The obvious vs. the oblivious

I am an admitted economic idiot, which is probably part of my fascination with marketeers -- I can't help feeling that they must be privy to some secret knowledge that I can't quite grasp. But, despite that, I apparently am a more astute economist than Alan Greenspan:

Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to recognize early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy.

In an interview, Greenspan said he was aware of "subprime" lending practices where homebuyers got very low initial rates only to see them jacked up later, causing severe payment shock. But he said he didn't initially realize the harm they could do.

It's too bad I wasn't running the Fed for the last six years, or some randomly chosed grocery clerk or waitress, since anybody with half a brain could have figured out that something like this would happen.

Shock the Monkey

Having just started covering the free-market-torturer beat, I was nonplussed to find that Naomi Klein has beaten me to the punch with a book and movie:



I have to say that I really hated the above movie. It's composed of equal parts self-righteousness and cheap emotional appeals, and drowns whatever valid things it is trying to say in questionable sludge. It's this sort of thing that has driven Mencius Moldbug to the dark side.

But it did remind me that Milton Friedman, hero of freedom-lovers everywhere, was hand-in-glove with the Chilean torture regime. So this peculiar association between "freedom" and authoritarianism is not a new story by any means.

[update: Oddly, marketeer Tyler Cowen likes the book while despising its contents..."Yes there is a senseless conflation of torture, Iraq, and the Coase Theorem." Sounds like I may have to read it after all.]

Libertarian miscellany

Much funnier people than I make fun of "glibertarian" Megan McArdle and Professor Instaputz.

And I rather belatedly learn that just about every center of respectable libertarian thought (Cato, Reason, GMU, etc) is heavily funded by the Koch Family Foundations. If not for the smiling beneficence of David and Charles Koch, libertarianism would be still be confined to the rantings of cheeto-dust-encrusted Ayn Rand fanboys. Here's some more. There's remarkably little written material on these guys that doesn't smell of conspiracy theorist, but the conspiracy theorists may have it right this time. Essentially, everything you read from the more respectable libertarians at the above institutions should be labeled "bought and paid for by the oil and gas industries".

Update: And Atlas Shrugged gets featured prominently on the latest episode of Mad Men. Yes, I know Ayn Rand didn't consider herself a libertarian and hated those who were so identified -- it's all the People's Front of Judea to me.

An-arrgh-chy

As Talk Like a Pirate Day approaches, let's remember that pirates are the original ontological anarchists:

An-arrgh-chy: The Law and Economics of Pirate Organization
Peter T. Leeson, Department of Economics, West Virginia University

This paper investigates the internal governance institutions of violent criminal enterprise by examining the law, economics, and organization of pirates. To sectively organize their banditry, pirates required mechanisms to prevent internal predation, minimize crew conflict, and maximize piratical profit. I argue that pirates devised two institutions for this purpose. First, I analyze the system of piratical checks and balances that crews used to constrain captain predation. Second, I examine how pirates used democratic constitutions to minimize contact and create piratical law and order. Remarkably, pirates adopted both of these institutions before the United States or England. Pirate governance created sufficient order and cooperation to make pirates one of the most sophisticated and successful criminal organizations in history.

This is the kind of political economy I can get behind. From the conclusion

Second, the institutions that comprised the pirates' system of governance -- democratic checks, the separation of power, and constitutions -- are remarkably similar to those governments employ to constrain ruler predation in the legitimate world. Government does not have a monopoly on these institutions of governance any more than it has a monopoly on the ability to generate cooperation and order...organized criminals are as interested in creating order among themselves as non- criminals. They, too, have an incentive to develop solutions to obstacles that otherwise prevent them from cooperating for mutual gain. The fact that their cooperation is directed at someone els's loss does not alter this. Thus, while Captain Charles Johnson described the pirates' criminal organization as "that abominable Society," it is important to acknowledge that, however abominable, it was nevertheless a society (Johnson 1726-1728: 114).

Some anarchists/libertarians get stuck on the idea that governments are nothing more than very successful criminal gangs. There is some truth in that, but not that much. Governments dont simply deploy force, they deploy force in ways that are legitimated by various rationales in a way that makes them more or less grudgingly accepted by their citizens/subjects. A good government is one that has tamed its criminality by means of law, institutions, and cultural norms -- but this is never a complete process, as the expanding criminality of the US government demonstrates all too well.

This study comes at this issue from the opposite end, showing that not only are governments criminal gangs, but criminal gangs are governments -- and they too can occupy a spectrum of good and bad, where good means roughly that they successfully implement rules that lead to greater levels of prductive cooperation.

The naive anarchist gets the idea that governments == violence and opposes government. The post-anarchist realizes that violence and coercion are part of reality, and you have a choice of unruly, random, chaotic violence; or violence constrained by productive institutions.

Dalai Lama rocks

Stephen Jay Gould's NOMA approach to the science/religion war has been roundly derided for believing that the truce he was trying to broker -- letting science lay claim to all objective truth, with religion relegated to matters of morality and subjectivity -- would be acceptable to the religious side of the conflict. After all, most religions make some claim to be describing reality, to be more than a set of myths and rituals.

