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Incentives in markets vs politics

People tend to become better at doing the thing they are rewarded for doing. Entrepreneurs are good at turning money into products, politicians are good at getting votes, bureaucrats are good at increasing their budgets and influence, and welfare recipients are good at becoming more needy.

In markets with well-defined property rights, there is a tendency for explicit and actual motivations to match.  For example, Apple, BMW, or Wal-Mart want to make stuff I want because they are rewarded to the extent that they make stuff I want.

In politics, the trend is reversed.   Incentives in politics are often the opposite of political promises or goals.

For example, politicians and bureaucrats may honestly want to fix poverty, pollution, corruption, and terrorism, but they are more often rewarded for making all these things worse.

The worse the problem becomes in the voters mind, the larger the politician’s power and scope for action.

The more efficient a democracy, the more it tends to reward those who re-direct resources away from problem-solving activity and toward towards vote-generating activity. In an inefficient or indirect democracy, someone who is a good problem solver can win though the support of a minority that directly rewards success.  In a popular democracy, the ability to get votes will tend to triumph over the ability to achieve campaign promises.

The intentions of politicians and voters are mostly irrelevant – whether they are good or evil, the outcome depends only on what kind of behavior is incentivized. Studies show that most voters are altruistic, not selfish — and this is very destructive. Selfish voters tend to vote based on their own evidence and reward problem solving. Altruistic voters tend to vote based on campaign platforms, have no empirical basis to evaluate a candidate’s proposals, and no incentive to follow up on outcomes.

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The Future of Bitcoin

This is not a prediction, but one plausible timeline out of the many I can imagine:

  • Late 2013: The media reports that organized crime, tax evaders, and “terrorists” are using Bitcoin.
  • Early 2014: Politicians call for investigation of claims that Bitcoin is being used to facilitate illegal activities. The rhetoric is ratcheted up over the course of the year.
  • Late 2014: Bitcoin transactions have grown exponentially for several years. The world’s established financial institutions cannot compete with the lower costs of unregulated financial markets and pressure governments to act.
  • 2015: Western governments raid and shut down all the major BitCoin exchangers and effectively kill the currency. Operators are put away for lengthy sentences, while others are found to have cooperated with authorities for some time.
  • 2020’s: Bitcoin (or something very much like it) revives on a small scale as an underground currency and slowly grows over the next two decades.
  • 2020-2030: The US empire collapses. The EU has already fallen.
    China tries, but fails to replace the dollar as the world’s reserve currency. People hoard gold, but governments prevent it from being effectively used as money.
  • 2030’s: 3D printing takes off. Established industries attack unlicensed home printing as a violation of their IP. The major non-affiliated (“pirate”) pattern markets are blocked from handling financial transactions, and for a while, a pirate industry matures.
  • Late 2030’s: Something very much like BitCoin resurges. This time, it has a killer app: micro payments for 3D printing patterns. Ubiquitous encryption prevents governments and corporations from monitoring transactions and hoarded gold provides the base for monetary exchange.
  • 2040’s: With much of the economy being conducted in unregulated 3D pattern markers and most transactions being conducted over BitCoin, the tax base collapses.
  • Late 2040’s: Governments seize fiat-denominated savings in a desperate power grab, but fiat money is now worthless compared to an untraceable currency like Bitcoin. Governments attempt to seize real assets to replace lost income, but are met by large-scale protests backed by homemade 3D printed weapons. Mass chaos and violence follows.
  • 2050’s: Stability re-emerges, as new judicial systems evolve backed by anonymous transactions. Large states become increasingly irrelevant.
  • Late 2050’s: The last stand of centralized governments: politicians call in the military in an attempt to rebuild the surveillance state and kill digital currencies for good. Assassination markets, long used in organized crime, are turned against politicians, as the populace fights back.

 

See also:

“….IT security specialist David Veksler and writer Tim Swanson discuss alternative digital currencies currently being developed and deployed including cryptocurriencies like Bitcoin and Litecoin. In addition, cyber security and hacking issues in China are reviewed.”

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Sophie’s Birth Plan

“A birth plan is a written list of preferences to be used as a guide for how you would like your labor and delivery to go.” Here is the one we used for our daughter, born February 26.

See the PDF for the document signed by our doula and midwife. Text below: Continue reading “Sophie’s Birth Plan” »

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America’s culture of violence

Although I believe in the individual’s right to own the means to defend himself, I want to say that I do not believe that the reason that there are so many violent shootings in the USA is that too few people own guns. Nor do I believe, that the main problem is that people do not receive enough mental health services. The chief problem is that we are sick to begin with.

