anomalyuk – Page 24

Anomaly UK

I’ve been doing this for over six years now, and some of the first things I posted I’d written up to a year previously. I want to recap over the major propositions that define what a newcomer would find.

Democracy

Most people would be better off in a society with minimal government as advocated by the libertarian movement. However, this is against the interests of politicians who need to use patronage to defeat their rivals, and therefore is not achievable under democracy or under any other political system.

Politics is not inevitable, however. If rule is in the hands of one unchallenged individual, he would be in the position of owner of the realm, and would act to maximise the long-term value of his asset. In the process, he would provide better government than any modern state. It is politics itself that is the problem.

Back in Democracy, for those not being directly promised bribes by one candidate or another, the amount of predictable improvement in policy by electing one candidate rather than another is often outweighed by the difference in entertainment value between the candidates, as estimated using the market prices of entertainment. Democratic politics can therefore be seen as a small section of the (huge) entertainment industry. That is not to say that government is insignificant, just that the changes that can be made to government by democratic politics are.

My views on this have been dramatically affected by Mencius Moldbug, of the blog Unqualified Reservations.

Climate

The Climate Change debate is about politics, not science. The question is whether the small chance that disastrous change will happen but can be averted by a concerted global programme of austerity justifies the costs of such a programme. The dangers are exaggerated by those who support austerity or transnational government or both. The dangers are minimised by those who support prosperity or small-scale government or both.

The political significance of climate science means that scientists on both sides feel justified in employing levels of dishonesty that they would never contemplate in ordinary scientific disputes. While this dishonesty is very minor in the context of politics, it is destructive of the scientific process, which requires exceptional levels of honesty to function properly.

My impression is that the so-called consensus towards Global Warming is a house of cards built on flimsy speculations, and sustained by special-interest funding and by political animosity towards critics. That conclusion is suspiciously convenient for the political views I held at the time I first reached it, but has in fact outlived the political convictions that one might have suspected of motivating it.

Global Politics

I think the arguments used to advocate the Iraq War were legitimate, but that the costs of the war, both to the OIF alliance and to everybody else, outweighed the benefits and it was therefore a mistake. There were people who correctly anticipated this, but I wasn’t one of them; I was a “don’t know”.

The major competing political forces in the world are the EU’s corporatist totalitarianism and the USA’s residual individualism. No other world power or ideology – including Russia, China and radical Islamism – comes close to challenging either of them.

Many foreign countries are crap places to live, but I don’t think there is any strategy for improving them by military action that will have overall beneficial results, although it might get lucky now and again. I think it is more beneficial to respect the sovereignty of other countries’ governments, even where they are very nasty.

Copyright exists to correct a market failure: that the creation of new valuable information benefits anyone who obtains a copy, but the costs are concentrated on the creator. Like all interventions to correct market failures, there are dangers, including capture of the regulatory structure by concentrated producer interests, which has clearly been demonstrated by retroactive extension of copyright terms. Also, as with other such interventions, it is not obvious that the market cannot find its own solutions to internalise the externality, nor is it obvious that the costs of regulation and the deadweight losses do not outweigh the benefits of the correction. Getting rid of copyright might be an overall benefit, although it would be dangerous. The evidence is overwhelming that reducing the scope of copyright would be beneficial, and that regulation aimed at suppressing technologies that are used to evade copyright enforcement is very harmful.

Free Software is cool. The overhead of protecting copyright in software is very damaging to the efficiency of the software production process and to the quality of the product.

his post will remain as a kind of “index” to the blog, and I update it if my positions change. For comparison, an older version is here

Why you should be a reactionary

Why I am not has disclaimed the label of “reactionary” I put on him when I linked to him. Fair enough, it is a clumsy label (perhaps “Sith” as used by MM is better), and the title of his blog suggests a certain wariness of labels in any case.

Concretely he goes on to paint a more optimistic view of conservatism than you will get from us reactionaries.

Frankly, my lifetime (I was born in 1981) has seen progressivism dragged behind conservatism, as the right has progressively neutered the left and so the progressive need to stand on some of the middle ground has forced them ever rightwards. The current Labour Party is far to the right of where the SDP stood at its formation.

