Friday, March 15, 2019

Doughnut Economics Way #8

The most excellent folks associated with "Doughnut Economics" are having a competition to determine "What’s the 8th Way to Think Like a 21st Century Economist?". I thought about not entering - let the young people do it, plus, I am totally a dilettante - but decided I needed to go on and put my $0.02 worth in. I put up these 5 thoughts a few weeks ago, and, after some more thought, have decided to go with #5 - with #4 thrown in as well.
  1. Abundance, not economy.
  2. Needs, not wants.
  3. There's not enough to go around - false.
  4. Who's going to pay for it?
  5. Money is software.


MONEY IS SOFTWARE, so never worry about money; worry about real resources, both sources and sinks.

The world went from the gold standard to fiat currencies in the 1970s. Central banks like the Federal Reserve System in the US create money as directed by their governments via the funding bills passed by their legislatures.

The principles of monetarism are increasingly being replaced by those of modern monetary theory (MMT). One of the most important of these is that the only thing that drives inflation - the bugaboo of expansionary monetary policies - is a lack of real resources, aka supply-side shortages. [1] Inflation, a bad thing in large quantities, is not normally connected to the amount of money in circulation. [2]

When you are writing software, everything is possible. I worked in software development for 40 years and 1 of my mantras was, "Don't ever let anyone tell you it can't be done." It may be too expensive or time-consuming (the 24 hour weather forecasting program that runs in 48 hours) now, but Moore's Law will eventually have its way, and sooner than you might think. [3]

Software, like language, is generative. You can always add another adjective or clause to a sentence; you can always add a new feature to your software package, or write another program to monitor the (monitor) programs you already have running.

Money appears to be generative in a completely analogous manner: you can always create another derivative financial instrument. The study referenced below [4] estimates that the value of derivatives is 5-10x the value of ALL other forms of money put together. MONEY IS SOFTWARE.

So the eternal conservative question of "who is going to pay for it" is completely irrelevant. If we really want to do something, the money can be created.

The question that should be asked instead is, "do we have the real resources, both sources and sinks, to do this?" This, of course, assumes we have the knowledge and technology needed to reach our goal - or the real resources to develop the needed knowledge and technology. Resources are real, finances are imaginary [5].

Smaller countries with their own currencies might have to worry about currency devaluation if they attempted aggressive money supply creation. It is then up to the larger countries like the US to prop these currencies up. Central bank purchases of bonds in these currencies seem like a simple way to do this.

Alternatively, the larger countries could create the money in their own currency and transfer it to the smaller countries as foreign aid. Either way, the developed world shares the wealth.

MONEY IS SOFTWARE. The design goal of this software should not be about keeping score. [6] It should be about creating a safe and just space for all.

[1] In my lifetime, the only instance of real inflation came following the Arab Oil Embargo of 1974, when the price of oil grew by 3x, creating an artificial supply-side shortage. It took 10 years for this price jump to ripple through the world economy. Tragically, this black swan event gave credence to Friedman's "Stagflation" theory, which helped to promote the disaster of Thatcher-Reagan austerity economic policies.

[2] This was demonstrated when the Fed's 2009 QE program increased the money supply by 3x, and, in direct contradiction to "an open letter to Federal Reserve Chairman Ben Bernanke signed by several economists, along with investors and political strategists, most of them close to Republicans" in the WSJ issuing dire warnings of "currency debasement and inflation", 0 inflation occurred. In fact, deflation continued to be the more pressing concern.

[3] It looks like weather forecasting might be plateauing at a 2 week forecast. Too much chaos theory after that.

[4] http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/

[5] This statement started as a complex numbers joke. Then I wondered, could there be any useful math treating economic quantities as complex numbers, with the real resources the real part and money the imaginary part? Sorry, physics degree ;->

[6] Current score (estimated): 1%, +$1,000,000,000,000,000 ($1Q); the rest of humanity, -$100,000 (-$100K) per capita. Can we each get our $100K back, please?


Thursday, March 14, 2019

All Over The Place

Three more novels read, kind of all over the place.

1st, "Jonathan Strange and Mr Norrell" by Susanna Clarke, 2004, 1024 pages. Somehow this got recommended to me; I thought it was more recent. It was a fun, amusing read. After I was done, I immediately watched the 7 episode BBC 2015 mini-series adaptation on Netflix. They did a good job compressing the narrative. This book could definitely use sequels, but I read that Clarke suffers from chronic fatigue syndrome.

2nd, "A Short Sharp Shock" by Kim Stanley Robinson, 1990, 154 pages. I think BookBub offered me a cheap version of this. As a big KSR fan, I was surprised I had never heard of it. It is an odd book, very surreal. Science fiction based, but far enough advanced that it feels more like fantasy. Actually more like post both, more like - shudder - literature. There were some images in the book that will stay with me for a while.

