catholic Church – one institution among many – is a good example of a metaphysical construct resilient enough to survive for two millennia.

Another very interesting ‘social construction’ is the concept of liberty.

I find it very interesting because it is simultaneously ‘objective’ and ‘subjective’, ‘natural’ as well as ‘man-made’.
It is objective in the sense that it continues to exist no matter how many individuals subject themselves to abject spiritual slavery.
It is subjective in the sense that each of us understands freedom in their own way.
It is ‘man made’ in the sense that we have coined the concept and minted the words used to describe it.
Yet it is ‘natural’ since we all are made of flesh and blood and need to breath in order to stay alive. And yes, it is us who have invented the dog-collar and the leash we use to restrain the liberty of our dogs. Exactly because it is natural for them to try to be as free as possible.

Since this is but a blog post I’ll fast forward to what I had in mind for today.

The free market.

Which is, evidently, a socially constructed institution.
Supposedly, a place which miraculously transforms “private vices” into “publick benefits“.

Well, I’m afraid that those who have convinced themselves that ‘greed is good’ have understood nothing of Bernard Mandeville’s stark warning.

A market may be fueled by ‘greed’, or even by (evil)’vices’, but it is the freedom of those who partake in that market which keeps everything in check.

The communist centrally planned economies were also fueled by individual lust for power. They failed simply because no small group of people is smart enough to master such complicated matters nor humble enough to see/accept its limitations.

The very same lack of freedom has produced the financial crises of 2008.

‘Greed is good’ is nothing but a rationalization of the current obsession with monetary rewards over the very shortest time frame coupled with a blatant disregard for the longer term consequences of our actions.

And as any drug addict can confirm – whenever they are not ‘feeling high’, entertaining any obsession means loosing one’s freedom.

In reality, actually free markets are fueled by trust, not by greed.
And (self)governed by the fact that each participant is free to define/pursue its own interest and react to anything that is happening inside the market’.
Unfortunately, current markets are no longer free. Not that much because of governmental intervention but mainly because too many of the participants are blindly chasing the same narrowly defined ‘interest’.

“But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

Smith’s words could not have been any clearer. Each of the participants to the free market wants something different from the market and each of the participants trusts the others to provide those different somethings – as long as the buyers can satisfy the sellers, of course. Nobody gets robbed while everybody gets whatever specific things they had come for.
In modern terms this would have been described as an ‘everybody wins’ situation.

Compare this with the contemporary mantra.
‘Profit maximization’.
Everybody chasing the proverbial ‘fast buck’
‘Enjoy the moment’ & ‘forget about tomorrow’.

And we continue to kid ourselves about the ‘freedom’ of our markets…

Even funnier is how we have twisted Mandeville’s warning to fit our own narrative.

“Millions endeavouring to supply
Each other’s Lust and Vanity …
Thus every Part was full of Vice,
Yet the whole Mass a Paradise …
The bees, however, are not satisfied to have their viciousness mixed with their prosperity. All the cheats and hypocrites declaim about the state of their country’s morals and pray the gods for honesty. This raises the indignation of Jove, who unexpectedly grants the hive its wish.
BUT, Oh ye Gods! What Consternation,
How vast and sudden was th’ Alteration!
As Pride and Luxury decrease,
So by degrees they leave the Seas.
All Arts and Crafts neglected lie;
Content, the Bane of Industry,
Makes ’em admire their homely Store,
And neither seek nor covet more.

In this way, through the loss of their vices, the hive at the same time lost all its greatness.

Now comes the moral:
THEN leave Complaints: Fools only strive
To make a Great an Honest Hive.
T’ enjoy the World’s Conveniencies,
Be fam’d in War, yet live in Ease,
Without great Vices, is a vain
Eutopia seated in the Brain.

Fraud, Luxury and Pride must live,
While we the Benefits receive. …
So Vice is beneficial found,
When it’s by Justice lopt and bound;
Nay, where the People would be great,
As necessary to the State,
As Hunger is to make ’em eat.

Apparently, Mandeville’s verses do not make much sense.
Why would a hive which had successfully purged itself off all vices find itself in a far worse situation after the cleansing?

Let’s first try to understand what those vices were.

Millions endeavouring to supply
Each other’s Lust and Vanity …
Thus every Part was full of Vice

Let me remind you of the fact that Mandeville had lived, and written, during the same period when the Puritans were trying to impose their strict moral code on the rest of the British society. And for the Puritans any attempt, made by ‘millions’, to supply ‘each other’s lust and vanity’ (a.k.a. various personal needs and fancies) was ‘vicious’ in itself.

The point of the whole thing being that it was not the absence of vices which had brought down the hive but the obtuse single-mindedness with which the vices had been banned. A line of thought very much the same with Durkheim’s ‘normality of crime‘.

And not very much different from our current obsession with (short time) profit!



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