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20141228 The Chosen Few

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This is research based on economic and demographic data that tries to explain reasons for unusual behavioral and vocational traits of Jewish population of the world. The explanation seems to be found in specific features of Jewish religion that are based on literacy and numeracy as religious duty even if it is costly and economically unjustified, except for psychological satisfaction that some individuals experience from process of learning and ideological discussions. The point is made that such individuals choose to remain Jews while other individuals who did not experienced comparable psychological returns choose to convert to other, less demanding religions. Consequently on the long run over period of hundreds of years this choice made Jews into self-selected group based on propensity to learn and therefore well prepared for explosion of market for high cognitive demand professions, successful and prosperous, but highly dependent on this market.


CHAPTER 1:70 CE to 1492: How Many Jews Were There, and Where and How Did They Live? From Jesus to Muhammad (1 CE-622): A World of Farmers; From Muhammad to Hulagu Khan (622-1258): Farmers to Merchants; From Hulagu Khan to Tomas de Torquemada (1258 – 1492): The End of the Golden Age Jewish History 7o CE-1492: Puzzles;

The first chapter gives overview of Jewish history and provides a list of relevant factors:

  • The destruction of Jewish temple and war did not dramatically decrease Jewish population of Land of Israel. However afterward for the next 500 years it dropped by some 90%. At the same time the number of non-Jews grew with total population decreasing by much smaller percentage.
  • However total Jewish population of the world decreased too, but much less with only about a half justified by massacres and general decline. At the same time the center of Jewish life moved from Land of Israel where Jews were farmers to Mesopotamia where they were artisans, traders, and members of other profession with higher level of demand for cognitive abilities. These professions where also in high demand in Muslim caliphates that were prosperous at the time
  • After destruction of caliphates by Mongol invasions the need in such professions fall dramatically and so did Jewish population of these areas with center of Jewish life moving to Western Europe.

CHAPTER 2: Were the Jews a Persecuted Minority? Restrictions on Jewish Economic Activities; Taxation Discrimination; Physical versus Portable Human Capital; Self-Segregated Religious Minority; The Economics of Small Minorities

Contrary to the common understanding, Jews for the main part of their history were not restricted in their economic activities except for participation in government bureaucracies. The typical Jewish trend to go into high cognitive demand fields was an individual choice of majority of individuals. Author reviews various theories of why it happens either due to exogenous or endogenous factors and concludes that none of theories provide satisfactory explanation of known historical facts.

CHAPTER 3: The People of the Book, 200 BCE-200 CE; The Two Pillars of Judaism from Ezra to Hillel (500 to 50 BCE): The Temple and the Torah; The Lever of Judaism: Education as a Religious Norm; The Destruction of the Second Temple: From Ritual Sacrifices to Torah Reading and Study; The Legacy of Rabbinic Judaism: The Mishna and Universal Primary Education, 10 CE – 200; Judaism and Education: The Unique Link in the Worm of the Mishna

This is a story of how Jewish religion becomes tightly connected to literacy and how education becomes a religious duty. It starts with Judaism loosing one of its two pillars – the temple and putting everything on the second one – Torah. The learning of Torah become a standard requirement for all Jews of land of Israel regardless of their wealth or lack thereof. There were multiple sects, which had various other ways of survival one of them being Christianity. However only one put everything on education and this one maintained Jewish specificity afterword. This tradition did not limit itself to Torah. It produced 6 volumes of Mishna completed about 200 AD. The new religious tradition made emphasis on reading Torah in Hebrew, rather then in regular language of environment, cementing Jewish specificity and continuation.

CHAFFER 4. The Economics of Hebrew Literacy in a World of Farmers; Heterogeneity and the Choices Facing Jewish Farmers circa 200; The Economic Theory: Basic Setup; The Economic Theory: Predictions; Life in a Village in the Galilee circa 200 through the Lens of the Theory; Annex 4.A: Formal Model of Education and Conversion of Farmers;

This is review of economic circumstances in land of Israel after temple destruction with emphasis on economic costs of continuing Jewish tradition of education with no return in sight for a long time. For farming community that Jews were at the time this continuing education was nothing more then costly ritual maintained only by a relatively small minority for whom intangible psychological benefits of education, discussion, and belonging were significant enough to stay within this weird tradition. Being an economist author provides mathematical analysis of these ideas.

CHAPTER 5: Jews in the Talmud Era, 200-650: The Chosen Few; An Increasingly Literate Farming Society; Conversions of Jewish Farmers; Summary.

This is a continuation of economic analysis of consequences of Jewish tradition to period from 200 to 650 when it still remained a costly religious duty with no visible benefits outside of psychological satisfaction. It accompanied by analysis of dynamics of Jewish population provided as support to the idea that since only minority of people could find strong enough psychological benefit of education for its own sake, it should be continuing decline in numbers of Jewish population due to conversions rather then extermination. A very interesting analysis is conducted based on material traces of Jewish population distribution such as synagogues buildings. This analysis points to much higher rate of decrease of rural population of Jews comparatively with city dwellers. It also points to legal limitations on Jewish attempts to stop mass conversions to Christianity.

CHAPTER 6: From Farmers to Merchants, 750-1150; The Economics of Hebrew Literacy in a World of Merchants; The Golden Age of Literate Jews in the Muslim Caliphates; Summary. Annex 6.4: Formal Model of Education and Conversion of Merchants

This chapter reviews period from 750 to 1150 when Jewish dedication to education unexpectedly started to produce great economic returns in form of white color jobs abundance of which was produced by development of great Muslim Caliphates in Mesopotamia. The point is made that it was not only education, but also legal notions and ideas, contract enforcement, and dispute resolution mechanisms developed within Jewish tradition that provided Jews with competitive advantages in areas of intellectual activities required by economies of bureaucratic states. This chapter also provides mathematical analysis of rate of conversion for different groups in relation to different methods of taxation with inference that proportion of merchants among Jews should grow by proportions consistent with actual historical data.

CHAPTER 7: Educated Wandering Jews, 800 -1250; Wandering Jews before Marco Polo; Jewish Migration within the Muslim Caliphates; Migration of Byzantine Jewry; Jewish Migration to and within Christian Europe; Migration of the Jewish Religious Center; Summary

This chapter is about prosperous Jewish traders who used their literacy and numeracy to provide services necessary for international trade all around the known world especially in Muslim Caliphates of Middle East and Europe. Special attention allocated to European Jews. Even if Jews moved to Italy, France, and Germany back at the period of Roman Empire, the bulk of Jewish population of Europe came from different sources and much later. They were seems to be attracted by need of multiple small kingdoms in qualified services of merchants, money managers, and artisans that Jews specialized in. With continuously changing forces of pull and push they were moved throughout the Europe eventually creating multiple small, specialized communities just about elsewhere without mixing that much with local population. Genetic research of Ashkenazi Jews shows their close relationship with people living in Middle East and North Africa rather then with French or German population of Europe.

CHAPTER 8: Segregation or Choice: From Merchants to Moneylenders I000-1500; The Economics of Money and Credit in Medieval Europe; Jewish Prominence in Moneylending: Hypotheses; The Dynamics of Jewish Moneylending in Medieval Europe; Jewish Moneylending in Medieval Italy: A Detailed Analysis; Attitudes toward Moneylending; Facts and Competing Hypotheses; From Merchants to Moneylenders: Comparative Advantage in Complex intermediation; Annex 8.4: The Charter to the Jews of Vienna

This chapter analyses the most pronounced Jewish specialty – moneylending. The point is made that it was not a business activity forced on Jews by religious restrictions on other population, but rather a choice that allowed most effective use of specifically Jewish skills developed via religious practice of education. Moreover data provided that Jewish participation in credit market was relatively small amounting to not more than 10-20% of market share. Also here are provided very specific data on types of loans, borrowers, and collateral used based on historical records in Italy.

CHAPTER 9: The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse? The Mongol Conquest of the Muslim Middle East; Socioeconomic Conditions in the Middle East under the Mongols; Jewish Demography under Mongol and Mamluks Rule: An Experiment; Why Judaism Cannot Survive When Trade and Urban Economies Collapse; Summary

This chapter is about Mongol conquest and destruction of sophisticate urban caliphates that eliminated need in type of professional services provided by Jews and following collapse of Jewish demographics in this area.

CHAPTER 10: 1492 to Today: Open Questions; Portrait of World Jewry circa 1492; Jewish History, 7o CE-1492: Epilogue; Trajectory of the Jewish People over the Past 500 Years; Persistence of Jewish Occupational Structure

The final chapter briefly restates the Jewish history traced in this book until 1492 and adds snapshot of changing demographics and locations of Jewish population of the world. It is specifically stresses continuity of Jewish vocational profile and prominence achieved by Jews in all intellectual areas. This prominence and its source in the contemporary world when intellectual profession became the most important and competition in traditional Jewish vocational areas is high are posed as questions for the next installment of this research related to periods from 1492 until now.