3rd, "The City in the Middle of the Night" by Charlie Jane Anders, 2019, 368 pages. I liked Anders' 1st award winning work, this one not very much. The plot is really meandering. Several plans are made which, when executed, result in the deaths of most of the participants - that gets old. The mostly female cast somehow reminded me of the female cast of "The Magicians" on SyFy, which I got tired of and quit watching. The emotional interactions seem so immature - but these characters are mostly college age, so maybe OK? Maybe just annoying to an old man? There was a development reminiscent of Octavia Butler that I liked.

This book reminded me of another recent book that I didn't like - "Autonomous", by Annalee Newitz. I think it was the same cavalier, flat affect attitude towards deaths and murders, and thuggish characters being presented sympathetically. This one is not as bad as the other. Then reading the acknowledgements, it states that Anders and Newitz are partners - so maybe their writing styles are affecting each other?

So, disappointing, I was glad when it was (somewhat abruptly) over. I will try Anders' next work tho.

Tuesday, March 12, 2019

MMT

In studying economics/abundance, I seem to be coming back to 2 concepts that I believe about how to move forward towards a post-scarcity utopia (tagged as "economy of plenty" in this blog):
  1. The Federal Reserve can create money and spend it to make life better for anyone without having to worry about hyperinflation because
  2. Inflation is caused only by supply-side shortages, not the amount of money in circulation (monetarism). I mentioned this here and here.
I've been very pleasantly surprised to find that this is indeed part of a rapidly growing, heterodox economics theory: Modern Monetary Theory, or MMT.

The Wikipedia article linked to above I don't think is very good. A couple of months ago I watched this video, which probably came up in an article in my RSS feed. I think it's very good and easy to understand.

Here's a quote from a slide from the 19:32 mark:

If Congress does not spend more money into the economy than our real resources, our productive capacity (our capacity to produce) can handle, then there is no inflationary risk.
So I think their "real resources" are my "supply-side". Yay, FTW!

I think maybe MMT may be passing somewhat of a tipping point. Here's my hero Paul Krugman arguing with MMT proponents - and disappointingly, worrying about inflation - a few weeks ago. Here's Larry Summers doing the same maybe a week later but in even stronger terms - "a recipe for disaster".

The old school just really doesn't seem to want to think outside their boxes. I guess that's business/academia as usual.

Studying economics/abundance has been really frustrating. So much of modern, orthodox economic theory seems bogus, as is detailed in, say, "Doughnut Economics". The microeconomics-based DSGE modeling seems to be a bad case of physics envy, and has so many simplifying assumptions baked in that its conclusions are worthless. It sure seems to me like it would not be that hard to write a good simulation of the economy, but I think that there is just not enough understanding of what the real underlying principles are. Well, I think the ideas of MMT are definitely an encouraging breath of fresh air. Now just need to convince Krugman.

Thursday, February 07, 2019

Nature Bats Last

In 2004, Kim Stanley Robinson, IMO the dean of current sci-fi authors and our greatest climate fiction author, published "Forty Signs of Rain", the 1st book of the "Science in the Capitol" (or "NSF Saves The World") trilogy. I blogged on it briefly here. Then, in 2008, as recounted here, I found myself with 7 hours left on a trans-atlantic flight with nothing to read but the 3rd book of the trilogy, "Sixty Days and Counting" - without having read the 2nd book, "Fifty Degrees Below Zero". Oh no! So I went on and read it, blogged briefly here, and figured that I would never read the 2nd.

I was pleasantly surprised when (I think) my daily BookBub email listed "Green Earth", 2015, 1071 pages. As detailed in the Intro, KSR was inspired by another author to combine the trilogy into 1 volume, removing some now unnecessary infodumps, and taking the total page count from 1100 to 800 - note Amazon says 1071 pages, which is more what this felt like. So I got to read the 2nd part after all!

This feels like KSR's 1st whack at climate fiction. His later stuff - "2312", "New York 2140", and "Red Moon" - shows how far his thinking about the climate crisis, and the future of the human race, has evolved. KSR maintains throughout that to address the climate crisis, we have to fix everything: broken politics, broken economics, broken cultures. Not unlike Naomi Klein in "This Changes Everything: Capitalism vs. the Climate". But, I found it interesting that "Green Earth" has us using several forms of geoengineering, which has made me uncomfortable since Klein characterized it as "using pollution to fight pollution". But I don't think that there's any question that we will be forced to attempt remedial geoengineering.

