Restoring the Caliphate is an imperial project

Words have meaning. It seems perfectly obvious to me that the Caliph leads the Caliphate and that the caliphate is the multi-national collection of islamic states. In general terms, the Caliph is an emperor, which makes restoring the caliphate an imperial project, and radical islam, which wants to restore the caliphate, an imperialist venture.

Then the world turns upside down.

The putatively anti-imperialist forces in the west on the left tend to be the softest when it comes to radical islam. Bill Maher has made left wing softness on radical islam a major theme of his career. But even Maher doesn't look at radical islam in terms of empire. For him, his opposition is part and parcel of his deep commitment to atheism. To him radical Islam is just religion on steroids.

Finding anti-imperial critiques of radical islam arising from the left is tough going. This provides an opportunity to call out the left and for a new left to arise that is authentically anti-imperialist no matter where imperialism arises.

Making Picketty's R > G work for the poor

Thomas Piketty's Capital in the 21st Century tells us that the rate of return for capital exceeds the rate of economic growth. Putting aside the many problems of the book, this, in itself, is not very controversial. It's an expected result when you have a shortage of capital compared to the labor prepared to use it. But it is a result that can be reversed by increasing the available capital pool.

Bitcoin and the rest of the alt-coin world are an opportunity to do this. A bitcoin might be $380 today but the smallest unit is the satoshi, a fraction equal to 1/100,000,000th of that. People will pay tens or hundreds of satoshis just to get you to look at an ad for a few seconds. With some applied effort at a public library, it's possible to get perhaps 40k satoshi in a day (not easy but possible) in this way so even if you're in a jobs wasteland with no employment prospects, this option is still available for you. Those satoshi are loanable funds over at BTCJam and other P2P lending sites but unlikely to trigger the first world welfare state's various poverty traps that keep the poor down. Returns are advertised at just under 20% for a doubling time of three and three quarters years.

In short, you have a road out of poverty that doesn't require any action on the part of the government other than the willingness not to investigate the blockchain so closely that we enter the unjust world of Javert. This is possible because it's so cheap to move bitcoins around that even the poor in the US can be part time capitalists. They have the money.

Is anyone telling them this?

Judas in University Administration

It started this morning (as it often does) with Instapundit's item on bogus sexual assault numbers which pointed to Mark Perry's analysis that the rate of sexual assault (1 in 5 during university) combined with the rate of reporting (12%) didn't work. It isn't even politics, but just poor math that means at least one of those two White House numbers are wrong.

This was shortly followed by a piece examining the left's creeping totalitarianism on due process. What caught my attention is the phrase that Harvard could withstand the loss of federal funds while they fought for due process. It occurs to me that the amount of federal funds at risk, the endowment of the university, the male population being betrayed by university administration is all public information. You could make a judas index to measure how much money your rights are worth betraying.

There could be an app for that. It would be pretty useful when it comes time to pick schools.

In favor of a sustainable living wage

Right now we're living through a time of massive imbalance in the global labor market. The number of people who are available for work outsourced from around the globe has exploded and continues to grow larger. This is happening because poor economic policies are in retreat in the developing world and pro-globalization policy adoption remains high, continually feeding more and more people from India, China, and smaller developing nations into the global labor market as they walk down the path of converting their farmer/peasant heavy populations to first world levels. This massive imbalance has created a market signal reducing salaries below living wage levels at the bottom end of the labor market. Until that signal resolves in increased demand for labor, it leaves more people stuck in dead-end rural situations, urban workforces constantly in emergency mode, trying to scrape by, and lower standards of living for virtually everybody who is a worker all over the world.

There is a way to create a living wage consistent with free market principles. I call it the sustainable living wage. It's based on the idea that increasing the demand for labor and reducing the supply of labor both cause a natural rise in wages that need not be artificially mandated by legislation, and is not subject to evasion by paying people a lower wage "under the table". In a sustainable living wage environment, workers have better things to do than play black market games with skinflint employers. Down the road, somebody else is paying better.