I find this book and its ideas very intriguing and having high explanatory value. If typical count of generations for humans is about 25 years, then period from destruction of temple to opening of opportunities in Muslim caliphates in 650 had about 25 generations: more than enough for genetic selection. At the same time contemporary world demonstrates that practical disappearance of religious tradition of Jewish learning combined with prosperity, and security of young Jews dramatically decreased their intellectual ability to analyze and appreciate facts and ideas, while leaving intact their seemingly inherited joy of participation in all things ideological, making them into fodder of all kinds of ideological movements from eastern religions to weird cults of environmental extremism, and even to far left anti-Semitism.

20141221 Governing the Commons

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Traditional approach to use, maintenance, and allocation common pool resources (CPR) is not sufficient to describe successfully existing arrangements known in multiple societies. It is also usually fails to fully explain failures of CPR use that very often occurs. The detailed analysis of multiple real life cases allowed author identify common features of successes as well as failures and develop a workable framework for creation institutions necessary for successful management of CPR.



The book is a reflection on common use of resources and has 3 objectives: critic existing foundation of political analysis of commons, provide empirical example of successful resolution of the problem, and develop tools for understanding self-governing mechanisms for use of common resources.

Three influential models: The tragedy of the commons; the prisoner’s dilemma game; the logic of collective action: The free traditional models reviewed are: tragedy of commons when lack of responsibility leads to degradation of common resource, prisoner’s dilemma when one uses commons at the expense of another, and Olson’s logic of collective action when effective use of commons is possible only by using coercion against individuals who fail to act in common interest.

The metaphorical use of models: These 3 models and their variations routinely used by politicians as metaphors to justify some policy in regard to such resources as fisheries or logging areas when direct control is difficult.

Current policy prescriptions: Leviathan as the “only way”; Privatization as the “only way”; the “only” way? An alternative solution; an empirical alternative; Policy prescriptions as metaphors; Policies based on metaphors can be harmful: the political prescriptions usually one-sided promoting either leviathan option (centralized control) or privatization (decentralized control) as the only way to solve the problem. The first one encounters problem of cost and effectiveness of control, while the second had difficulty to overcome complexity of resource division. Author believes that there is another better way than these polar options. This way is provided by empirical evidence of real societies managing commons.

A challenge: to develop theory of human organization based on reality of human abilities and limitation rather than on metaphorical ideas. The key approach to organization as self-organizing entity with limitations being: common pool resources (CPR) should be renewable, scarce, and situations when user can harm each other. Based on empirical research presented in the bulk of the book, author provides some conjectures about ways to meet this challenge.


The approach is based on study of small scale CPRs with self-organization of group of principals who successfully managed beneficial use of resources and prevented such downsides as free riding and shirking.

The CPR situation: CPRs and resource units; Rational appropriators in complex and uncertain situations

Here author defines detailed meaning of CPR, resource system, resource units, and other key notions of this research.

Interdependence, independent action, and collective action: The theory of the firm; the theory of the state

This part is review of different types of actions that individuals could use in relation to CPR with special attention to interdependency of actions by all individual appropriators of CPR benefits. Author reviews and compares firms as voluntary contractual organizations with state as involuntary organization based on ability of some individuals punish others.

Three puzzles: supply, commitment, and monitoring: The problem of supply; the problem of credible commitment; the problem of mutual monitoring

This is a brief review of literature on problems of supply of institutions, making commitments, and monitoring actions of individuals in relation to CPR.

Framing inquiry: Appropriation and provision problems; multiple levels of analysis

The main feature of this inquiry is that it has multilayer character rejecting usual limitation of prisoner’s dilemma. The main interest here assigned to CPR management when PD is not applicable. Appropriation problem is related to how participants allocate fixed and time-independent quantities of resource to avoid its dissipation and conflict. It relates to assignment of spatial and/or temporal access to resource. The problem of provision relates to investment into creation and maintenance of CPR. It reviewed from both supply and demand sides of the issue. The levels of analysis include institutions, which defined as set of rules that includes subsets of rules about changing the rules (constitutional rules), collective choice rules, and operational rules. Additional division is into formal and informal rules at all levels.

Studying institutions in field settings

Here author provide rationality for selection of objects for studies presented in chapters 3, 4, and 5.



The key parameters for selection were: 1. Appropriators devised their own rules and implemented their own control, mechanisms 2. CPR and rules survived for a long time.

Cases reviewed: Communal tenure in high mountain meadows and forests: Törbel Switzerland, Hirano, Nagaike, and Yamanoka villages in Japan; Huerta irrigation institutions: Valencia, Murcia and Orihuela, Alicante; Zaniera irrigation communities in the Philippines

Similarities among enduring, self-governing CPR institutions:

They all include the following 8 principles:

  1. Clearly defined boundaries;
  2. Congruence between appropriation and provision rules and local conditions;
  3. Collective-choice arrangements;
  4. Monitoring;
  5. Graduated sanctions;
  6. Conflict-resolution mechanisms;
  7. Minimal recognition of rights to organize;
  8. Nested enterprises

The chapter provides detailed discussion based on reviewed cases for each principle of successful CPR control by community.


If chapter 3 analyzed existing long-term institution, this chapter is an analysis of the process of creation of such institutions. The case reviewed is CA water distribution between different areas. The analysis is conducted as multilayered review of different “games” played by participants in the process of setting up institution for control of appropriation of CPR of water:

The competitive pumping race: The setting, the logic of the water-rights game

The litigation game: The Raymond Basin negotiations; The West Basin negotiations; The Central Basin litigation; Conformance of parties to negotiated settlements; The entrepreneurship game: Reasons for forming a district to include both basins; Reasons against forming a district to include both basins; The polycentric public-enterprise game;

The totality of these games and their outcome led to establishment of robust institution that author believes would last for a long time.

The analysis of institutional supply: the supply of institution included creation of new private associations, extensive litigation, legislation and creation of new taxable entities. Overall these activities demanded very high allocation of resources for collection of information, development of detailed CPR knowledge, and complex negotiations.

Incremental, sequential, and self-transforming institutional change in a facilitative political regime: As result of analysis author stresses an incremental process of institution development within framework of self-rule facilitated but not fully controlled by political regime.

Reformulating the analysis of institutional change:

The result of analysis provides some rules of thumb for development of an institution such as need to ask two question at every step of development: 1. Is this action (outcome) required? 2. Is this action (outcome) forbidden? Finally author discusses difference between institution creation and institution change as two different types of activities requiring qualitatively different amounts of effort and resources.


This chapter reviews a number of cases when CPR institutions failed.

Two Turkish inshore fisheries with continuing CPR problems; California groundwater basins with continuing CPR problems; A Sri Lankan fishery

Irrigation development projects in Sri Lanka; The fragility of Nova Scotian inshore fisheries;

Interestingly enough all reviewed cases of failure involved massive participation of government.

Lessons to be learned from comparing the cases in this study

Author divides causes of failure into 2 groups: faulty use of 8 design principles described in chapter 3 and situational and regime characteristics that effected capacity of individuals to change their institutions.



Traditional models such as tragedy of commons, prisoners’ dilemma, and collective actions all are not applicable to reviewed real life cases. These models are not wrong, but they would work only in case when assumptions are fulfilled, which is not necessary case in real life. Based on reviewed cases author identifies specific rules for applied in successful use of CPR and develops framework for analysis of similar situations

The problems of supply, credible commitment, and mutual monitoring

The rules for CPR success are:

  • Defined set of appropriators of CPR
  • Rules are directly related to specific attributes of CPR
  • Rules designed by appropriators themselves
  • Individuals who are accountable to appropriators monitor compliance
  • Rules include predefined and graduated punitive sanctions

A framework for analyzing institutional choice: Evaluating benefits; evaluating costs; Evaluating shared norms and other opportunities; the process of institutional change; predicting institutional change

Author also provides a detailed framework for analyzing institutions for both types: constitutional choice and collective choice. The framework includes complex configuration of variables that should be included in order to achieve successful outcome.

A challenge to scholarship in the social sciences

Author identifies deficiency of typical analysis as use of rigid models that lead to predefined conclusion about necessity to increase centralization, often at expense of eliminating previously existing institution. The recommendation is to be more cautious with models and rely more on existing ideological and analytical framework of western civilization created by individuals like Hobbs, Hume, Adam Smith, American founding fathers, and other thinkers.


It is a very interesting book in which economist goes beyond simple ideas of tragedy of commons versus private ownership and proposes well justified and based on empirical research framework of cooperative management of CPRs based on voluntary participation. For me this is the key ingredient of not only economic, but also moral success because in this case coercion used minimally and only to enforce previously agreed upon rules. I also find this research extremely useful for future designers of institutions of cooperation for CPR use and maintenance that we’ll have to develop sometime in the future when dead end of society based on government coercion become obvious for majority and multitude of new institutions for voluntary cooperation will be required to substitute old non-working bureaucratic arrangements of contemporary world.