There is quite an interesting and varied cast of characters:

  • scientists;
  • NSF bureaucrats and staffers;
  • politicians and their staffers;
  • homeless Vietnam vets;
  • fregan, feral, overland frisbee golf players;
  • national security spooks;
  • tibetan buddhists including 2 lamas.
The main character, Frank, still is somewhat annoying in being 43 and having multiple girlfriends - altho the 1st time I blogged 3, this time I only count 2. Not sure what the inclusion of the tibetan buddhists was about, I'm assuming that KSR is a fan. There was 1 small subplot involving exorcising and then de-exorcising a tibetan demon from a 2-3 YO child??? Not sure what that was about.

Ha ha, 1 thing that definitely made reading the 2nd book worthwhile - a reference to TOOCITBOTBM, FTW!

We don’t do it,” Robin said. “The gods do it through us.”

“Robin is pre-breakdown of the bicameral mind.”

Some author, maybe Charlie Stross, recently commented how hard it is to write near future science fiction. The trilogy was 1st written 2004-2007, the rewrite came out in 2015. I would place the action as taking place in 2032-2033. Ha ha, there was a reference to buying some electronics at Radio Shack - oops!

I found myself bothered by some of the numbers, or inconsistencies therein. In Chapter 4, we have "average temperatures up by six degrees Fahrenheit already, CO2 levels in the atmosphere topping 600 parts per million" - wow, that seems way too high. In Chapter 13, it's at "450 parts per million". In Chapter 21, it's "500 parts per million". Annoying inconsistencies hobgoblinning my small mind.

Also interesting were various economic numbers. So are these starting points for KSR's extrapolation physicist (1/2 order of magnitude, a factor of 3) accurate?

  • "the financial benefit to civilization of “biosphere services,” now valued at $175 trillion a year." I think they later get around to concluding that these $$$ === the net wealth of civilization. No biosphere, no civilization.
  • "I’ve tried some back-of-the-envelope numbers, estimating the capital worth of the major port cities and other coastal infrastructure, and gotten figures like two quadrillion dollars." ??? Just checked, the 2018 Credit Suisse World Wealth Report puts total world household wealth - which would include corporations since they are ultimately owned by people - at $317T. Adding an equal amount for dark wealth and again for public wealth would put us near $1Q. 4% growth for 14 years would put it at around $1.3Q. So $2Q for just port cities and coastal infrastructure seems high.
  • "In fact they would have to leave some 2,500 gigatons of fossil carbon in the ground, as what the report called “stranded assets.” Estimated worth in current markets, $1,600 trillion." I had seen this number recently as more like $15T ???
  • "military budgets of the world equal about two trillion dollars a year, ... half of that coming from the United States." $1.7T in 2017, so a reasonable number.
That would be a nice website or Wikipedia page - show all the wealth in the world. This is an attempt, I guess. I'll look some more. Ha ha, derivatives appear to be be worth about 2-5x everything else put together. Never try to tell me that money is not software.

This surprised me:

the economy insisted on a minimum of 5.4 percent unemployment, to create the proper “wage pressure.”
??? I have never heard of any Fed policy to enforce a minimum unemployment rate, or the "natural" employment rate ???

I hope the people currently creating the Green New Deal use this book as a reference. I liked this as a good way to approach inequality.

4. Individual ownership of the majority of the surplus value of one’s labor.
So basically mandatory profit sharing with all employees. Nice!

This reminded me of the indefatigable Umair Haque (@umairh) - or vice versa, since KRS got there 1st. #downwithpatriarchy!

Thus patriarchy as a solution to the parentage problem led to hatred, war, misogyny, harems, male control of reproductive rights, including anti-abortion laws (those photos of a dozen fat men grinning as they signed a law), and, ultimately, taken all in all, patriarchy led directly to the general very nonadaptive insanity that they lived in now.
In addition to referring to TOOCITBOTBM, KSR gets bonus points for riffing on the movie "Groundhog Day" - indeed a great movie.

Well, we now have the Green New Deal moving forward in congress. Nothing will be enacted with the current senate and president, but still, good to crunch the numbers and make the plan. "Green Earth" starts out with Washington as gridlocked as it is now. The climate-crisis-induced natural catastrophes that occur in the 1st 2 parts serve as a wakeup call that mobilize action in part 3 - through giving Democrats control of both houses and the presidency and a popular mandate.

Are catastrophes of the level KSR describes going to be what it takes? One fears that without such totally unignorable gobsmacks that things will remain as they now, with all of us as frogs in the saucepan being brought to a boil and not noticing that it keeps getting hotter.