The main cause of violence in America is that America has a culture of violence. It is everywhere — in our movies, cities, laws, and homes. It is not the weapons themselves nor any admiration for the weapons that is responsible for our worship of violence, but the fact that almost everyone believes that conflicts of interest are inherent to human interaction. Today, violence and destruction are more deeply seeded in our culture than ever before in the history of America. It is instilled in us when we grow up in violent households, go to violent schools, face violent peers, and experience the politics of violence as adults.

By “violence” I do not refer primarily to crude physical violence, although there is still plenty of that. I refer to the violence done when any parent, schoolyard bully, teacher, policeman, preacher, government bureaucrat, or politician says: “you must do this or else.” I refer specifically to the philosophical worldview implied in that statement: that human values inherently conflict with each other, and therefore men must extract values from each other by force.

The only thing necessary for the violence to end is for people to recognize that there is no conflict of interest between rational men. Everyone, from parents to businessmen to judges must accept the fact that men should and can gain values from each other by voluntary exchange rather than force. We must fully accept, integrate, and apply the simple idea that force is not a moral or practical means to gain the cooperation of other people.

If we raised our children to believe this for the first few years of their life, the violence in our homes, schools, laws and foreign wars would end.

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Learning to squat

You probably don’t know how to squat. In fact, you are probably not capable of squatting for any period of time, even though it is one of the basic human positions, just like standing and lying. Why does it matter? Because, as I recently discovered, squatting is the optimal position for all sorts of things — eating, working, defecating, exercising, and especially giving birth. Learning to squat can even prevent cancer!

The full, resting squat position

I first learned about squatting through “Natural Childbirth the Bradley Way” book. Squatting is one of the exercises the book recommends to build muscles for birth as well as an alternative birthing position. What most people knows as “squatting” is the partial squat — where only the ball of the foot touches the ground. This position cannot be held for long because it requires continual muscle tension. For the full “resting” squat, you must plant your feet flat on the ground with your buttocks resting on the backs of the calves. Try it. You feel off-balance, right? That’s because a life of sitting on chairs and wearing shoes with heels (including most men’s shoes) has shortened your Achilles tendons and left many muscles underdeveloped.

While “civilized” people who have office jobs and read blogs rarely squat, it is still very common in the developing world. In China (where I live), you will often see people squatting while working or eating. The majority of people across the world also squat on the toilet. Is that because they don’t have money to pay for western-style toilets and chairs?

Squatting for health:

from http://www.bengreenfieldfitness.com/2012/04/why-you-should-squat-to-poop/

Actually, it turns out squatting offers numerous health advantages for all kinds of activities. First, you must realize that human beings did not evolve to sit on chairs and toilets. This matters because the unnatural position we use while eating and defecating sitting down causes various health problems including:

  • Appendicitis
  • Bladder Incontinence
  • Colitis and Crohn’s Disease
  • Colon Cancer
  • Constipation
  • Contamination of the Small Intestine
  • Diverticulosis
  • Gynecological Disorders
  • Endometriosis
  • Hysterectomy
  • Pelvic Organ Prolapse
  • Rectocele
  • Uterine Fibroids
  • Heart Attacks
  • Hemorrhoids
  • Hiatus Hernia and GERD
  • Pregnancy and Childbirth Issues
  • Prostate Disorders
  • Sexual Dysfunction

Yeah.

Squatting for birth:

Squatting also happens to be the ideal position for birth. Lying down to give birth is a very recent “innovation” due to the replacement of midwives with doctors in the last century. Lying flat for birth reduces blood flow to baby and placenta, increasing the risk of fetal distress, whereas squatting maximizes the spaces between the pelvic bones and puts pressure on the cervix. Unfortunately, after a life time of sitting and wearing heels, most women cannot maintain a squat without extensive exercise.

Squatting for back pain:

About a year ago, I went to a social event which required me to stand while talking to people for several hours. Although no exercise was involved, the effort of just standing for an extended time caused such a strain in my back that I was in pain for weeks. Most adults have experiences some sort of back pain and assume that this one of the costs for the privilege of walking upright. In fact, the reason back pain is so common in the West is because we spend most of our time sitting or reclining rather than walking and squatting.

Farewell to the chair?

So we need to change our ideas about birthing position and toilet design, but what about chairs? Chairs for common use (rather than as thrones for public display) only because common with the European Renaissance.