20141214 Mindwise

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The main idea of this book is somewhat trivial: it is very important to understand other people in order to interact and cooperate with them. Author reviews wide body of research demonstrating how exactly it happens in real life not only with other people, but also internally: ability to understand individual’s own mind and what to do to expand self-knowledge. Another aspect reviewed is people interaction with ideas about others either in form of dehumanization of other or humanization of non-existing entities like spirits and such. The final conclusion is that in order to understand other people one has to listen to them and observe their behavior rather then try to pick up some mini signals.


PREFACE Your Real Sixth Sense

The real sixth sense is ability to understand others and us themselves. This sense is absolutely necessary for cooperation and sometimes it works and sometimes it does not work and that’s what this book is about. It starts with description of experiment to demonstrate difference between humans and chimps. The comparison was between chimps and kids at earlier levels of development when both groups were equally successful in solving simple physical problems. Kids, however, were dramatically better in social tests in which success required ability to understand mind of other.


1 An Overconfident Sense

This chapter starts with an example of president Bush who misread mind of foreign leaders. After that it goes to analysis of humans ability to understand what other people think about them. The result was pretty good ability to understand what is overall impression one has on a group, but really poor ability to read mind of the specific individual. People also cannot predict what impressions would produce their photo on other people: whether they are considered attractive or not. Another research shows that ability to recognize lies is barely above random coin toss. Probably the most interesting finding is that people are not really good in reading their close friends and relatives: average accuracy of mind reading is 35% for close associates and 20% for strangers. Better results were demonstrated for married couple’s ability to evaluate levels of self-worth for the partner: 44%, but self-estimate of accuracy was 82% nearly double actual.

2 What You Can and Cannot Know About Your Own Mind

This starts with another interesting finding related to racism in USA in 1920s. When asked over the phone to accommodate Asian person 90% of clerks in hotels refused to do it. However when Asian individuals actually come in person the accommodation was refused only once out of 251 attempts. Similar experiment in our time demonstrated another version of the same result: vast majority of individuals predicted that they would be outraged by racist joke if told in their presence. In reality when it did happen overwhelming majority did nothing and expressed no discomfort. Author also recounts the famous Milgram research on obedience when people consistently cannot predict how far they would go in compliance with clearly cruel and inhumane orders. More benign form of this poor self-knowledge is our usual inability to correctly estimate how long it would take to accomplish a task. From here author provides key analogy for complex structure of our mind that contains huge amount of unconscious processing and much smaller amount of conscious: house where what we see is our conscious perception of house, but much bigger part of house: foundation, plumbing, wiring and such is invisible. The brain is constantly at work to generate finished product for consciousness from chaotic bits and pieces of information provided by senses. This subconscious process really drives our actions for which we come up with logical explanations afterword. One of manifestation of this is human ability filter out facts that are not consistent with their believes whether these are political, religious, or any other strongly help believes.


3 How We Dehumanize

As it could be expected, the chapter on dehumanizing starts with story of American Indians and then moves to civil rights protests with signs “I am a man”. Then it goes to statement that distance makes other people remote and insignificant preventing our ability to sense their minds. However two triggers: physical sense and cognitive inferences could prevent the dehumanizing. Author provides example of physical sense trigger overriding dehumanizing environment by referring to the fact that majority of US soldiers in WWII did not really fired their weapons. The cognitive inference trigger demonstrated by referring to different parts of brain being activated when person observes other person’s pain than when person is in pain. Characteristically neither of these parts of brain activated when one looks at dehumanized objects. Another finding is that there are different degrees of dehumanizing so it could be said that it applied to everybody with various intensity. Author provides example from business and military to demonstrate levels of misunderstanding of other people due to refusal to assign to them the types of motivation as one claims for self.

4 How We Anthropomorphize

This chapter describes and provides quite a few of interesting example of human ability to assign intention and planning similar to humans in situations where there are no agency, but rather random events. Human mind designed to make sense from events and situations. An interesting point is made about our relations with machines. As long as they function as expected we take them for granted and see no intentionality. However as soon as machine either car, or computer, or some other device fails we assign agency to this device and try negotiating with it however funny it looks from outside. It also relates to things like billiard balls and such that move along not easily predicted trajectories.


5 The Trouble of Getting Over Yourself

This chapter is about neck problem: inability of people to look at issue from point of view different than their own. Example provided of experiment screen shelves with boxes open or closed differently from one side to another so one person has different picture then another. When asked to provide instruction to move things in boxes people often make mistake of not taking into account that other person does not see what they see. The errors level for adult is about 25% and children all the way up to 50%. This also related to overestimate of one’s importance and attention received from other people. This also related to evaluation of commonality of knowledge one possesses. For example people normally assume in conversation that vocabulary is common for all participants, while it may not be a case.

6 The Uses and Abuses of Stereotypes

We live in the world of stereotypes, which nearly always are not completely correct, but “good enough” shortcuts for everyday activities. As example a research on attitude to inequality was provided. Republicans do prefer inequality over equal distribution, but only by 3.5% more, than democrats. Another experiment is with circles: decide whether single circle included in picture with multiple circles. People usually wrong, but they are wrong consistently. Overall conclusion is that use of stereotypes is complex process with multiple feedback loops when stereotyped people for example unconsciously adjust their behavior to stereotype. A very important point however is that people easily drop stereotypes when they are dealing with individuals like in “All politicians are crooks, but my congressman is a good guy”.

 7 How Actions Can Mislead

This chapter is about behavior that could be perceived completely differently than it is. Example provided of person with heart attack in crowded mall that was perceived as drunk. Contextual forces play a huge role in such situation. This is used to control people’s behavior as it discussed in book “Nudge”. Author discusses different problems such as environment, obesity, and school performance and how to create context in which people would do what he considers the right thing.


8 How, and How Not, to Be a Better Mind Reader

Author describes the typical approach to understanding other people as either picking up their involuntary body signals or attempt to put oneself into other person’s shoes. He claims that both approaches are not supported by scientific evidence. As evidence of ineffectiveness of picking up bodily micro movements he provides failure of airport screenings. As to effectiveness of point of view placement the main problem is that people usually do not understand other persons’ point of view, does not know facts or falsehoods this view is based on, and have little understanding of cultural environment in which other person developed his/her personality. The final inference is that the only way to understand other people is to ask them, listen to whatever they have to say on their own, and observe their actions in real life. The main problem however is the difficulty of creating such environment that people would not be afraid to express what they really think. Another problem is that people often do not really know themselves good enough.

 AFTERWORD Being Mindwise

The final note is on importance of understanding. It is discussed using Caribbean Crisis of 1962 when misunderstanding nearly led to nuclear war.


While I am quite familiar with many of experiments presented in this book, nevertheless it was an interesting point of view on human understanding of themselves and others and ability to communicate. I fully agree that the best way to understand people is to ask, listen, and observe action, only I would rely more on actions observation then on anything else because it is not unusual for people to misrepresent their situation and intentions. However I would take wider view on understanding people starting with the issue author does not include in this book: philosophical setup of individual under review. I do not think it is possible to understand anybody including oneself without looking first on background of the person, environment in which person grew up, and what is considered right and wrong in this environment. For example a person who grew up in environment where “You shell not kill” relate only to people of his tribe, while commandment in relation to people from other tribes is “You shell kill” should be perceived based on knowledge of this background rather than personal characteristics of this person if one want to select right behavior in any encounter with such individual.

20141207 Forgotten History: Progressive Empire

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The 17th President: Andrew Johnson: ABOLITIONIST INFIDEL DEMAGOGUE;

PRESIDENTIAL vs. CONGRESSIONAL RECONSTRUCTION; Black Codes; Joint Committee on Reconstruction; Freedmen’s Bureau and Civil Rights Act; Racial Violence; Conquered Provinces; The Reconstruction Amendments; Impeachment; Congressional Reconstruction and a Missed Opportunity; FOREIGN POLICY: Alaska; THE RISE OF THE TYCOONS; A WHOLE NEW WORLD:

The accidental president who was the only one democrat in senate remaining on the side of Union, Andrew Jonson was nevertheless convinced supporter of slavery and Southerner. The main issue of his presidency was after war settlement between South and North that initially failed leading to virtual continuation of civil war as relatively low intensity conflict. Despite Johnson’s resistance and vetoes civil act and reconstruction amendments 13th, 14th, and 15th become laws, but their real implementation was put on hold by resistance of Southern states that were able pretty much restore pre-war power structure. While the South continued its struggle, the North moved on to open the great era of economic and technological growth.

