Thursday, September 30, 2010

Natural Aristocracy

So this is an idea that is not fully developed, but I'm just exploring it a little. Most people take the book Outliers to be an argument for equalizing opportunities. They want to give the huge environmental advantages successful people need in the early stages of their life to everyone in order to help them. However, as an economist, I know that it is necessary to divert resources to do this (true, there may be some technological advantage in the mere knowledge of compounding advantages itself, but ultimately the opportunities are going to come down to a reallocation of resources). However, it may not make sense to do this. Thanks to the law of association (comparative advantage) we know that it is to our advantage ceteris paribus for our neighbor to be as successful as possible (I hold jealousy and envy to be philosophically misguided, hence discounting those as possible exceptions). Naturally we would want to leverage the benefits of concentrated resources as much as possible for the socially optimal outcome. A few geniuses might well outweigh a great amount of moderately successful people. Thus the most efficient social outcome might very well be a huge concentration of wealth and opportunities among a few people. Should it be done using force? No. But letting people leverage the advantages that they do have should take priority over equalizing advantages. Letting those who have demonstrated the best judgement in how to use resources distribute them is also a good idea. The need to equalize opportunity has led to a lot of static and dull conformity in our society (look at the school system), whereas a system that's more privatized would likely be much more dynamic and diverse.

Thursday, September 23, 2010

Recent Economic Thought (The Beauty of Teamwork)

So this is a blog post that serves as a record of an excellent conversation I just had with Alex. We discussed the odd fact that in the so called "empirical" sciences, a priori reasoning is accepted as completely valid and thought experiments are a legitimate form of inquiry, as in the case of Einstein's relativity. The entire enlightenment was largely based off of a priori reasoning because there were simply no liberal states to empirically justify the ideas off of. That does not make the ideas any less legitimate. True, all thought experiments appear to be necessarily inspired by reality, and this could be the basis of Rothbard's Neo-Aristotelean view (although I really think we need to do more research into what exactly a Neo-Aristotelean view entails as opposed to Mises' Neo-Kantian epistemological framework). We also fleshed out what seems to be a very powerful theory for interpreting modern economic thought that I will be testing out on the new books I have to read. We know economic history fairly well up until the point of the Keynesian Revolution, then the econometricians came in largely building off of the Neoclassical Synthesis assumptions of how an economic system works. After this, the Chicago School came onto the scene, but the Chicago school was basically just the current system given some theoretically superficial (at least from an economics perspective) free market logic and fervor (possibly because of Hayek's inability at the University of Chicago to convince Friedman and the others of the validity of the mental frameworks necessary to comprehend deep Austrian theory... without that they could only go so far, and it would explain why their system appears so eclectic). Although the good thing about the Chicago school is that it paved the way socially for the free market views of the Austrians... there is little acceptance of a purely Keynesian theory, although the defenses against it must always be maintained. The main challenge to the school now is the methodological debate, because that is the block that seems to keep the Chicago people from comprehending the Austrian theory at the level of depth necessary to truly have really productive intellectual discussions. Our combined research over the last few weeks is proving to be enormously productive.

Thursday, September 16, 2010

Tough Love

My ideas about compassion might seem at first glance to be something counterintuitive, and indeed they may be. Yet, at the same time we all know a good example of when compassion needs to be overridden in the light of reason. Take the case of a child throwing a temper tantrum in the grocery store. Clearly he wants something badly (even if it's just attention) and is in a pretty severe state of emotional suffering over the lack of it. However, as any good psychologist will tell you, the correct response is to ignore the temper tantrum and resist giving him what he wants. Doing otherwise will only reinforce the behavior, and that will not help him grow up into a more adult pattern of negotiating and acting to fulfill his wants. This is a simple example of reason over-riding compassion in everyday life.

A more complex example involves many people and pain that is more severe and long lasting. I encounter dilemmas of this nature all the time when discussing economic theory. Most people have very strong feelings of compassion for the poor. Indeed, it is overwhelmingly difficult not to. Particularly when specific cases of poverty are presented, where through no fault of their own people are put in enormously difficult situations. Naturally, we as human beings want to help these people. However, the solutions usually given, while they would often help the people currently being empathized with, hurt society much more than the benefit to those people. Furthermore, fallacies of composition are often committed. A strategy that would be sustainable for one impoverished working mother (say, giving her 90,000 dollars) would wreck loads of destruction on the economic system if enacted for EVERY impoverished working mother.

Compassion can bias the debate. Time and time again the people who are most compassionate about the people they are trying to help make the worst mistakes in economic reasoning. Furthermore, they will often intellectually agree to an error, but then proceed on their current course of action as if they have not learned anything from the argument. It doesn't stick. Compassion that covers all the parties involved helps. If you have compassion and understanding for the capitalist as well as the worker it is much easier to construct sound economic policy. Thus, calls for broad compassion make more sense than some might think.

Thursday, September 2, 2010

Why?

It seems to me most appropriate to discuss what this blog is and why you should spend your time reading it as my first post. While I have no fears about blogging about anything that I find important or interesting, my special areas of interest and expertise are Economics, Transhumanism, Rationality, Science, and Philosophy. I am ultimately trying to create the best world possible, and I take that very seriously. That means a very careful examination of what "good" is as well as analysis of how to actualize that good. I am a huge believer in the power of dialectic discussion, and I will change my ideas on a dime if I can be proven wrong. I love people who disagree, because it is out of discussions with them that the most can be learned. So that's what this blog is really about --throwing around ideas, discovering new ones, challenging everything, and in the process hopefully contributing a little to the growth of all the people involved and therefore the advancement of humanity itself. I look forward to it.