I think that is his mistake. It is true that since the 1970s we have seen privatisation, liberalisation of international trade, and reduction in top tax rates.

But those were just a blip in the tide of advancing progressivism. Even leaving out the nationalisations resulting from the financial crisis, the regulatory state, backed by employment, equality, competition and environmental laws, exerts as much control over a lot of “private” business as the 70s state did over nationalised industries.

Top marginal tax rates are pushing back towards 1970s levels, and for most people the tax burden is much heavier than then.

Voluntary co-operation has been all but wiped out by crowding out from government services and from state-sponsored fakecharities, and also by regulation, most egregiously the protection of children laws, but with health & safety, occupational licensing and so on doing their bit. The coalition has rolled back a tiny fraction of the last decade’s impositions, but the expectation is that, like other governments, that is the lot and it will then turn round and start adding on further restrictions. (Remember that Labour on coming to power started by liberalising pub licensing hours — a typical “opposition” policy that looks totally out of place against their subsequent approach).

Voluntary association is also hamstrung by the nationalisation of virtue — the idea that only the state is entitled to distinguish moral and immoral behaviour.

As for “ending the progressive war on the family” — that is long ended; the war on the family was won decades ago. With illegitimacy rates near 50% and most marriages ending in divorce, family life is now a faintly eccentric choice, rather than an expected norm.

In all these areas, everything except international trade, that is, the current Conservative party is far to the left of the 1970s Labour party. And I can say with confidence that the Conservative party in 20 years will be further left still.

So what of the trade question — why is that an exception to the general leftward drift of the Zeitgeist: a mysterious consensus, which changes over the decades? The only answer is that occasionally reality made itself felt. In the post-war period, protectionism was believed to be generally a good thing across left and right. Reality occurred in the 70s, free trade got a good jump in the 80s, and has been fading ever since. We get as much state as we can afford, but just occasionally the left gets ahead of itself and we get a level of state destructiveness that physically cannot be sustained. In that circumstance, and only that circumstance, are rightists allowed some small victories. To claim those as victories for conservatives is to underestimate reality. (In fact, I seem to recall that in its last days even the Callaghan government was moving towards some Thatcherite policies, as the situation so urgently demanded them).

The best understanding of the place of conservatism in Britain today comes from Peter Hitchens (e.g. The Cameron Delusion, as well as his blog. I have not come round to his views on drugs, but otherwise I consider his analysis sound. (Remedies are another matter, but there we are all floundering to some degree.)

Only reactionaries realistically oppose progressivism.

Two points from Ezra Klein

Common Mistakes Made By Economists

1. Political power matters. There are many outcomes that are economically efficient in the short term but lead to a dangerous imbalance of political power in the long term

I wouldn’t use the word “imbalance” – balances can be dangerous too, but otherwise the most overwhelmingly important point in politics.

8. Policy arguments are often conscripted for political purposes…

This is a great sighting near the surface of something so deeply assumed that the assumption is normally invisible: policy is the opposite of politics.

Klein’s strapline is “Economic and Domestic Policy, and Lots of it”. But politics is only allowed in when it forces itself, by point 1.

I have only seen the view of politics being opposite to policy stated so clearly by critics, such as in Mencius Moldbug’s Explanation of democratic centrism

99% chances

Another sensible article by John Kay, this time about financial models. He mentions the Allais Paradox, which relates to what I called folk probability.

I have a quibble though: Kay says “There are no 99 per cent probabilities in the real world”. Clearly, there are. That doesn’t mean, though, that you or I know what they are.

The real point is that at very low probabilities, the chances of your model being wrong dwarf the chances you’re predicting. If you model a probability as 20%, but there’s a 2% chance that your model’s significantly wrong, the true probability is somewhere in 20±2%. That’s useful to know. But if you model a probability as 0.2%, that doesn’t magically make your chance of having got the model wrong a hundred times smaller. What you really have is a probability of 0.2±2 %. It might as well be 1±2% or 0.000001±2% — the question of how sure you are about your model is far more important than whether the model says 1% or 0.1%

More comments on John Kay pieces: ICI rents climate, copyright

Whatever2AV

I don’t have a strong opinion toward what voting system future General Elections will use. I don’t think that who gets elected is very important: voters don’t have any control over immediate policy; they only have influence over the long-term direction of policy, and that doesn’t depend on who wins any given election.