The 18th President: Ulysses Grant: THE NEW PRESIDENT; FOREIGN POLICY: Cuba; The Alabama; The Caribbean and the Pacific; THE SPOILS SYSTEM, GRANTISM, and CRONY CAPITALISM; The Rise of Political Entrepreneurs; Black Friday; Other Scandals; LAND FOR RAILROADS; The High Cost of Free; Prewar Land Grant Railroads; The Pacific Railroad Acts; Binding the Nation; Credit Mobilier; The Panic of 1873; New Philadelphia; WAR IN THE WEST; Treaties; Comancheria; The Southern Plains and the Red River War; Minnesota; The Northern Plains and Red Cloud’s War; The Desert and the Apache Wars; The Irony; RECONSTRUCTION: Racial Violence and Terrorism; CENTENNIAL ELECTION; Scott Plan, Wormley Agreement, and Compromise of 1877

The presidency of U.S. Grant had 3 main developments. The first and probably most important was development of contemporary system of crony capitalism when government provides support and lots of free staff to business owners close to government. At the time it was mainly railroads that were given huge amount of land either unpopulated or taken away from Indians. Inevitably it resulted in a number of Indian wars that eventually brought in annihilation of significant part of Indian population and push of its remnants into reservations. Formation of crony capitalism system also resulted in multiple scandals when various schemas of transferring public wealth into private coffers were implemented. Another significant development was intensification of civil war with South to the point when it was military occupied and white southerners were deprived of civil rights in order to assure civil rights for black. This war of attrition ended as many future similar low intensity wars of USA when will of more military powerful side was discounted to nothing by stronger will of materially weaker side leading to defeat of North under disguise of compromise. In this case southern whites got back their political power and successfully substituted slavery with new system of racial segregation.

19th President: Rutherford Hayes: A MORAL PRESIDENT; Carlisle Indian Industrial School; THE GRFAT RAILROAD STRIKE OF 1877; CURRENCY REFORM; FOREIGN POLICY; RECONSTRUCTION and THE FREEDMAN; Slave Narratives; W. E. B. Du Bois and Frederick Douglass; Penal Slavery; Free Labor; Micro-Banking; Legacy of War and Reconstruction; A NEW ERA; CHICAGO CONVENTION:

In order to elect Hayes Republicans struck the deal for ending military occupation of South. It virtually put civil war to end leaving white Democrats of South to establish new order on the base of segregation. Hayes also tried to bring end to Indian wars and bring Indians into western civilization by educating their children in government schools. The new area of conflict start developing due to economic expansion: labor versus management. The biggest symptom was railroad strike of 1877. At this point government was firmly on the side of owners and management using force to suppress labor during violent outbursts. Author provides quite a bit of details about condition of former slaves and new forms of suppression used as substitute of slavery. At the North economic expansion included a huge doses of crony capitalism, political patronage, and spoils system, but it still was very successful. Part of this success was acceptance of hard money (gold) that assured financial stability for decades.

 The 20th President: James Garfield

Hayes accepted nomination on condition of one term only so Garfield was next republican in line, however assassination cut his presidency short.

 The 21st President: Chester Arthur: ON THE JOB; Civil Service Reform; Budget Surplus; FOREIGN POLICY; IMMIGRATION and POLITICAL PARTIES; The Farmers Movement; ENTREPRENEURS: Edison; Carnegie; Rockefeller; INFORMATION REVOLUTION; Charles Darwin; Henry George; ON EARTH AS IT IS IN HEAVEN; A Part of the Flow of History; Immigrants Choose Sides; Multiple Divides; Washington Gladden and the Social Gospel; LEGACY

Author presents Chester Author as effective and successful promoter of American ideas. He curbed a bit of crony capitalism by promoting civil service reform and cutting down traditional source of government largesse: non existing postal routs. In short it was nice and mainly uneventful presidency when prosperity ruled and future sides of new ideological battles where at inception not causing too much trouble.

 The 22nd President: Grover Cleveland: BOURBON DEMOCRATS and MUGWUMPS; INAUGURAL ADDRESS; DOMESTIC POLICY: Tariffs; Bimetallism; Help For Farmers; INDIAN POLICY; The Dawes Act; FOREIGN POLICY; WESTERN RAILROADS; The Inertia of Institutions; A Tale of Two States; Weather Science and the Era of the Cowboy; Cartels; CALIFORNIA and the OCTOPUS; The Rise of the Octopus; The Fall of the Octopus; THE INTERSTATE COMMERCE ACT; Guilds in the Wake; THE LABOR MOVEMENT; The Great Southwest Railroad Strike; Haymarket Riot; THE CAMPAIGN OF 1888;

Grover Cleveland was the first democrat to become president since before the civil war and as such he was pretty much in Jacksonian mold. Unusually he did not make money on political office that made his career very successful in prevailing anti graft mood. All in all he was pretty much a traditional liberal called at the time Bourbon Democrats, which means low taxes, individual freedom, non-intervention in economy. Nevertheless it was period of growth of monopolies supported by Congress through multiple legislative initiatives. It was also time of continuing growth of labor movement that was becoming more militant. In elections of 1888 Cleveland won popular vote, but lost in Electoral College to Harrison partly because of his support for free trade and low tariffs that was not popular with people.

The 23rd President: Benjamin Harrison: INAUGURAL ADDRESS; THE BILLION DOLLAR CONGRESS; The McKinley Tariff; The Sherman Silver Purchase Act; The Sherman Antitrust Act; THE GREAT SIOUX RESERVATION and SIX NEW STATES; BURY MY HEART AT WOUNDED KNEE; Opening the Indian Territory; Helping the Sioux; A Prophet in the West; FOREIGN POLICY: Hawaii and Samoa; Elsewhere; HOMESTEAD STRIKE; Frick versus Amalgamated Steelworkers; SOCIAL GOSPEL and CHRISTIAN SOCIALISM; 1885. Josiah Strong: Our Country; Edward Bellamy: Looking Backward; 1889. Jane Addams: Hull House; 1890. Jacob Riis: How the Other Half Lives; 1890. George Herron: The Message of Jesus to Men of Wealth; 1892. Francis Bellamy: The Pledge of Allegiance; Walter Rauschenbusch: Brotherhood of the Kingdom; The Social Triumphant, The Gospel Irrelevant;

This was the second case of somewhat inherited presidency: Benjamin was a grand son of William, the 9th president. The main issues again were tariffs and government spending. At this point republicans were for it and democrats against both tariffs and special interests feeding. With being initially in control of legislature republicans passed quite a few laws beneficial to their main constituency- businesses: Silver repurchase act and Antitrust Laws, which were designed pretty much to protect established companies especially railroads from competition. Harrison’s administration mainly completed 300 years long process of dispossession of Indians by opening Indian territories for settlement. It caused the last significant fight at Wounded Knee. Probably the most important ideological development of the time in America was continuing growth of labor movement with such outbreaks as Homestead strike accompanied by expansion of ideology of Christian Socialism. Harrison also continued American play with colonialism by annexing Hawaii.

The 24th President: Grover Cleveland: THE PANIC OF 1893; Tale of Two Railways; Eugene Debs and the A.R.U.; The Pullman Strike; The Rise of the Banks; FIXING THE ECONOMY: GOLD, TARIFFS, and an INCOME TAX; FOREIGN POLICY: Hawaii; Cuba and Spain; Richard Olnev and the Venezuela Crisis CARING FOR OTHERS: Fraternalism; Immigrants, Minorities, and Women; Medical Insurance; Advantages of Lodge Programs; Fraternalism to Paternalism; Other Historians; JURY NULLIFICATION; THE DEMOCRATIC CONVENTION OF 1896; Cross-of Gold:

After one term Harrison’s presidency democrats and Cleveland were back. However Cleveland’s small government attitude was going out of fashion giving way to massive government intervention in economy. Author provides a very interesting comparison between two railroads: one, Northern Pacific run by political entrepreneurs with financing using lots of government support was driven into the ground and another Great Northern run by business entrepreneurs with little to none government involvement was prosperous. Author, however, makes case against fairy tales libertarian interpretation of this case. He stresses that in both cases managers were eager to use all government help they could get and appropriate all government money they could get. The difference was that for business entrepreneurs the objective was to build railroad and make money by selling its services with government resources being a mainly a source of cost savings. For political entrepreneurs the objective was to make money by appropriating as much government resources as possible using railroad just as justification for resource transfer with very little interest if any in selling its services. Other issue was continuing growth of militant labor movement while in all confrontations government was still firmly on the side of property owners. At the same time many issues related to labor wellbeing such as medical and other forms of insurance, pensions and disabilities, education were resolved using voluntary organizations without government intervention. Finally the monetary issues of Gold versus bimetallism start getting to forefront of Democratic politics where they remained for next 20 years with passions of William Jennings Bryan keeping them out of power.

The 25th President: William McKinley: TWO McKINLEYS; THE ECONOMY FIRST, JIM CROW AT THE END OF THE CENTURY: Black Labor Suppressed; The Birth of Sundown Towns; THE SPANISH-AMERICAN WAR; The Cuban War of Independence; The Real Reasons; Retroactive Reasons: Burdens of the Victor; A Foreign Polio, Triumvirate: Roosevelt, Mahan, and Lodge; The Explosion of the Maine and Declaration of War; A Pacific Empire; Cuba; A Caribbean Empire; THE PHILIPPINE-AMERICAN WAR; Military Quagmire, Moral Quagmire; William Graham Sumner and the Anti-Imperialist League; ELECTION of 1900; Republican Party and The March of the Flag; Democratic Party; ASSASSINATION; LEGACY:

Author discusses two images of McKinley. One is maintained by majority of historians who see him as weak man under control of his top adviser Mark Hanna, and another one maintained by minority that he himself was a controller masterfully managing people and events. There was a new twist of long going saga of tariffs: some added flexibility to combine tariffs and protectionism with free trade trying to find the best accommodation for internal and external forces. Monetary policy remained firmly in support of gold standard and overall business interests. Anti-trust laws were used sparingly, while overall prosperity somewhat subdued labor problems. Internationally McKinley moved to Empire building with big investments in Navy, Spanish war, and American territorial expansion in Pacific. All these policies were good enough for relatively easy reelection, although it did required bringing Teddy Roosevelt to the ticket to assure votes in his New York bastion.