But, there is recently good news. It seems like the number of non-climate-change-deniers in the US is up to around 70%. Of course, we know how open to logic, reason, and data the other 30% are - not particularly. More importantly, the fat cats who own the $15-1600T of fossil fuels still in the ground really, really want their money. Well, we know what it's going to take at a minimum. Copied from 1 month ago:

One thing that I have gotten completely tired of writing: all this can be done, and we can move forward instead of backwards, if YOUNG PEOPLE START VOTING! Finally, the 2018 mid-terms were somewhat encouraging. Young, savvy leaders like Alexandra Ocasio-Cortez seem to be getting the yung'uns fired up. Finally!

Sunday, January 20, 2019

Old Favorites Revisited

I kept seeing "Circe" touted. My oldest daughter (@ericaheinz) recommended it as well, but also recommended I read the new Emily Wilson translation of "The Odyssey" 1st. So I did, followed by "Circe", followed by "The Song of Achilles", by the author of "Circe". Note, it's hard to imagine anyone not knowing, at least in broad strokes, these stories, so I'm going to go on discuss them including possible spoilers. So,
******************* SPOILER ALERT *******************
1st up, "The Odyssey" by Homer, translated by Emily Wilson, 2017, 592 pages.

This book got great reviews, and it is the 1st translation of "The Odyssey" by a woman. It is indeed well done, the iambic pentameter reads very nicely. Reading this book, I believe that I have never actually read "The Odyssey" - I have definitely watched the Kirk Douglas 1954 film Ulysses ~10x, and I probably read the Classics Illustrated comic book when I was a kid.

Some interesting stuff on life 3000 years ago. They liked to eat fat - indeed a great source of calories.

[A well known family story from my childhood. I was maybe 6-7 YO eating dinner with my maternal grandparents, George and Fidelia Boemker. We were having pork chops. I had trimmed the fat off and was eating the meat. My grandpa reached over, speared the fat, and popped it in his mouth. "You didn't want that, did you?" "Pop! I was saving that for last!" Like the ancients, people who lived through the Great Depression valued the caloric value of fat.]
At one point they are roasting "goat stomachs stuffed with fat and blood" - yum!

Two things I found interesting re TOOCITBOTBM

  1. In TOOCITBOTBM, Jaynes characterized The Iliad as having humans running the old bicameral software, where stress caused gods to wake up in our brains and tell us what to do. In contrast, The Odyssey had humans running our current software, capable of lying and not subject to gods waking up. But there are several instances in The Odyssey where the gods pretty much plant ideas in human minds. For example, in Book 18, "Athena, with her gray eyes glinting, gave thoughtful Penelope a new idea:"
  2. In TOOCITBOTBM, the wily Odysseus was Jaynes' archetype of the more modern brain software, which included the ability to lie. But Book 19 talks about Odysseus' "grandfather, noble Autolycus, who was the best of all mankind at telling lies and stealing." Ha ha, so apparently Odysseus wasn't the 1st liar - nor the greatest one, which seems to have been his grandfather.
1 thing totally new to me was that, after killing the suitors, Odysseus and his supporters had to fight the parents of all the eligible young bachelors that were slaughtered. Odysseus killed 1, then Athena broke the fight up.

Of course, I had to watch the Kirk Douglas "Ulysses" again. It is fairly true to the book. The main liberty it takes is in deciding to give Odysseus amnesia when he is in Phaecia - his last stop before finally making to Ithaca. I guess the screenwriters liked that better than Odysseus just lying, which was, of course, his speciality.

Next up, "Circe", by Madeline Miller, 2018, 353 pages.

This is a really enjoyable read. Circe and her 3 full siblings, children of the titan Helios and a naiad Perse, are the 1st sorcerers - they invent witchcraft and/or pharmacy, referred to as pharmaka. The book pulls in lots of figures of Greek mythology: Circe succors her uncle Prometheus; she creates the Scylla from a nymph she is jealous of; Hermes is her 1st lover; Medea of Jason and the Golden Fleece is her niece, as is Ariadne of the story of Theseus; the Minotaur is her nephew.

It is kind of a bummer, though, when the author recounts the tale of Odysseus after his return to Ithaca. He is a complete adrenaline junky, paranoid and bitter, and winds up killing himself while wresting a poison spear from his son by Circe. It was saddening to see the wily Odysseus come to such an end.

3rd up, "The Song of Achilles", also by Madeline Miller, 2012, 389 pages.

I enjoyed "Circe" enough that I decided to go for a trifecta and read Miller's tale of the godlike Achilles. I'm sure I had the Classics Illustrated comic book of "The Iliad". And I'm probably up to 6 or so watches of the recent Brad Pitt movie "Troy" - the 10 year Trojan War in only 3 weeks! I read parts of "The Iliad" (the Lattimore translation) trying to see if I agreed with Jaynes' characterization of mentation in TOOCITBOTBM.