I’m not an expert in ergonomics, but I suppose that sitting in a chair certainly has practical benefits. It allows for a better view of the surroundings, better access to operate machinery, and probably requires less calories. Are these benefits relevant to the modern office worker plugged into on a computer terminal all day? I don’t know. The important thing is not to rely exclusively on the chair (or couch or bed) to support one’s body. Ultra-comfortable ergonomic designs work against us when they allow the muscles that support the back and neck to atrophy. Every now and then, you must let your muscles and tendons do the job they were designed for.

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A comparison of two non-empirical hypotheses

“Mais où est Dieu dans tout cela?”
“[Sire,] je n’ai pas eu besoin de cette hypothèse.”
– Pierre-Simon Laplace

 

If you ask a pre-modern, pre-scientific person why he believes in God, he would probably mention the need to explain some natural phenomena, living or geological, or perhaps offer some ontological justification. If you ask a modern person, you are likely to get an explanation in terms of social goals – the need to justify or discourage various kinds of actions and attitudes.

If you ask a pre-modern, pre-democratic person why there needs to be a State, he would probably mention some specific purpose such as the need for defense against foreign threats. If you ask a modern person about the need for a government, he would probably first mention the need to enforce certain socially desirable activities and prohibit undesirable ones.

It seems to be that the justifications offered for religion and the State today are essentially the same. People believe that (1) an agent is needed to create and enforce the desired “natural” order and (2) that this agent is immune or excluded from the conditions giving rise to this need.

For example, it is believed that all entities require a creator, but the creator is excluded from this requirement. Likewise it is believed that people cannot peacefully coexist without a monopoly on the use of force, but that the States themselves can coexist without a single ruler over themselves.

If you offer a religious person a naturalistic basis for ethical behavior, or a natural explanation of the universe they will usually not try to disprove your argument on an empirical basis, but ask you to refute their arbitrary claims. For example, they will say that life itself is not a valid basis for a moral theory because it does not include a justification for their ethical doctrine (sacrifice, altruism, etc). Likewise, the instability of empty space due to vacuum energy cannot be a justification for the universe because it does not explain their version of “theological nothingness.” Arbitrary claims like this are impossible to disprove by empirical evidence. What argument can be given to someone who dismisses what we know to be true because it conflicts with what he wants to be true?

If you explain to someone who supports the State how a non-monopolistic, private agency could better accomplish some state-run function, they will usually not refute the argument directly, but ask you to refute their arbitrary assumption that only a coercive, monopolistic agency can full-fill that role. For example, if you explain why a private education would function better, they would not address the evidence directly, but ask how those who have neither funds nor charitable support could obtain an education – as if the State-run system is funded by magic, without either funds or electoral support. Their basic assumption is that voluntary cooperation is not possible to human beings in meeting certain kinds of values – but that the State is exempt from that same requirements.

The purpose of the above is not to convert the uninitiated but simply to point out how two popular memes have adapted to the Age of Reason by evolving from empirical to non-empirical, non-testable justifications.

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Why Paleo?

We are animals not far removed from the jungle. Genetically, we are identical to primitive man.

Our bodies have been shaped by our environment to make the best of the resources available to us. Our genotype (the DNA) only develops a healthy phenotype (our body and mind) in response to the environmental inputs it evolved to thrive in. The trouble with our modern, industrial lifestyle is that it is very different from the environment our bodies evolved to thrive in.

As a result, most of us are plagued by chronic illnesses that our ancestors never dealt with. If they survived childhood illnesses and accidents, our primitive ancestors could expect to live almost as long as us without the help of any modern comforts.

 

What are the sins of the modern lifestyle?

 

  • We eat terrible, non-human food: our bodies are adapted to handle a diet of mainly whole animal carcasses, leafy greens,nuts & berries, whereas modern man eats a diet full of grains and starches – full of carbohydrates that were a rare delicacy for primitive man.
  • We evolved to eat whatever food is available and to handle occasional fasts no to gorge ourselves multiple times a day on substances engineered to directly trigger our pleasure hormones.
  • We evolved to tone our bodies with hours of daily activity, but today we fight every exertion with door to door transportation.
  • Most people who try exercise programs follow stressful, repetitive and boring workouts which can be counter-productive and do not match the natural workouts our bodies adapted to.
  •  We evolved to handle occasional intense stresses (chasing prey and escaping predators) but we are overwhelmed with constantly stressful modern workplaces and hectic schedules.
  • The substitution of a physiologically proper diet with highly processed modern foods and toxic, synthetic sweeteners has destroyed our health as well as our sense of taste: we can no longer taste or appreciate the natural sugars and flavors in many foods.

So, why Paleo?

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There are two ways to measure life expectancy: objective (wall clock) time and subjective time: life as we experience and remember it.