However, I used to be very interested in voting systems, and I have an intense dislike of bad arguments. The bad arguments in the AV debate come mainly from the No side.

The silliest is the cost argument. They claim that a switch to AV would cost 250 million pounds. That is highly improbable, and includes the cost of the referendum itself, which is a sunk cost in any case since the referendum is now going to happen. But just take it at face value for a moment.

Assume AV is an improvement — if it is not then the cost argument is irrelevant. 250 million is about five pounds per voter. The average voter will probably have the opportunity to vote in another six or seven elections. If a significant improvement in the value of a vote is not worth a quid, then what is a vote worth? The only people who should be influenced by the cost argument are those of us who believe that voting is worthless anyway.

There is also talk of voting or counting machines; that is a much bigger and easier argument than AV itself. Introducing machines is a huge mistake. FPTP hand-counted is far superior to AV with machines, since there is no reason for anyone ever to trust the machines.

A bizarre gem came from John Redwood, who wrote on his blog, “we think it undesirable that elections are settled by the second preference votes of those who vote for minor or unpopular parties”. He doesn’t say why. If you like your local independent, or Green, then the fact that you also prefer Conservative to Labour should therefore be of no interest?

A more cogent objection is that AV would produce Labour/Lib Dem coalitions into the indefinite future. I do not dismiss that, but I think it is mistaken. For one thing, the current situation shows that the support for the Lib Dems, being as it is a historically-produced random collection of highly disparate groups, with no policy positions in common at all, cannot survive the Lib Dems actually holding any power. But more to the point, the biggest effect of AV is within the parties themselves.

In 1981, a handful of senior Labour figures broke away from the party to form the SDP. That was only possible because of the utter failure of the previous Labour government, and the sheer disarray that the party was in. The SDP held a handful of seats for a few years, then merged with the Liberal party.

But imagine how much easier the job of splitting a party would be under AV. The problem the SDP faced was that for most Labour supporters, voting for the SDP instead of Foot was more likely to produce a Conservative MP than an SDP MP. AV greatly lessens that effect: if 50% of voters prefer Labour to Conservative, it is almost impossible for the Conservative to be elected because of the Labour vote splitting between two rival factions.

In fact, other factors might turn out more important than the voting system itself: in the face of the threat of splitting, I would not be at all surprised to see steps taken to defend the leadership of parties from internal dissenters. Pay particular attention to rules on party funding or ballot entry.

I think AV would give voters slightly more influence than they have now. I am quite unsure as to whether that’s a good thing or a bad thing: the Establishment in this country does damage in internal competition and through its religious attachment to Universalism, but on the other hand it is generally less stupid than the voters. So at the end of the day I am in the Whatever2AV camp.

Car Insurance

The EU car insurance ruling is a thing of beauty because it rules out most of the theories of why the EU does the things it does.

There is no possible ideology behind requiring insurers to ignore risk factors. There is no favoured class which will benefit — even the benefit to young male drivers will be very minor*, and there is certainly no general EU intention to benefit that class. There is no practical benefit. The only reason for the EU to decide to interfere in this particular question is because it can.

And there is nothing irrational in that. The EU wants to interfere in as much as possible, regardless of the lack of any justification, because everything it can touch increases its relevance — its power. This creates jobs for people to check that car insurance rates are in compliance. It creates opportunities for deals, exceptions, opt-outs, and straight out bribes. That is a sound, logical course action for a self-styled government with no country.

*since if the insurers adjust rates to bring in the same revenue as before, the effect will be to discourage low-risk female drivers and encourage high-risk male drivers, which will cost the insurers a lot more in claims — therefore the insurers will have to set the rate much higher than the weighted average of what it charges now, and accept a corresponding fall in business.

Degenerate Formalism

Aretae has responded to my defence of formalism:

My major objection is not North Korea, but china from 1000BC to 1900AD or Japan ~1500-1850. Stable society with stable-ish rulers stagnate hard. In neither case was maintaining rule a big deal…but in both cases, you had enormous periods of malthusian stagnation. That’s what scares the shit out of me about the formalist prescription is that the Game theory seems to guarantee that path.