Anyway, NOMA has finally found a religious leader with the right attitude -- the Dalai Lama, who has said:

If science proves some belief of Buddhism wrong, then Buddhism will have to change. In my view, science and Buddhism share a search for the truth and for understanding reality. By learning from science about aspects of reality where its understanding may be more advanced, I believe that Buddhism enriches its own world view....

Yes indeed, here's a man who understands that religion needs to play yin to science's yang. Contrast this with popular frauds like Deepak Chopra who has been making an ass of himself attacking Richard Dawkins based on the lamest arguments imaginable.

BTW I once actually met the Dalai Lama while wandering around Cambridge...he petted the standard poodle I was walking. The dog has since passed on and I am fairly certain this helped her reincarnate as a higher lifeform.

Programming as Labor

On Labor Day, it's time to reflect about the nature of technical work. It can be enormous fun, or complete sucky. It can be enormously lucrative, or lead to abysmal unemployment. Technical workers can easily be exploited by management. Dilbert-like working conditions abound. Older workers can easily be shoved aside in favor of younger workers who can be paid less and work longer hours. The globalization of work and the relative ease of outsourcing work has the technical world in a race to the bottom. Open source is a great boon for the world but it drives down programmer salaries, and the net economic effects are that programmers around the world are subsidizing big companies with free labor. Software becomes a winner-take-all industry, which is great for the winners, but not so great for the also-rans, which is inevitably going to be most of us.

That's the downside, which very rarely gets talked about. The upside of course is that technology is in fact an extremely dynamic and productive industry, with a great variety of opportunities, etc. But technology cheerleading is so prevalent and tedious, that perhaps its time to take a look at the human downside of all those wonders. Today's a day for thinking about the 50-year old laid-off software developer who can't get hired, or those who have to pay California mortgages while competing with Indian salaries, or those with medical conditions that prevent them from working or getting insured, or other victims of life vicissitudes. There is so much lionization and hero worship in the technology industry, and so little attention paid to ordinary workers.

Stock options, the dream of starting your own company, and transitions to management all serve to keep the workforce from achieving the sort of class consciousness that would permit them to organize on their own behalf. Programmers think of themselves as independent-minded, and oftebn have been infected with libertarianism. They are probably the last occupation on earth that could be unionized. Like the children of Lake Woebegon, they all think they are above average and are going to come out on top in the winner-take-all competition, and don't have much patience with those who aren't winning the race.

Here are a few (very lame) efforts at getting programmers to organize on their own behalf:

Programmers-Union: a chat site that seems dead. Here are some typical reactions from libertarianish programmers.

Cyberlodge. Sponsored by a real union, the IAMAW. Tagline: "Fight Offshoring". They actually seem to have a tiny bit of a clue, but the site hasn't been updated since April.

Programmer's Guild: somewhat more alive, this is also function mainly as to lobby for increased protectionism of domestic jobs. "The Programmers Guild advances the interests of U.S. technical and professional workers in information technology (IT) fields, and opposes the transfer of U.S. jobs, technology, and infrastructure overseas." Here they are exposing a sleazy law firm giving advice to company HR departments on how to game H1-B regulations by place fake classified ads. That's a valuable sort of interest-group advocacy work, although a long way from collective bargaining.

Update: here's another one, The Washington Alliance of Technology Workers, Communications Workers of America, Local 37083, AFL-CIO. This is the realest-looking one so far. h/t Wall Street Journal!

Would a programmer's union be a good thing, even if it was capable of getting off the ground? Probably not, at least not one that operated in the classical model. The tech industry is too distributed, entrepeneurial, and irregular to make such a thing workable. But that doesn't mean that tech workers can't start finding some common interests to organize around. Geeks are very effective when their interests are threatened, as organizations like the EFF, GNU, and Creative Commons show. But none of these address bread-and-butter economic issues, perhaps because geek culture is too young to have had to worry much about them. That will change.

[photo h/t: Happening Here]
[update: actual discussion of unions and the modern world happening here. I liked this comment:

the oft heard argument that "[name of multinational] moved its factories to China and Mexico. Therefore it is necessary to abandon unions" makes as much sense as "I had a lousy the Big Mac the other day. It is time to do away with restaurants."

]

The unmentionable odour of death

Are we really going to attack Iran? I honestly have no idea. It's manifestly insane, but that hasn't stopped the Bush administration in the past. There have been false alarms about this in the past. In the meantime, this:

September 1, 1939
by W. H. Auden

I sit in one of the dives
On Fifty-second Street
Uncertain and afraid
As the clever hopes expire
Of a low dishonest decade:
Waves of anger and fear
Circulate over the bright
And darkened lands of the earth,
Obsessing our private lives;
The unmentionable odour of death
Offends the September night.

That's the first lines of the signature poem of our time. Composed on the eve of Hitler's invasion of Poland, it also resonated eerily with 9/11, and the matches just keep on coming, for instance, I just noticed that the closing lines seems to describe the internet:

Defenceless under the night
Our world in stupor lies;
Yet, dotted everywhere,
Ironic points of light
Flash out wherever the Just
Exchange their messages:
May I, composed like them
Of Eros and of dust,
Beleaguered by the same
Negation and despair,
Show an affirming flame.