The story is narrated by Patroclus, Achilles' lifelong lover. It is an easy read, but I didn't enjoy it near as much as the other two. The centaur Chiron, who tutors the 2 young men, is a high point. Ms. Miller definitely found her stride in "Circe".

Monday, January 07, 2019

The Gardens of Democracy

"The Gardens of Democracy", is a short 2011 book by Eric Liu (@ericpliu) and Nick Hanauer (@NickHanauer), 194 pages. It is a quick and easy read - I finished it in 2 days. It has a little preface and 6 chapters. Note, this book is more politics than economics, but, the 2 are so intertwined, and it does touch on economic topics such as inequality, so I will add it to my "summary of economics reading".

I was going to include the preface in whole - it is 8 simple statements, 12 sentences. But the last statement included a biblical reference as "it is said" - i.e., common knowledge??? - which I found off-putting, so, no inclusion.

The basic, simple idea of the book is a paradigm shift - from "machinebrain" to "gardenbrain" (an unfortunate choice of terms IMO) - from deterministic, machine-like descriptions of society and economics to the organic view of a gardener. Gardeners being biologists at some level, of course evolution is involved, and ecosystems.

Gardening paradigms have been well-loved in this blog, since the 1st economics book I reviewed/summarized, back in 2012: "How Much Is Enough?" Basic Good #5 of 7 is "Harmony With Nature", and their best example of harmony with nature is a garden. So, yes, and again yes, to gardening as a paradigm for managing our world.


Chapter 1 is titled "Seeds - Gardenbrain vs. Machinebrain". It begins:

AMERICA IS AN EXPERIMENT. It is an experiment in democracy, still the greatest the world has ever seen. But it is also, like every nation, human community, or living organism, an experiment in evolution.
I think I have also seen lately, an experiment in democracy and capitalism.

This insightful paragraph reminded me of something that has been sticking in my craw lately but on which I have not yet managed to comment.

On the right, we hear ideas even more historically irrelevant: laissez-faire economics and a “don’t tread on me” idea of citizenship that might have been tolerable in 1775 when the country had 3 million largely agrarian inhabitants, only some of whom could vote, but is at best naïve and at worst destructive in a diverse, interdependent, largely urban nation of over 300 million.
[So, seriously, originalism? What complete and utter horseshit! At the time of the Founding Fathers, there were very few corporations, and certainly none with the resources of states as there are now. There were no oligarchs - and it seems to me like Jefferson et al. didn't particularly worry about them. My feeling is that they thought that oligarchy was so completely opposed to their values that "it could never happen here".

So, originalists, please, think it through. Think what Jefferson et al. would really want us to be doing today: fighting corporatism, oligarchy, plutocracy, and kleptocracy, I'm sure.]

Here is the transition to the next chapter:

In our first book, The True Patriot, we argued that putting self above community and country was morally wrong. In this book, we argue that it is stupid. We aim to show that in theory and in practice, self-seeking is now a counterproductive instinct and that we need a bigger idea of what freedom means in order for our country to remain great.


Chapter 2 is titled "Self-Interest - True Self-Interest Is Mutual Interest". I like their declaration of a 2nd Enlightenment in the 21st century:

Today, most of the public is unaware that we are in the midst of a moment of new understanding. In recent decades, a revolution has taken place in our scientific and mathematical understanding of the systemic nature of the world we inhabit.
  • We used to understand the world as stable and predictable, and now we see that it is unstable and inherently impossible to predict.
  • We used to assume that what you do in one place has little or no effect on what happens in another place, but now we understand that small differences in initial choices can cascade into huge variations in ultimate consequences.
  • We used to assume that people are primarily rational, and now we see that they are primarily emotional.
The rest of the chapter enumerates the old vs. the 21st century paradigms:
Simple → Complex
Atomistic → Networked
Equilibrium → Disequilibrium
Linear → Non-linear
Mechanistic → Behavioral
Efficient → Effective
Predictive → Adaptive
Independent → Interdependent
Individual ability → Group diversity
Rational calculator → Irrational approximators
Selfish → Strongly reciprocal
Win-lose → Win-win or lose-lose
Competition → Cooperation
Ha ha, the "Rational calculator" above is our old friend "Homo Economicus", getting slapped around yet again.


Chapter 3 is titled "Great Citizenship - Society Becomes How You Behave". This chapter and the following 2 define the 3 domains to which the authors will apply their paradigm shift. Their 3 domains are the citizen, markets, and government. This reminded me of Doughnut Economics' 4 "realms of provisioning — household, commons, market and state" - but the household is a bit different in concept from the citizen, and there is no mention of the commons. I think if Liu and Hanauer did a revision on this book, they would incorporate the commons.