Author completes his Libertarian history of America at this point just before American move to progressivism that meant pretty much the end to the American Republic of limited government and nearly unlimited freedom and the beginning of the American republic of nearly unlimited government and limited freedom.


From my point of view the attempt made in this series of books to reassess American history from libertarian point of view is mainly successful, even if not complete. Too much of narrative is dedicated to American imperialist sins, but too little to American libertarian roots and how they withered under pressures of industrialization and phasing away of independent farmers way of life. The line of Hamiltonian republic versus Jeffersonian republic started strongly in first book, but later all but disappeared. I would also like to see a lot more of historical analysis of tensions and struggles between political and business entrepreneurs, including a very interesting and very American group of slave owners who clearly were political entrepreneurs whose business could not exists without violent structures of government to suppress freedom of slaves. Other than that it is clearly a great addition to Paul Johnson’s conservative history and Howard Zinn’s socialist histories of America.

20141130 Forgotten History: Rapture

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CHAPTER ONE: The 5tt President: James Monroe

JAMES MONROE: Monroe was the only president after Washington who actually fought in revolution from 1775 when he was 18. 1817 was the year when the new generation came to power. It was not only in Monroe in White House, but also Calhoun and Clay who become Speaker even earlier in 1812.

The main events and people of Monroe’s era included:

TRANSPORTATION REVOLUTION: The transportation revolution came with expansion of road building and most important with steamboats. There is an interesting story about initial Fulton’s monopoly granted by government for 30 years that slowed down development of steamboats until in 1817 it was legally broken and Vanderbilt created cheap and effective transportation network. Author stresses that technology was not enough and only free market opened way for new technology.

European Wars; John Quincy Adams; Henry Clay; John Calhoun; Andrew Jackson; Taking Florida: Here author reviews 4 other important players of the period and history of Florida acquisition mainly due to decisive actions of Andrew Jackson and despite Monroe undecidedness and Henry Clay’s attack in Congress and accusations in monarchical tendencies.

NATIONAL BANKING and THE PANIC OF 1819: Just before Monroe become president there was an explosion in number of banks from 117 in 1812 to about 250 in 1815. It was result of suspension of demand for exchange notes for species in 1814 to finance war. This suspension was lifted in 1817 causing move back to gold. It improved economy and provided for next bout of banks number explosion supported by the Second Bank of US. As usual it caused boom/busts cycle of 1819.

JOHN MARSHALL: McCulloch v. Maryland: This is review of a few cases establishing precedents under Marshall promoting Hamiltonian vision. Especially important was McCulloch in which Marshall established dominance of Federal government by rejecting Maryland’s attempt to tax local branch of the Second Bank of US. It was done by appealing to the power of people who established federal government as superior to power of states. It was initial successful attempt to deny relevancy of 10th amendment.

THE MISSOURI COMPROMISE: Unexpected Crisis and Compromise; Second Crisis, Second Compromise: The crisis started with Missouri petitioning for statehood as slave state. Since it would change balance of power, Maine was admitted as Free State to compensate. The compromise eventually included line to the Pacific dividing future territory into free north and slave owning south. At this point no civil war was conceivable because everybody accepted state’s cessation as constitutional right.

TOO DANGEROUS FOR WORDS: Tariff of 1816; Tariff of 1824: More contentions than slavery was issue of tariffs. In 1816 new tariffs were supported by Middle States, opposed by South and had mixed approach from New England where merchants wanted low tariffs and manufacturers high. By 1824 the tariffs champion Clay managed to raise them to 35% and start pushing “American system” of government support for infrastructure.

FOREIGN POLICY: Monsters to Destroy; the Monroe Doctrine: Foreign policy generally was not a big issue, but it still played role mainly in form of Monroe doctrine that demonstrated sufficient power of US to warn European powers to stay away from Latin America that at the time was in process of revolutions. Author also stresses the second part of doctrine, which is now completely forgotten: American would stay away from any conflicts in Europe.



Adam’s presidency started with Henry Clay using Congress to give Adams presidency even if Jackson won the election. This “corrupt bargain” doomed Adams’ presidency. Adams big government pushed for “improvements”, which inevitably led to corruption and waist. The main program of improvements at the time was construction of canals. Internationally there was Panama congress initiated by Bolivar in attempt to create Pan American space for free trade and cooperation. The idea did not work out due to resistance to any alliances.

Martin Van Buren: The Tariff of Abominations; Election of 1828:

Author dedicated quite a bit of space to Van Buren whom he considers an outstanding Jeffersonian with preference to small and effective government. The top issue was a tariff increase that was demanded by Northern manufacturers, accepted by West, and opposed by South with its export-oriented economy. Van Buren managed to convince all sides that Jackson is with them. Campaign was dirty as usual with all kind of sexual and religious accusations and ended with Jackson’s clear victory.

CHAPTER THREE: The 7th President: Andrew Jackson

THE PEOPLE’S PRESIDENT; The Petticoat War; This is a story of small semi-political war between loyalty and society opinion, Jackson’s loyalty to his men and society’s attack against wife of one of his men. Result was an initial trouble for Jackson’s presidency.

REFORM, RETRENCHMENT, and ECONOMY: The Maysville Road; TRAIL OF TEARS: The first attack against big government was to rain in corruption that was done by cutting out quite a few bureaucrats. Jackson’s mantra was: Constitution should be obeyed, States rights assured, Union preserved, debt paid, and direct taxes avoided. At the same time as repugnant as it was for Jackson he compromised on a number of government financed infrastructure improvements such as the Maysville road. Jackson also pushed through Indian removal. As cruel as it was it is hard to imagine how else it would be possible to prevent genocide that was continuously occurring in clashes between Indians and settlers.

KNELL OF THE UNION: Nat Turner and the Slavery Debate in the South; David Walker and William Lloyd Garrison: The slavery issue was getting worse day by day with loud abolitionist movement getting more and more power and Southern tranquility disturbed by Nat Turner insurrection. There is reference to internal southern debate about abolition of slavery. It demonstrated understanding that slavery will inevitably lead to restriction of freedom for people who are not slaves and it was obviously coming.

KING ANDREW THE FIRST: Cabinet Massacre; Power of the Presidency; NULLIFICATION and THE TARIFF OF 1832: The South Carolina Exposition; Calhoun Resigns; Webster-Hayne Debates; Aversion to Manufacture; Compromise Tariff and the Force Bill: The tariffs war continue divide country and achieved such level of intensity that South Carolina moved to nullification of federal laws. Jackson used combination of threats of force and compromise to resolve this crisis successfully, but issue did not go away.

THE BANK WAR: Suffolk Bank; Mandate; Pet Banks: The final and most important struggle of Jackson presidency was fight with the Bank and victory over it. A very interesting narrative about successful Suffolk bank that fulfilled clearing functions without federal government intervention supports an idea that government control over money supply is not such a necessity.

ONWARD CHRISTIAN SOLDIERS: A New Jerusalem: The Jackson presidency was also a time of Great Awakening leading to religious resurgence in America, creation of new denominations and expansion of religious activism.

LEGACY: Author compares Jackson with Cornelius Sulla who destroyed Rome in order to save it. Jackson defended republic by using non-republican methods and therefore created precedent that was later used for destruction of original American republic.

 CHAPTER FOUR: The 8th President: Martin Van Buren; ELECTION OF 1836; Jackson’s Third Term? Beyond Those Limits I Shall Never Pass: Author praises Van Buren as one of the most libertarian presidents. As the closest ally of Jackson he practically inherited popular presidency, however author does not agree with the view that it was Jackson’s third term. The point is made that it was Van Buren who to the great extent was behind Jackson policies and he maybe even prevented Jackson going to war with France over unpaid reparations. The huge merit of Van Buren was a strict adherence to constitution that author interprets as neutrality in foreign affairs.

RECESSION: The Panics of 1837 and 1839; Suffolk Bank and New England; THE INDEPENDENT TREASURY: The recession started soon after recession in 1837 when bank stopped redeeming paper with species, but after brief downturn come miniboom in 1838 followed by more serious downturn in 1839. Author credit recession to states excessive borrowing for various project especially Erie Canal. Van Buren rejected idea of federal assumption of state’s debt causing economic pain, but instilling some discipline in states. The bright spot was New England where Suffolk bank successfully controlled money supply preventing boom bust cycles in this area. The main economic efforts of Van Buren were directed to establishment of independent treasury and overall separation of economy from the state. Van Buren succeeded in creating Independent treasury that lasted until civil war and one thing dramatically different in narrative of this author from usual history is that he claims recession being relatively mild with overall losses of bank notes holders not exceeding levels equal to 2% inflation. The whole nearly 30 years period afterword author claims to be economically successful, while typical history claims to be period of chaos. Actual economic statistics seems to be supportive of this position: GDP growth was 3.9 from 1814 to 1840 and 4.9 from 1840 to 1860.