A living wage based on forcing, by law, employers to raise wages beyond the market clearing price will, over time, always lead to substituting capital for labor and other methods of getting around the law such as falsely reporting working time and hiring "under the table". It also promotes acceptance of inflation in the employing class as that erodes the economic penalty of minimum wages. Inflation is probably the worst economic blow that an otherwise normal government can strike against the poor while calculating that it won't get called out for it.

A sustainable living wage, in order to be sustainable, must not create these perverse labor substitution incentives for employers which is what too often happens with traditional efforts to raise a minimum wage to a living wage. In the real world either the rise is so small as to be ineffective at its stated goals or it prompts employers to take a look at substituting capital for labor. When this substitution effect happens, a minimum wage practically acts as an indirect legal subsidy for machinery manufacturers, throwing more work their way and tossing lower end workers out of a job. These indirect subsidies are social injustice writ large.

The other side of the coin is reducing the supply of labor. This is about increasing the supply of people who make some or all their money as capitalists. It also implies moving from a small number of very wealthy investors to a large number of relatively well off people as the capital source for businesses. It means taking some money and succeeding in actively investing it for a profit to the point where it can substitute for some of your labor income, allowing you to shift from full time membership in the laboring class to being a part time capitalist, part time worker and eventually full time capitalist.

Necessarily, this also means reducing labor force participation in a good way. Economic prognosticators are going to need a better metric to not only capture whether labor force participation is changing but why it is changing. The person that reduces their hours from full to part time because they're making up the difference and more in loan interest they're lending out to others right now looks the same as the person that has their hours reduced by their employer because they want to avoid costly benefit obligations. That's a very small chunk of the labor force right now in the upper middle class. It will grow in the future.

What is Bitcoin?

Bitcoin is not what you think it is.  This is the sort of thing that comes out when you listen to Bitcoin insiders who actually build the software that makes Bitcoin a thing.

Everyone in this room understands that Bitcoin is not a currency. It is a value transfer network with a decentralized consensus mechanism. 

Translating from techno-geek to poli-geek, Bitcoin makes voluntary polities. In plain english it allows people to congregate into one or more novel, voluntary associations, entering and exiting them at will.

The point of doing that is to establish convenient states of "we" as in we dollar spenders, we mastercard holders, and even we believers in this or that social habit or norm. This is incredibly valuable. It allows participants to exchange value within an enhanced trust set of rules. In the real world, this is a more granular edition of what european countries faced when they looked at joining the euro zone. A number of countries for whom joining was economically a bad idea did it anyway because they saw advantage in adopting a shared identity. Greek euro bonds suddenly sold at nearly the same low interest rates as German euro bonds. The market priced nation state bonds by the identity, and the repayment risk, of the most trustworthy of the big euro economies for years. It took the admission of a massive violation of trust and the rules of the euro (Greece's accounting fraud scandal) before national bond pricing was restored.

In this view, nation-states create a massive bundle of shared values, and a number of them are expressed through the currency. Bitcoin as software allows anyone to express shared values, sometimes economic, sometimes as expressions of solidarity. The politics of which shared values will be expressed is independent of the software. It pretty much can be anything.

Virtuous Capitalists

Are entrepreneurs virtuous? Here's an excellent (if long) video that lays out the issues.

The short version is that yes, entrepreneurs are virtuous when they profit from creating value, new products, services, as well as converging prices through arbitrage. Entrepreneurs are not virtuous when they rent seek, creating a legal system that forces people to give them money (or more money) based on a political decision influenced by lobbyists.

The weakness is that you can make good money by rent seeking in a debased political system that permits it. Any firm focused on creating value can add to its accounting profits by adding lobbyists to rent seek on behalf of the firm. This means that they are vulnerable to hostile takeover. The vulnerability to vicious rent seekers is only repaired by healing the political system so the rent seeking is denied in the political process.

White Advantage

It appears that whites don't care when other whites have friendships and support networks with blacks. This allows whites to have broader support networks without undermining their in-group solidarity. Blacks apparently behave differently, imposing a penalty on their racial fellows for having friends outside their race. An indifference to racial solidarity and discipline is an economic advantage.