I think we have seen before the basic concept of this chapter - that somehow, we have gone from being being citizens to being consumers - a much more passive and less powerful role.

National measures of civic health—from volunteering to neighborliness to social connectedness—have all declined substantially since the 1970s.

All around us, in less measurable ways, there has been a slow and quiet seepage of trust and responsibility.

More ammunition against Homo Economicus and Libertarianism:
More than that, citizenship is a rejection of what Francis Fukuyama has labeled “the Hobbesian fallacy,” the ahistorical notion that humans began as individuals and only later rationally calculated that it made sense to band together in society. In fact, humans have been social from very the start; individualism is a creation of recent centuries.
The authors raise a great point, again supported by findings of evolutionary biology: that humans are copycats, such that social behavior, for good or ill, is contagious. We 1st ran into "humans as imitators" with Susan Blackmore back in 2003.

The authors propose 5 - oops, make that 6 - rules "for pro-social citizenship":

  1. Small acts of leadership compound. Every little thing helps.
  2. Infect the supercarriers. Attempting to positively influence bigger groups is good too.
  3. Bridge more than bond. Stretch yourself, seek contacts outside your tribe.
  4. Create Dunbar units. We ran across Dunbar units in the review/summary of "Abundance" - ~150 people, the "suggested cognitive limit to the number of people with whom one can maintain stable social relationships—relationships in which an individual knows who each person is and how each person relates to every other person". I'm not sure I get this one. I don't think I've ever been a part of a 150 person group. I'm usually part of several 20-40 member loose associations.
  5. Make courtesy count. This is 1 I totally agree with. It takes so little to perform minor acts of kindness - plus putting a little good karma in your account surely never hurts.
    I would also here include an admonition to "smile". I try to remember to smile when I'm out in public. Most people smile back, and, the way neurons work, happiness makes you smile => smiling makes you happy. So easy to spread a little happiness.
  6. Trust in trust. Trust is foremost among the social virtues that make healthy societies.
The authors dismiss concerns over 2 possible downsides to their proposals: groupthink, which they call "hivemind", and "majoritarian bullying". I agree that fearing either of these is pretty nonsensical. The authors of "Radical Markets" also seemed to be concerned with majority tyranny. To me, this is textbook Libertarian bullshit. Corporatism, oligarchy, plutocracy, and kleptocracy are far greater concerns.

The authors emphasize that "society becomes how you behave". Studies of dynamic systems, like traffic, show that if everyone backs off a bit, everyone does better. So, take that, hyper-Darwinism!


Chapter 4 is titled "True Capitalism - We’re All Better Off When We’re All Better Off". Ha ha, the subtitle of this chapter is such an interesting tautology. It reminds me of the Orwell quote that I have referenced several times recently:

Either we all live in a decent world, or nobody does.
This book was written just after the Great Recession of 2008, when "giant financial institutions were obliterated, the net worth of most Americans collapsed, and most of the world’s economies were brought to their knees". The authors conclude that markets in their current "machinebrain" form are not to be trusted. I've put their sections contrasting current markets with "gardenbrain" markets into a handy table.

Machine viewGarden view
1Markets are efficient, thus sancrosanct Markets are effective, if well tended
2Regulation destroys markets Markets need fertilizing or weeding, or else are destroyed
3Income inequality reflects unequal effort and ability Inequality is what markets naturally create and compound, and requires correction
4Wealth is created through competition and by the pursuit of narrow self-interestWealth is created through trust and cooperation
5Wealth = individuals accumulating money Wealth = society creating solutions

[Ha, ha, row 4 is a succinct explanation for why our current president, Agent Orange, has been such a spectacularly unsuccessful businessman - 0 trust, 0 cooperation, instead a "rape and pillage" model for how to treat one's business associates.]

The authors dig in on our inequality problem. They of course trace it back to 1980, St. Reagan, and trickle-down economics.

Concentration of wealth makes the entire society sick, and America is Exhibit A of this phenomenon.
This is a telling statistic:
If the income distribution for all Americans had remained constant since 1980, the average American family would be earning $64,395, which is $12,295 and 24 percent more than they do today. [2011]
They call out right-wing hypocrisy in supposedly opposing "redistribution" - we have radical redistribution now, but from the poor to the rich.
But of course, this agenda—as exemplified by the Reagan rewrite of the tax code and the Bush perpetuation of it—is itself government-mandated redistribution of wealth: to the already wealthy. The “state of nature” does not dictate preferential treatment of capital over work, or regressivity of taxation, or the tax-free inheritance of unearned wealth and power: these are all consequences of man-made rules. The question, then, is not whether redistribution but in which direction.
They astutely point out that when money is spent, it is not destroyed, it is merely circulated - and can be spent over and over again. Money is the lifeblood of the economy, and blood must circulate, or you get gangrene.