THE SLAVERY DEBATE: Petitions; Gag; Amistad: Issue of slavery keep getting more difficult with abolitionist movement expanding and the South responding by limiting free speech and expelling them, while North by physical attacks against blacks and abolitionists by the mobs. However both parties avoided raising the issue because both were active in North and in South so divide about the issue was within parties.

INDIAN REMOVAL: Second Seminole War; Trail of Tears: Van Buren continued Jackson’s policy of removing Indians out of way of American settlements expansion. There was Seminole war from 1836 to 1842 with nearly complete extermination of this tribe and at least 1500 loses by regular army.

SAM HOUSTON; TEXAS; President Houston: This period also included beginning of Texas problems with declaration of Texas independence in 1835. Both Jackson and then Van Buran rejected acceptance of Texas on constitutional grounds and to avoid war with Mexico.

MAY ALL HER PATHS BE PEACE: The Caroline Affair; Aroostook War: There were still issues with Canada related to clashes on the border from time to time and the borderline definition. Van Buren successfully avoided outgrowing of these issues into a war.

LEGACY: Author sees Van Buren as defender of Jeffersonian revolution promoter of limited state and individual freedom.

 CHAPTER FIVE: The 9th President: William Henry Harrison

Harrison was big government Wig and Hamiltonian. He won election by thoroughly avoiding declaring his principles and blaming Van Buren for recession. It also helped that bank supporting and wealth-seeking democrats moved away from Van Buren. However since he died one month after inauguration, the return to Hamiltonian big government policies had to wait.

CHAPTER SIX: The 10th President: John Tyler: THE BANK AGAIN; TARIFFS and DISTRIBUTION; TEXAS and A THIRD PARTY: An English Monkey Wrench; John Calhoun; LEGACY

Tyler inherited presidency from Harrison and at the time it was unclear if he is president or just a placeholder until next election. He managed to assert himself as full pledged president setting up a precedent that was later confirmed by 25th Amendment in 1967. The main issues were the same: bank, tariffs, and Texas. Tyler believed Bank was unconstitutional, but being a Whig was inclined to compromise. Clay, on other hand was not and pushed to full restoration of bank. As result Tyler vetoed bank restoration, but agreed to raise tariffs. An interesting dynamic developed with Texas. There was a problem admitting it in Union as slave state, but there was also a problem of leaving it independent. That was because Britain started moving close to Texas as its protector causing planters’ fear of future push of British abolitionists. This situation resulted in Southern champion Calhoun moving ahead with annexation. Overall Tyler turned out to be protector of Van Buren legacy of mainly Jeffersonian Union.

 CHAPTER SEVEN: The 11th President: James Polk: INAUGURAL; CABINET

MARK OF GREATNESS: Tariffs; Independent Treasury; Great Contradiction; Oregon; California;

Born after revolution in 1795 Polk was mainly political looser, but luckily for him stronger candidates Clay and Van Buren both declared against annexation of Texas going against strong popular will and by doing so removing themselves from competition. Polk was unusual president because he managed to make real everything he promised to do: lower tariffs, reestablish independent treasury, and annex territories from Mexico. Polk also was a clear supporter of slavery and author sees it as contradiction that Southern Jeffersonian freedom lovers were also supporters of slavery. Polk moved aggressively against Britain in question of Oregon getting to the brink of war, but then settling at 49 parallel.

THE MEXICAN-AMERICAN WAR: First Shot; Match-ups; Matamoros; New Mexico, California, and Northern Mexico; Quagmire; Secession; Wilmot Proviso;

All Mexico; On To Mexico City; Legacy of the War; Henry David Thoreau and Karl Marx; The Way Not Taken: Lysander Spooner; JAMES POLK’S LEGACY

It was different with Mexico where events developed in regular war. Author ‘s interpretation of this war is that despite it being wrong ideologically for republic, America with its democracy, relatively low level of corruption proved to be much more effective military than corrupted Mexican government and army despite Mexico’s numeric and moral superiority of defending their land. The new territories brought in by successful war proved to be a challenge to existing North-South compromise. The struggle exploded around Wilmont’s proviso that would forbid slavery on newly acquired territories. The proviso did not pass, but it did opened new fight between South and North. Eventually it destroyed old Whigs and opened way for creation of Republican Party.

Author also goes into philosophy bringing in Marx and Henry Thoreau: one proponent of nonviolence and another ideologically based violence mainly because both happen to publish their manifestos in 1848. Another writer he brings in is Lysander Spooner who wrote “The Unconstitutionality of Slavery” and argued that slavery could be removed without any amendment to Constitution. Obviously it was non starter with Southern elite since slaves where their main economic assets.


Author views American 30 years of American history before civil war as solidification of Jeffersonian vision of America. These years saw tremendous economic and technological development, but it occurred mainly at the North. Taylor came from planter background, but spent most of his life in military fighting Indians. As a military man he new and did not like war, consequently stopping potential expansion into Cuba. He defended status quo on slavery even if he believed that slavery is wrong. Author contrast behavior of human slave-owners such as Taylor and Jefferson Davis with racial hate of many abolitionists who often proclaimed this hate and saw abolition as a way to protect white lower classes against black labor. Taylor died in the middle of his term in 1850 just when statehood crisis started with Western states applying for entry as free states breaking down Missouri compromise and Southerners responding to this with cessation movement.

 CHAPTER NINE: The 13th President: Millard Fillmore: PLUMES AND SABERS;

THE CROSS; MILLARD FILLMORE; THE COMPROMISE OF 1850; Fugitive Slave Act of 1850; Slave and Freeman, North and South; Jury Nullification


Fillmore did not want and did not expect to be president, but that’s what happened. He, however, was a pretty good administrator so he managed country with minimal disturbance: no wars, no economic changes. He was not able to avoid issue of slavery and it start unraveling on his watch with the Fugitive slave act of 1850. The problem was that without North returning run away slaves Southern planters could not keep their thinking and walking property from running away. On other hand the act clearly violated rights of Northerners to speak and publish what they want, associate with whomever they want and so on. In short Southern slave owners had to invade Northern lives to save slavery in South.


Stephen Douglas and the Kansas-Nebraska Act; Jefferson Davis and the Gadsden Purchase; Abraham Lincoln Returns to Politics; Whigs Implode; Reborn As Republicans; DRED SCOTT and ROGER TANEY: Dred Scott; The Decision; ELECTION OF 1856

Pierce was a democrat politician with no special distinction. The main reason he won election was that he was Northerner and vague about slavery issue while his opponent was clearly anti-slavery. In foreign affairs Pierce wanted empire starting with annexation of Hawaii and Cuba. This was clearly stated in Ostend Manifesto of American diplomats on diplomatic conference in Belgium.

But of course the most important issue remained slavery. Author sees it more as a symptom than the cause of the coming clash. In his view it was clash of two cultures Cavaliers culture of the South with Puritans culture of the North. Both sides were fighting for freedom: North for free labor and the South for free trade. North wanted high tariffs to protect its business elite and internal improvements to provide business with public investment in infrastructure, while the South wanted low tariffs because it would lead to trade war in which their source of wealth – cotton trade would suffer. The fuel to this clash was added by dispute over which way to build transcontinental railroad and Kansas-Nebraska act that eliminated Missouri compromise. All these issues become red hot during Pierce presidency and he had no way to manage it.

 CHAPTER ELEVEN: The 15th President: James Buchanan: PANIC OF 1857

THE FORGOTTEN SECESSION; BLEEDING KANSAS; LINCOLN RISES: THE ELECTION OF 1860; WAR OR PEACE: The Riddle of Calhoun; Secession; War of Tariffs: The next president another Democrat – James Buchanan also was not capable to put Jeannie of sectional economic and political divide back into the bottle. He actually had another cessation to deal with: Mormons, but it was successfully dealt with using compromise since Mormons did not really posed threat to any of main fractions of American public. They just wanted to have their way of life and they were let alone delaying the resolution of most contention issue of polygamy until 1890.

A lot worse was situation with bleeding Kansas and dramatic polarization of the country that ended in election of Lincoln – the candidate absolutely not acceptable to the South. Author believes that in reality slavery issue was just a bogus and Northern business elite was ready to let the South to separate as long as it would agree to maintain high tariffs. The free trade on other hand was not acceptable. That’s why election of Lincoln who by no means was an abolitionist, but was a corporate lawyer absolutely adamant about high tariffs, made war inevitable.