This time the criticism is not that the leader untrammeled by democracy will be too rapacious, but instead too unambitious — happily sitting at the top of a stable but stagnating civilisation.

Once again, true formalism has an easy answer: as in any underperforming enterprise, the CEO of a stagnating sovcorp will draw the attention of investors who believe that by changing management they can get an improved return. They will buy the shares, call an emergency general meeting, and have the management replaced. Their fully-legal hostile takeover will be bloodless, as the share-purchasing crypto protocols ultimately give them control over the keys that activate the guns.

And again, I don’t buy all that. Mencius described the joint-stock sovcorp as an advance on the “family business” sovcorp, or hereditary absolute monarchy. Formalism without magic guns is just royalism — perhaps we could call it “degenerate Formalism”, as there is just one share of voting stock and it is indivisible.

So, is Formalism in its degenerate form susceptible to this kind of stagnation? I do not feel able to discourse adequately on three millenia of Chinese history. My impression of the last thousand is not of permanent stagnation, but of a complacency that set in after some centuries of being more technically and economically advanced than any neighbour. Success always carries a danger of such complacency, but success is nevertheless worth aiming for.

Japan, similarly, being sufficiently strong and advanced to be quite safe from its only neighbours, made a conscious decision to rest on its laurels, which only ceased to work when the world shrank around it.

No European country made any such abdication of striving for greater wealth and power, not because of different political arrangements, but because the competition between powers never waned.

Malthusian, is, I think, a red herring. Malthus was right about a world where agriculture was the main activity. Adding more people to the same agricultural land produced diminishing returns. It is conceivable that similar contstraints could return, but it does not seem imminent. Again, forms of government are not the determining factor.

On the other hand, it must be recognised that for any government, rapid growth, and particularly growth driven by technological change, is potentially destabilising. The key is that it unpredictably makes different groups in society more and less powerful, so that any coalition is in danger of rival groups rapidly gaining enough power to overwhelm it. Back with Malthus, if one group of families owns land, you can predict that they will continue to own land for many generations. But if another group is powerful because of trade, or manufacturing, or entertainment, they might be bust in ten years’ time. That is why the stability of feudalism is unlikely to return.

There are two circumstances in which the natural tendency of government to restrain technological advance is avoided. One is if it is as easy as possible for the newly rich to take power. That way, whatever the new technology is, those who benefit from it are in charge, and they will drive it on. The other is to totally detach power from wealth creation. Then the ruler will not care who is doing well, provided the country is wealthy enough for him to take a generous cut. The aim of formalism is to achieve the second situation. The ruler should be secure enough that he does not fear growing wealth of any interest group. The question is whether such security is possible.

The best government is one that nobody is trying to overthrow. Western democracy works as well as it does not because of any virtue it has, but because of the virtue people imagine it has, which false belief induces them to leave the government unmolested. If people were to understand that government is better when it is unchallenged, they would largely cease to challenge it.

I believe this was generally the case in late-medieval Europe. People did respect the anointed King, not primarily out of superstition, but because they understood that politics would only make things worse, as they were worse in the days of feudalism. This happy state of affairs was undone by the Stuarts’ idiotic fumbling of the religion question in England, and the return of politics in England triggered copycats around the world, in just the same way as Tunisia has triggered waves of politics across the Middle East. The world has yet to recover from the English Civil War.

Immigration Poll

The Englishman points at a Guardian article on attitudes to race and immigration in Britain. Apparently, “Huge numbers of Britons would support an anti-immigration English nationalist party if it was not associated with violence and fascist imagery”, according to a new poll.

Taken at face value, that supports the claim I made recently, that “if fascism had appeared twenty years ago, without the baggage of history, it would now be popular enough across Europe that it would probably have taken over most of it”.

It is also, in practical terms, meaningless. Any anti-immigration party is automatically associated with violence and fascist imagery, whatever the views of its founders and supporters, so there is no possibility of such a party becoming genuinely popular.