The abstract doesn't cover why this broad racial advantage for whites exists and what happens when you throw asians in the mix.

From a political standpoint, Democrats identifying the GOP as the "white people's party" may be tapping into this racial discipline effect in ways that have not been studied up to this point. It would be interesting to see if there's a liberal/conservative divide in the racial solidarity dropoff of having white liberal vs white conservative friends.

Agency Problems Should be Killing Incumbents

This video is entitled the Second Industrial Revolution but I want to pick out a specific point made in the 2nd half.

Incumbents are caught with a particularly nasty agency problem. The ground is sliding out from under them. The leadership sees what needs to be done to fix it, but the necessary corrective is hazardous to their yearly bonus for a number of years. So they know that there's a problem but they do not behave as if the problem were real out of either conscious or unconscious decisions made in their personal self-interest.

The whole video's worth a watch.

Grading Goalposts

Prof. Munger doesn't want 4.0 GPA grad students on the grounds that a 4.0 indicates someone unwilling to step outside their comfort zones. It's an interesting heuristic for acceptance into a graduate program. Unless you're fiendishly clever and spot this blog post, most people would never figure out that they're supposed to take risks and fall short of perfection in order to open this particular door in academia.

Is that right? Is that fair? Does fair even count? Is it appropriate to have goals that we don't normally let people know that we have. I think that in certain circumstances, this sort of hidden goal setting is the only way to select for certain traits, independence of spirit for example.

Capitalism is not perfect

I'm a great fan of free markets. I am not blind to their flaws, however. They are not magic machines that eliminate cruelty. They take the existing society's morality and amplify the impulses. If you want uplift, capitalism will give it to you efficiently. If you want depravity, capitalism will do the same. If you want theft and violence, well, capitalism will sell you as much of that that the law will allow, even as these two products eat away at the foundations of the capitalist system.

Efficiency, effectiveness, capitalism is fit for purpose as an economy and does very well at that job. Combined with a good moral code and an honest political culture it's as good as it gets for setting up a society. But in no way, shape, or form is it perfect, or in and of itself complete.

Conservative Pop Culture

It's kind of nice to see conservative culture that's sweet and smart and not preachy. I hit a random link and found that last night in a webcomic, Love and Capes. Starting from the beginning is worth the time investment.

A-B testing is hitting the popular culture

Scott Adams wrote about A/B testing back in January with a really neat idea for a book company. I guess Dogbert reads Scott's blog because now he's gotten a hold of it and is abusing the concept in his usual dogbert style. 

Science: Right or Wrong

Does science prove theories or laws correct? Or does science simply say that a theory hasn't yet been proven wrong? These sound like very esoteric questions but it's the difference between scientism and science, respectively.

Science attempts to guess at the laws of the universe, computes the implications and consequences of the guess and compares them to experience or experiment. If they don't match, the theory is wrong. If further experiment reveals gaps, the theory is incomplete and thus wrong. Incomplete theories can still be useful. We use newtonian style calculations to this day even though we know that those theories are wrong. They are close enough to reality for a wide range of use cases that they still work, just as long as the limits to their usefulness are kept in mind.

Science is utterly useless as a religious system. For that scientism is a far superior option but scientism has no credibility and no usefulness except when it camouflages itself as science. Scientism says stop thinking, stop examining, stop studying settled issues. They are the corpus of established science, the bible which should not be questioned. When preachers rail against science, it is this that they are protesting by and large. But scientists should be just as dubious about scientism as the preachers. Scientism is not science. It is a kind of philosophical cuckoo's egg, a fraud pretending to be science and bringing actual science into disrepute, causing confusion as to what science actually is.

Discrimination at the CFPB

I loathe disparate impact theory but the CFPB loves it. The idea that people can be unconsciously discriminating, something that only shows up as a difference in results even though the process leading to the results was scrupulously fair is a favorite in those quarters.