The authors propose replacing trickle-down economics with "middle-out economics". They define 5 "core principles that undergird middle-out economics":

  1. Grow from the middle out. ...
  2. Maximize the number of able, diverse competitors. ...
  3. Break up opportunity monopolies. They mention in passing financialization, which we learned about in Paul Mason's "Postcapitalism", of our economy.
    The richest 5 percent of Americans get more than half of all the benefits of the exemptions and deductions in the tax code. We must realign our asset and tax-expenditure policy so that loopholes and tax benefits work to benefit the not-rich rather than further fatten the already rich. It is why we need to invest the revenues from these first two steps into research and development and incentives for the formation of businesses that create jobs in America—not for the illusory products of our metastasizing financial sector. [my bold]
  4. Promote true competition. ...
    The ideology of “free enterprise,” as preached by anti-tax and anti-regulation activists, is used to prevent change to the current arrangement of economic power: don’t regulate my company, don’t touch my money, don’t let more people in on the game I’ve rigged. Socialize losses, privatize profits. It’s about defending capitalists; not capitalism.
  5. Harness market forces to national goals.
This is such a common-sensical analysis of the state of affairs, restating the tautology of this chapter:
Limited-government advocates say they don’t trust the government to spend your money. We say why trust the super-rich to spend your money? We say why not trust the people of the middle class to spend their own money? Like the trickle-down economics crew, we believe there is a goose that lays a golden egg in our economy. They think the goose is the top 1 percent. We think it’s the broad middle class. They think we’re all better off when the rich are better off. We think we’re all better off when we are all better off.
Again, this seems to be such common sense - but it was also common sense back in 1932.

This chapter ends with an excellent extended garden metaphor.

When seed is spread unevenly, the garden yields less fruit. When it’s spread more evenly, it yields more fruit. And this in turn yields more seed for the next season, which enables the evenly spread plot to yield still more fruit. In societies that have true prosperity, the rich don’t get richer; everyone gets richer.


Chapter 5 is titled "Self-Government - Big What, Small How". Setting the stage for this chapter:

The current dissatisfaction with government is not a mere perception or marketing problem, as too many on the left still believe. It is a product problem. Government has for too many people become unresponsive, dehumanizing, and inefficient. And it has not successfully met the most serious challenges of our time. Only when we improve government itself will our satisfaction with it improve. Unfortunately, the American discourse on government has long been frozen in two dimensions: more vs. less government, big vs. small. We argue for an orthogonal approach: more government when it comes to setting great goals and investing to achieve them; less government when it comes to how we collectively meet those goals.
This is the argument in this book which is new to me.

Limited government, as promoted by conservatives, is described as "small what, small how". The authors find this approach to have failed theoretically, empirically, and politically. The authors get lots of points for slapping around Libertarianism, which they describe as "no what, no how". The biological analogy of the "plants-and-animals falacy" is instructive.

Libertarianism is Machinebrain thinking at its worst. It rests on a linear understanding of social and economic systems and on the falsehood that humans are reliably and inherently rational, calculating, and selfish.

...

This is why any societies that are truly libertarian are in various states of civil war, and why the most cooperative societies with activist governments are the only prosperous, stable, and secure societies on earth.

...

The libertarian thesis of limited government depends, again, on a 19th-century notion that an economy or a society is a closed system, like a gas-powered car engine. If you take away gas, the car will go more slowly or less far. The system has decreasing returns. There is a zero-sum relationship between its elements. ...

In fact, our economy isn’t closed. It is open. The feedback loops aren’t negative. They are positive. The elements of the system are not in zero-sum relationship to one another. They are in symbiosis.

Zero-sum economic reasoning suffers from what we call the plants-and-animals fallacy. In nature, it would be folly to assert that the way to create more animals would be to limit plants. Plants nourish animals, which spread the seed and increase the number of plants that can now sustain a greater number of animals. Ecologically, more of one thing doesn’t mean less of another; in fact, it almost always means more. Relationships are not zero-sum; they are positive-sum. If you want more animals, you need more plants.

Limiting government to increase business makes no more sense than limiting plants to increase animals. Robust private enterprise requires robust state involvement and investment.

Big government, as promoted by the left, is described as "big what, big how". The authors state that it fails due to "sclerosis", "impracticality", and "crowding out citizens".