Taking any opinion poll at face value, however, is unwise. This poll was commissioned by Searchlight Educational Trust, and is the basis of a report to be published in full tomorrow. Whether the report’s primary aim is to directly discredit anti-immigrationists, or else to rally support to the anti-fascist cause, is not immediately clear. It may become more obvious when the report is published.

Incidentally, the language of the summary is revealing; Searchlight is nominally anti-fascist, but it highlights as dangerous the finding that 48% of the population would support a non-fascist anti-immigration party. If they were genuinely anti-fascist, rather than just pro-immigration, that would be good news.

On the Interests of Absolute Rulers

Aretae raises the question with respect to formalism: Doesn’t it depend on the interests of the ruler and the ruled being aligned?

The justification of democracy is that by making the rulers answerable to the population, it prevents the rulers from acting in a manner that is good for them and bad for the population — such as spending all the money on themselves.

Formalism in the true Moldbuggian sense has an answer to that: If a voter has actual influence over the government, that should be recognized alongside whatever other actual influences exist, and turned into a shareholding in the government. That makes the value of the influence more predictable, which makes everything more efficient. Every share in the government is the same as every other, so there is no more need for battle between newspapers and civil service departments, unions and universities, to make one group’s influence more than another’s. Everything runs much more smoothly, and everyone is better off.

I am not a true formalist, however. I see the joint-stock sovcorp as highly desirable but quite impossible. The enforcement of shareholder rights depends on the cryptographic protocols which link shareholdings to the ability to activate or deactivate the security force’s weapons. Without disputing the existence of protocols with the correct theoretical properties, I am utterly unable to imagine them being implemented successfully. It is amusing to contemplate control of the world’s armaments falling into the hands of Anonymous, but nobody is ever really going to risk it.

So, without formalism, what is my own response to the conflict of interest between ruler and ruled? It is to live with it. An absolute ruler will rule in his interest and not mine, and will raise money from taxes for his own use.

The ruler will be in the position of the proprietor of a firm; he is in a position to take any spare cash in the economy for himself. Like any government, he can levy taxes on anything he wants, and like any proprietor he can use the revenue raised to invest in the firm, or withdraw it from the firm as a dividend.

That brings us to the Laffer Curve. Everyone but the dimmest of left-wingers accepts that at some point, increasing a rate of tax decreases the revenue raised by the tax. However, the normal discussions of this miss a whole dimension, of time. Tax rates today affect not only the size of the tax base today, but also the size of the tax base tomorrow and into the future. The tax rate that maximises tax receipts over the next 12 months will not be the same as the tax rates that maximises receipts over the next 10 years, or the next 25 years.

In an idealised model of a proprietor of a state, with perfect foresight and perfect security, any extraction of tax that reduces economic growth would reduce the NPV of the proprietor’s interest. In more realistic situations, that would not hold; the rational proprietor would seek to diversify by taking profits out of the state and moving them into other investments, even at the cost of some impact on the profitability of the state.

My support for the idea of a secure, absolute ruler is motivated by the expectation that the cost of what the ruler takes would be smaller than the cost of the deadweight loss imposed by a government in which nobody has a significant interest in overall long-term growth, but which depends for short-term survival on appeasing large and changing interest groups — whether organised voter blocs, civil service departments, the military, or any other party on which an insecure government relies for survival.

I am much less worried about a proprietor’s extraction of profit from a country than I am about how much he will have to do to stay in power. That is the most important divergence of interest: he has an overwhelming interest in preserving his rule, whereas I am much less concerned.

All but one of Aretae’s examples of bad rulers caused damage not to gain wealth from the country, but in the course of maintaining power. The exception is King Leopold’s rule of the Belgian Congo, which was not in any sense a productive economy, but merely a pile of valuable ivory over which ran wild animals and (in the circumstances) uncivilisable natives — the experience does not extend to any country which is not a backward colony of a more advanced civilisation.

The example that is most troubling for me is not Stalin or Leopold but Kim Jong-Il. The same family has ruled there for 60 years, and secure rule in my theory should have produced good government. My assumption is that, while Kim Il-Sung and his successor have succeeded in retaining power, the power of the ruler is neither complete nor secure, and they are in a constant struggle with rivals within the regime. However, the lack of information about the internal politics of North Korea means that there is little evidence for or against this assumption.

Author: anomalyuk