Now the worm has turned and CFPB been bitten by disparate impact. A March 6 investigative report in American Banker uncovered the fact that whites were twice as likely to be rated highly as minorities in employee reviews. No employees would speak on the record for fear of retaliation. Four days later CFPB scrapped their employee rating system. Sudden changes like this to employee rating systems invariably tank morale as everybody looks with suspicion at their next pay raise rate and wonders whether their paycheck is a victim of political correctness.

Those Darn Crowdfunding Kids

I have a soft spot for "get off my lawn" curmudgeon journalism and +Lara Krupicka delivers my fix today with her chiding today's crowdfunders as too narcissistic. In classic grump mode she's enthusiastic about group patronage of the arts so long as it fits her criteria of what is seemly. It's a classic way to try to climb into other people's pockets and guilt them into spending their own money as the author thinks they should.

Driving Out California Oil

California used to host a number of conventional energy companies. They were a core industry that helped make California the vibrant economy that led the nation. They still have Chevron but everybody else seems to have decamped.

The reasons are varied. The culture shifted decisively against petroleum and that's manifested in a number of ways to make oil executives feel unwanted, ostracized, and hated. The business climate is making everybody take a look at departing from California and plenty of other states with a rich oil tradition are more than happy to facilitate a move to their own oil centers. There doesn't seem to be any particular reason to fight to stay in California and a growing number of reasons not to.

Emergent Anti-Communism

There is something I like to call ideological anti-communism, the philosophical idea that communism is profoundly wrong as an ideology. It's got a long and relatively successful pedigree but it hasn't been able to win the day and fully kill off an idea that has objectively caused untold human suffering and give or take 100 million people peacetime dead.

I'm an ideological anti-communist. That means that I'm convinced that the heart of the socialist/communist economic system is fundamentally wrong and will never be made to work.

But I've given up on beating communism by convincing everybody to follow along that ideological path. The number of people who are indifferent to politics and economics is simply too great and every time things are working well, the ranks of the indifferent swell, creating a fertile breeding ground for piecemeal fabian style socialism to stage a comeback. The actual level of popular oversight in first world states is pretty low. By raising it and routinizing it, what comes out of that non-ideological process is what I am calling emergent anti-communism. It's a function of not giving socialist solutions a pass and actually measuring their effects and calling them out when they fail. Functionally, that makes government oversight anti-communist, but only if it's actually done.

Humiliating the poor

How we currently humiliate the poor in one graph

A single mother earning $29,000 makes more by staying at that income level until she hits $57,327. Any level of productivity in between loses her money and so she's financially better off if she works less and maintains that lower income. This is humiliating for her as she can't grow in skills and gain independence unless she sacrifices her children's welfare. That's a bind that nobody ought to be put into.

HT: ZeroHedge

How Science Dies

Tim Worstall has had enough of contradictory scientific diet advice. I have too. It's a curious fact that people have been misled by bad advice over food and drink intake by the same crowd for decades and for the vast majority of us, this record of bad advice and objectively bad results in the diabetes and obesity epidemics has little effect on our willingness to listen to the next pronouncement from the science crowd over what we should eat and drink.

I don't think that scientists should cease to operate in these areas. I just think that they ought to be a great deal more humble when they are flipping back and forth through the years and decades. But no, confident statements that we should drink no wine are followed by equally confident statements that it's good for you. A more humble approach would allow for diversity of opinion and far weaker guidelines. Past a certain point, people stop listening, stop believing, and stop following scientific advice.

Scientists are squandering their credibility. It really is quite sad and we'll all be the poorer for it.

My son's throwing a party

14 years old and my son's throwing a party on a minecraft server. I didn't even know parties were a thing on minecraft. Google's not much help as I'm seeing a lot of links on how to make creeper cupcakes and other real world artifacts for minecraft themed parties. Apparently minecraft birthday parties are a big deal in 2014. Who knew?

Pulling real world party elements into minecraft gets a lot fewer hits on Google but it's out there.

I'm pretty sure that my son's party will be different than this but the whole thing seems so bizarre. This is not the dystopian future all the cool kids were predicting 20 years ago.