Here is their table of "Theories of Government".

LeftRightNew
Big governmentNo/limited government Self-government
Services & programsDo-it-yourself Tools
MomDad Coach
MandatesSilenceGoals
RulesNo rules Incentives
CentralizedDecentralized Polycentric
Big what / big howSmall what / small how Big what / small how

The authors provide the "elements of a big what":

  • To set strategic goals for the community, whether it’s a nation, state, or city, and to do so with an implicit moral opinion that some outcomes are preferable to others. ...
  • To equip every citizen with the greatest possible capacity—and equal opportunity—to join in the pursuit of those goals. ... It means spending some of the common wealth—generated by taxes—to improve education and health and to ensure that the disparities between the wealthiest and the poorest never grow so wide that it undermines social mobility.
  • To generate trust and to encourage cooperation. ...
  • To sustain true competition and break up concentrations of wealth and power that are unearned and self-perpetuating. In a non-linear, critical-complexity world like ours, advantage and disadvantage compound rapidly. Inequities of opportunity become self-reinforcing.

    This last point I feel cannot be understated. If we were on a completely level playing field, then maybe you could consider the pipe dream that is Libertarianism. But one of the key features of capital is that it accumulates, and after over 2 centuries of capitalism, there are such massive accumulations of capital that our "level playing field" resembles the Himalayan mountains.

Next we get the "elements of an effective "small now"":
  • Radically re-localize. ...
  • Be the citizen’s hardware store. ... This is a vision that the technology guru Tim O’Reilly has described simply: “government as a platform.”
  • Be a smarter prime contractor. ...
  • Create and amplify positive feedback loops. ...
  • Offer pounds and pounds of prevention. ...
  • Design more nudges. Exploit the cognitive biases present in humans, as we learned about in Richard Thaler's "Misbehaving".
  • Tax more strategically—and progressively. ...
  • Create incentives and rewards for over-performance. ...
  • Weed relentlessly.
I guess there are some concrete proposals in the sections for each of these list items, but nothing jumped out at me as low-hanging fruit.

The authors next point out the 0th problem - that our democracy has become markedly undemocratic. They propose the common sense reforms one would expect:

  • Reform redistricting. We do just recently seem to be making a little progress against gerrymandering.
  • Restrict money in politics. They reference the Citizen's United disaster.
  • Stop the revolving door. Ha ha, I think that Agent Orange's cabinet consists almost exclusively of former lobbyists.
  • Reform the filibuster. Didn't the traitor Mitch McConnell, the master of nation-be-damned expediency, decide to sacrifice the filibuster to some short term goal a year or so ago?
  • Reinvigorate voting. Voting in the United States should be mandatory, so that representation of the people is a reality and not a fiction. Australia has mandatory voting.
One thing that I have gotten completely tired of writing: all this can be done, and we can move forward instead of backwards, if YOUNG PEOPLE START VOTING! Finally, the 2018 mid-terms were somewhat encouraging. Young, savvy leaders like Alexandra Ocasio-Cortez seem to be getting the yung'uns fired up. Finally!


Chapter 6 is titled "Harvest - We Reap What We Sow". Here are some of the exhortations from this brief, final chapter.

We have been depicting, in short, a grown-up version of freedom. What does freedom mean? Only children and other immature people truly believe that it means only “I get to do whatever I want.” Only the immature believe that a slogan like “Don’t tread on me” makes any restriction tyrannical.

...

But the reality of the Revolution and of the intellectual, moral, and political atmosphere that yielded it is that our nation’s founders were formed by a philosophy of freedom as mutual obligation—of rights as duties.

...

Freedom is just another word for we’re all in it together. If it is to mean anything, freedom must mean responsibility. In the end, freedom is responsibility.

...

We are all second generation Americans. Great seeds have been sown for us. Let us now tend, with wisdom and humility, the gardens of our democracy.


So, overall, up until their new concept of government, not a lot of ideas we have not heard before. But, conceptually, a paradigm shift from machine to garden is most excellent, IMO. I am behind any paradigm that references gardens and/or gardening.

1 thing I did find annoying. They reference the Tea Party 3 times, as opponents of big, overreaching government who "want to reclaim ownership of government and regain the attention of our elected leaders". There is no mention of the fact that the main thing that actually enabled the foundation of the Tea Party was the racist backlash against the election of the 1st black president.

Here's my garden last May: tomatoes, zucchini and yellow squash, brussels sprouts, broccolini, leaf lettuce, kale, snow peas, cabbage, and green, red, and jalapeño peppers. Plus, in the background, a tomatillo bush that my wife planted, which produced tomatillos out the wazoo.