 CHAPTER TWELVE-A: The 1st President: Jefferson Davis

CONFEDERATE STATES OF AMERICA: Constitution; Second Wave: It is highly unusual to include CSA as part of American history, but it makes a lot of sense. After all confederates were also Americans and they fought to defend their country that is the states they lived in. Author divides cessation into two separate waves. The first one was 6 Deep South states that decided to leave union because of slavery and tariffs. They model their constitution on US with only one significant difference: clear support for institution of slavery. However states of northern part of South joined only after Lincoln started war by refusing to accept separation and evacuate Fort Sumter. The following events that lead to war were considered by these states as Northern aggression.

GOVERNING THE CONFEDERACY: Cotton Communism; Conscription; Class Conflict within the Confederacy; FIGHTING THE WAR: Black Soldiers; Tears Spoiled Their Aim: What is interesting is practical rejection of American traditions in CSA when nearly all industries were nationalized, central planning implemented, military conscription implemented in much more severe form than it was on the North, individual freedoms also were suppressed much more severely. In short the civil war clearly demonstrated that seeds of future socialist shift were planted in American culture on both sides of divide.

 CHAPTER TWELVE-B: The 16th President: Abraham Lincoln

INAUGURAL ADDRESS: TARIFFS OR ANGELS? THE QUESTION OF WAR: Fort Sumter; Blockade; Militia Call-up and Second Secession; Stemming the Tide

Author makes quite convincing case that Lincoln’s objectives were not that much related to slavery as to assure high tariffs protecting wealth of Northern businesses that believed that they couldn’t compete against cheap foreign goods. These interests clearly override for him constitutionality of secession, protection of individual rights, separation of powers, as well as just about everything else in Constitution. In short author’s position is that the causes of war inalienably linked to sources of income and prosperity for ruling classes: slavery and free trade for southern planters and government protection of their businesses against competition for northern manufacturers.

THREE NEEDS OF OFFENSIVE WAR: THE FIRST NEED: MONEY: Control of the Money Supply; Income tax; THE SECOND NEED: SUPPRESSION OF RIGHTS: John Merryman and Roger Taney; Clement Vallandigham; THE THIRD NEED: CONSCRIPTION: Economic Elites and America’s First Drafts; THE WAR: Death and Destruction; Mid-Term Elections; Pope Doctrine: Collective Responsibility; another Pope Doctrine; Utter Extermination; THE WAR SHIFTS TO A HIGHER PLANE: Emancipation Proclamation; Gettysburg Address: Poetry, not logic; Second Inaugural Address: The history of civil war in this libertarian presentation narrates not that much about battles, offensives, and defensives as about violation of American constitution by Lincoln’s administration in all conceivable areas: nationalization of money supply, separation of powers, and individual rights. It also narrates about people who stand up to these violations and suffered imprisonments, financial ruin, and sometimes death. The point author makes is that if any of these two sides were really defending itself against aggression it would be no need for conscription and suppression

LEGACY: Author sees the main Lincoln’s legacy not in what actually happened, but in what he prevented from happening. He believes that if Lincoln allowed 6 Southern states to leave union, it would lead to free trade of South forcing the same on North and resulting in faster and better economic development. At the same time absence of fugitive slave laws would make slavery at the South unsustainable so reunion with slavery eliminated would be the most probable outcome.

20141123 Forgotten History: Foundations

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The main idea of this series of books is to review American history from different angle than it is usually done. Author wrote this book from libertarian point of view in contrast to leftist narrative of “A People’s History of the United States” by Howard Zinn and to conservative narrative of “A history of the American people” by Paul Johnson. The key idea of this book is the idea that American history is continuing struggle between Hamiltonian idea of mercantilist state and Jeffersonian idea of libertarian state. The first one is generally idea of big and powerful government that controls everything, interfere everywhere, and assure general wellbeing. The second one is the idea of small government limited to a few specific functions and weak enough not to interfere with Americans’ pursuit of happiness with free market providing for general wellbeing.


Series Preface: America’s Forgotten History Preface to Part One: Foundations

Part I covers period from earliest colonies through the presidency of James Madison in 1816. It goes through discussion of people who started future United States, culture and traditions they brought in from Europe, and legal arrangements they created after wining the revolutionary war. It also covers first four presidencies until 1816.

CHAPTER ONE: Prelude To America


The revolutions usually fail, but American Revolution was different. It came not from people striving for power they do not have, but from American colonists – people with lots of personal power who were feeling they are loosing this power to the king’s encroachment. In essence it was a conservative revolution to defend status quo.

JAMESTOWN and PLYMOUTH: Two original colonies represented two different strains of Americans. One- started by Virginia Company was formed by profit seeking aristocratic investors and individuals attracted by opportunities in the new land regardless of initial wealth or nobility; another one started by puritans seeking religious salvation in the new land and believing in theocracy and government enforcement of right behavior. Both colonies tried communal arrangements of production and both failed in it miserably moving to private ownership of the land.

PURITANS and CAVALIERS: Newly founded colonies also had huge difference in culture of individuals populated them. The difference came from the British civil wars. In Jamestown it was cavaliers who brought in prevailing cultural attitude and they quickly started develop aristocratic utopian society with slaves at the bottom providing manpower for production. In Plymouth however, it was puritans’ culture and attitudes that prevailed causing development in direction of bourgeois utopian City on the Hill.

ENGLISH ROOTS; ENGLISH CIVIL WAR; THE GLORIOUS REVOLUTION; The Dark Side: Central Banking, Collusion, and War: This is a very short retelling of English history preceding transfer of these people to America.


These are:

  1. Puritans 1630s from urban East Anglia to Massachusetts,
  2. Cavaliers 1640s from rural western Sussex and Wessex to Virginia,
  3. Quakers 1675 from Wales, Holland, Ireland, and Germany to Pennsylvania,
  4. Scotch-Irish and other borders in 1715 to Carolinas and later Appalachian.
  5. American Indians who actually got there first, long before anybody else and constituted important part of the mix.

Both Cavaliers of South and Puritans of North conducted involuntary migration of African slaves. The final or actually

THREE EMPIRES BATTLE FOR A CONTINENT: The Tiny Spark; Monongahela, The Northern War; William Pitt; The Tide Turns; Pontiac’s War: This is quite detailed narrative of 7 years war as it was conducted in America. The most important thing: Anglo-Americans had significant numeric superiority over Franco-Canadians resulted from French being mainly trade oriented while British were land oriented. Obviously agricultural settlements in moderate climate produce much more people and resources then trade posts in areas with cold climate. Side effect was that British-American agriculturists pushed American Indians out of their areas while French did not consequently causing Pontiac’s war that temporarily pushed frontier back east.

TOWARDS REVOLUTION: From libertarian point of view the causes of all revolutions are similar: government plundering going beyond of what people agree to accept. In case of Colonial America it was the key issues were:

  1. Fiat Money: America experienced growth and there were shortages of money, but British Tories were not about to promote inflation while Congress would happily do just that. The fiat money issue remained in the center of American political struggle ever since then with Hamiltonians supporting fiat and Jeffersonians objecting.
  2. Order, Mercantilism, and Taxes: In addition to money other issues start boiling over between colonists and Britain such as: political scramble between royal governors and colonial assemblies, unresolvable contradiction between colonial’s wish for unlimited land grabbing and British wish to accommodate Indians by limiting westward expansion that would require constant military expenses to defend colonials, and unwillingness of colonials to be on receiving side of British mercantilism, that restricted business development in America to promote British manufacturing.
  3. Taxation Without Representation: Eventually all these tensions exploded under philosophical ideas of ineligibility of taxation without representation. It was definitely a funny reason, but it worked. 

CHAPTER TWO: What Kind of Government?

This chapter is about formation of American constitutional order and government that was based on key concept of natural rights. It briefly goes through revolutionary war, key points of constitution and modern views on it. Here are key points: of the narrative:

MYTHS OF MILITIA: Both sides were driven by ideals: Americans by idea of natural rights of British and Hessians by honor. Militia was generally not ineffective, but it was dependent on circumstance of fight: good defending home, not very good away from home. In both cases good military training is precondition for effectiveness anywhere.

REVOLUTION: The Baffle For New York, Turning Point, Saratoga and Alliance With France, The Southern Strategy: A very short restatement of history of revolutionary war with no points made that would be different from traditional narrative.

AMERICA’S FIRST CONSTITUTION: Perpetual Union, Life Under the Articles, Annapolis Convention and Shays Rebellion: This part is somewhat unusual in attention paid to Articles of Confederation that was the first American Constitution approved by Continental Congress in 1778. It become law in 1781 and lasted until 1789. It was based on assumption that only small states can be democratic, therefore the Union should have little central power to avoid despotism. Significant attention assigned to discussion about perpetuity of the union. The point is made that at the time perpetuity of union was a hope not imperative and Civil War to keep the Union would be inconceivable for contemporaries. There is also discussion about Annapolis convention of 1786 that cleared way for Philadelphia Constitutional Convention next year and Shays rebellion that prompted wide believe that new constitution is a necessity.