A long boring life is subjectively shorter than a short, exciting life that is full of memories.  The boring, repetitive parts (commuting to work, sitting in a cubicle, watching television) get compressed while the exciting and novel parts stay fresh.  The best way to live longer may be to maximize the quantity of memorable life experiences.  We have more control over our experiences than our biological timeline.
What are you doing to optimize your subjective life expectancy?

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November 30, 2012 · 4:50 pm

Why I am a radical

Conservatism: the philosophical position that one should oppose new ideas and practices.

Moderatism: the idea that one’s pursuit of truth should never conflict with the majority opinion — too much.

Extremism: the belief that one should adopt beliefs opposed to the majority.

In relation to reality, in any given society, conservatives, moderates and extremists have similar ideas, since they have no epistemological method by which to come to believe anything else.

Radicalism: the idea that one should reach conclusions based solely on the evidence without regard for other people’s opinion. In other words, radicalism is intellectual honesty consistently followed to ultimate conclusions. Most people who have made a difference in history have been radicals.

True radicals tend to be opposed by conservatives, moderates, and extremists, since they are the farthest removed from the consensus.

I don’t know of a single perfectly consistent radical, either personally or in history. Everyone whom I have known or studied has compromised when the facts became too uncomfortable or inconvenient. It is not a matter of intelligence. To be absolutely honest with oneself and interested in the truth is the hardest thing there is.

What are the facts? Again and again and again — what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the unguessable “verdict of history” — what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!

— Robert A. Heinlein

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Us and them

Human beings naturally group people into those we identify with and “others.” We understand and empathize with “our” kind of people, but simplify others into stereotyped models. We treat our family, school, city, country, race, sport team, political or sexual identity, or whatever with various degrees of familiarity.

And then perhaps we travel to another city or country or social circle and meet some people who are different. Perhaps we get to know some of them. And when we return to our old grounds and see someone from the new group we have gotten to know, perhaps we feel a little different and a little less “otherness” about them. Perhaps we repeat this process a few more times. Everyone does this to some extent.

I think some people always feel a need to categorize other human beings into “us” and “them.” But travel allows some of us to make a generalization about human beings: there is no “us” and “them.” There are only human beings, and we all have dreams and fears and hopes. You can call that awareness empathy — the intellectual and emotional integration of the knowledge that other beings have a consciousness just as you are conscious. Even animals and plants, in their own ways. Maybe for some people this is natural, but I think for the vast majority it is something that has to be learned. This is one of the virtues of travel. Unfortunately, I think many people are never really aware of their own consciousness, so cannot see it in others. They see only the meaningless, superficial traits of physical appearance and cultural trivia.

I think once you see parts of yourself in others, it changes how you treat people. If you come to learn that you are flawed and believe in and love the good in you nonetheless, you will love it in others. You still see the good and the bad — without expecting the same understanding in return. You will not feel hate or anger because they are different from you. You will celebrate their values just as you celebrate yours and maybe feel some sadness when you see the consequences of bad ideas, but only in the sense of a lost opportunity, not as a wall between you or a fault which you must correct.

To accept the values of others as inherently justified is to accept other people as ends in themselves, just as your life is an end in itself. Accepting that others are ends in themselves means accepting self-ownership, and this is the key to peaceful, non-violent coexistence.

To recognize the commonality of life is also a means come to terms with mortality. Your life is important and unique, but it is just one combination of many. That particular combination will never exist again, but many other sets containing the same values and ideas will. The meaning of life is creating an aesthetic and authentic expression of elements, not mere survival.

Does the idea of universal empathy seem like a utopian dream? It’s an ideal — not a destination, but a direction. But I think it’s a path which contains some truth and practical usefulness.

Self-understanding is a requirement for other-understanding. We build models of other people’s consciousness by applying our self-image to them. At the same time, we form our own self-image by observing and interacting with other people. It’s necessarily synergistic process. As we come to know others, we discover ourselves. As we discover our own nature, we better understand the actions of others. And if we learn to love ourselves (and I believe that value is a necessary facet of all knowledge), we learn to love others — all others.

When I speak of universal love, I do not mean an abstract, unconditional, and ignorant kind of love, but of love which comes from understanding and seeing our ideas and values in others. And not just a few values which our conscious mind labels as important, but all values — values as such. Not that thin slice which is a shared background, but everything that makes us — us. We may disagree with ideas on the abstract level but still appreciate the broad base we all share. The taste of our favorite foods, and the hugs of those we love, and the reason we go to work every day, and the hero-worship and the starry nights and taste of the water we drink. To see and to value this in all people on a deep intellectual-emotional level is an essential part of self-understanding.

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