GATHERING IN PHILADELPHIA: James Madison; Alexander Hamilton; States Rights vs. the Philosophy of Large Systems; Checks and Balances; Slavery;

Religion; Defense; The Executive; The Law of Nations; Commerce; The Bill of Rights: This is review of personalities who played major role in convention and where pushing in two directions: confederation of local democracies with minimal central power vs. benevolent central power embracing local democracies in firm grip. The downgrading of local democracies to provinces was not feasible at the time. An interesting discussion on checks and balances is related to this. It pertains to checks and balances not only vertically between branches of power, but also horizontally when power of federal government was balanced by power of the states as separate and competitive centers of all-important solutions. No important solution should be initiated at the federal level. Everything was supposed to be tested at the state level and then move up to the center when enough states joined the solution. Other parts of constitutional discussion concentrate on how far away practice mode from original ideas in every area discussed.


The Cynical View: The Constitution is document created by bunch of slave-owners to protect and defend their position in society.

Freedom or Democracy: Constitution was designed to elevate friction between freedom and democracy, which is by definition suppression of freedom for minority. Contemporary development went way too far in promoting democracy while giving too much power to the central state that automatically means decrease in individual freedom.

A Living Constitution: This intellectual idea basically degrades meaning of the Constitution to text open to infinite modification by just interpreting its worlds to whatever meaning an interpreter is looking for. For example modern interpretation of “general welfare” makes enumeration of federal government powers absolutely meaningless because it gives power to do whatever president and Congress want to do without any limitations.


The first president presented here as mainly pragmatically inclined man who did not bother himself with politics and ideas too much. Generally his presidency was on the side of Hamiltonians creating Bank of USA, siding with speculators in revolutionary debt issue, and generally supporting active and powerful federal government.


This is description of Adams personality, presidency and its most noticeable events:

THE XYZ AFFAIR: The story of French demanding bribes just for opening door for negotiations about attacks of French navy on American shipping. Instead of bribes Adams start building ships and armed merchants.

THE ALIEN AND SEDITION ACTS: These were 4 laws intended to limit immigration and naturalization especially for French and Irish who were bringing in ideas of French revolution. It also imposed restrictions on freedom of speech in order to prop up government power. Several dozens of authors and publishers were imprisoned.

Jury Nullification: Here authors goes into details of Jury notification he considers very important right that was slowly suppressed. The meaning is that jury makes judgment not only on guilt or innocence, but also on legality of law itself. While it still formally exists as check on judicial power in reality it was neutralized by judge’s instructions.

The Trial of Matthew Lyon: Lyon was a congressman accused for publishing seditious letters. While being in prison he was reelected and used the privilege to continue write letters against power.

Return To Monarchy? This is story of Hamiltonians attempt to move to neo-monarchy by changing constitution to make president serve for life. The secret Rose Bill was intended to do this and also create a standing army. It also included provision for Congress to appoint 13-man commission to review validity of votes giving party in power control over election results. The attempt failed due to exposes published from underground.

State Nullification: Kentucky, and Virginia Resolutions: The first years of republic demonstrated that vertical checks and balances are not working and states start quickly loose power to federal government. In response Kentucky and Virginia asserted states’ nullification rights in resolutions.

PEACE: Adams decided to make peace with France despite opposition from about everybody.

THE ELECTION OF 1800: It was the most difficult, dangerous, and important election ever. It proved to be the test of America’s ability to survive as constitutional republic with regular and peaceful change of powers.

JOHN MARSHALL: He was creator of powerful Supreme Court. According to constitution the power of court was limited to the expression of legal opinion. Marshal managed to convert it into power to overwrite any legislative or executive action by declaring it unconstitutional. Eventually it made Supreme Court into unelected final arbiter of decisions capable to put break on any actions ideologically repugnant to majority of its members.

CHAPTER FIVE: The 3rd President: Thomas Jefferson

THE SUM OF GOOD GOVERNMENT: The main point was reconciliation: need to accept both republican principles and federal government. No need for standing army since people defend their power, no sedition acts: freedom of speech includes freedom of error, government should restrain people from injuring one another, but leave them alone otherwise,

THE BARBARY PIRATES: A Presidential War; Preble’s Boys; To the Shores of Tripoli; What America Accomplished: This narrative of story of this mini war against Barbary pirates is somewhat different then usual. It is not triumphal expedition, but rather story of half-hearted action with extensive use of adventurers and locals who were later betrayed and damped. There was also no victory that would stop attacks and/or payment to barbarians. In 1807 pirates started again attack ship and USA quietly resumed paying tribute to prevent attacks. It lasted until end of Napoleonic war in 1815.

The Louisiana Purchase; The Black Napoleon; Constitutional Concerns: Louisiana was a very nice accomplishment, even if unconstitutional. An interesting event stressed here, which usually not mentioned that much, is revolution on Haiti and its success in repulsion of Napoleon’s army there. This event convinced Napoleon that he does not have enough resources and it better to get money in exchange for formality. It is quite possible that if Napoleonic war ended differently, the Louisiana purchase would be considered a blunder of providing help to aggressor who got stronger as result and then come to take back what he “sold”.

FIRST TERM ACCOMPLISHMENTS: Practically elimination of internal taxes, decrease in size and power of government, enforcement of free speech and rejection of sedition laws.

THE GODS OF FORTUNE: All above gave boost to prosperity, plus Jefferson managed to somewhat successfully avoid entanglement in Europe’s Napoleonic wars.

DESCENT INTO TYRANNY: Threat, Confusion, and Anguish; Embargo; Improving the Nation; SECESSION and NULLIFICATION: However he was not able to stay completely out. The reason was British huge Navy expansion for which they needed sailors and Americans’ impression was a good source. On other hand, widely trading American merchant fleet also needed sailors and guys who escaped British Navy also were a good source. Eventually tensions with Britain grew to the point when British stop respecting neutrality on the sees and Jefferson responded with embargo, which pretty much caused more harm to America and led to a slight push for nullification and even secession in Northern states. It failed, causing practical disappearance of Federalist’s party.

THE ELECTION OF 1808: Jefferson selected Madison to inherit his as a president and election was quite easy

HISTORY OF HISTORIES: At the end author reviews historians’ attitude to Jefferson and concludes that Jefferson usually got negative rap from historians mainly because ideologically they typically are lovers of big centralized government, while Jefferson moved country to decentralized government structure, some would even say he moved it in libertarian direction.

CHAPTER SIX: The 4th President: James Madison

THE FIRMIST BULWARK OF REPUBLICS: Madison came up with 16 core believes for his administration that allowed him to establish goals in all main areas:

  • Internationally: no intervention into others’ business and rejection of intervention into ours;
  • Relationship with states strictly within constitution with use of enumerated powers, but everything else left to states;
  • Strict adherence to individual rights especially first amendment;
  • Fiscal responsibility: low taxes and no government debt;
  • Military: limited army and preference for militia for defense;
  • General wellbeing, roads, science and such: promote within limited powers;
  • Indians: help them to move to civilization.

THE NEW CABINET: Except for Gallatin and Monroe, Madison allowed congress to define cabinet leading to internal squabbles.

WEST FLORIDA: In between Napoleon and Spain Florida become ungoverned and declared independence that quickly followed by request to join USA, which Madison obliged without any constitutional authority, same way as it was with Louisiana.

BUILD-UP TO WAR: Taking A Friendly Nap; Assassination; Tecumseh; The New Generation: The tensions with Britain over sailors increased. An interesting fact was that 1/3 of all American sailors actually were British so it is quite understandable that British raided American ship to capture sailors. At this point author stresses his disagreement with traditional interpretation of prewar period. He believes that Madison and Jefferson embargo worked as intended and British merchants put pressure on government to such extent that it explains assassination of prime minister. Also somewhat unusual is attention allocated to Tecumseh war. It presented not as insurrection, but rather as an attempt to create massive coalition of Indian tribes to fight European Americans invasion of their homelands. Eventually it failed due to technological and population advantages of Americans. Another interesting interpretation of events is that America moved to preparation for the war 1812 as aggressor in search of conquest of Canada. Obviously as aggressors American leadership was not that qualified since there were no significant investment into military preparation.

THE WAR OF 1812: Conquering Canada; Michigan and Tecumseh; Redemption at Sea; The War For the Lakes; Andrew Jackson and the Creek War; The Empire Strikes Back; The Battle of New Orleans; The Hartford Convention; The War’s First Lesson: The description of war of 1812 is also not exactly conventional. First of all the credit for saving Canada from American invasion goes to Tecumseh. The naval victories on the lakes presented as key to the following successful defense of American North against British and Indian counter invasion. Especially stressed is disarray and incompetence of American generals. The success came when incompetents were weeded out and substituted by middle level officers. On the South war theater Andrew Jackson successfully destroyed Creek Indians and fortified Mobil and Pensacola making British movement against New Orleans quite complicated. The British success in taking and burning Washington is presents as of little military but huge political and moral consequence. It inflamed American fears of going into prolonged fight against British Empire and even loosing independence therefore greatly increasing willingness to fight. At the same time with not enough forces to take fort Henry and move into Baltimore and farther inland it caused no serious danger. Quite a bit of attention given to the fact that American started to fight for real only when they felt they are under attack from aggressor. From this point of view the American anthem, born then and there, is reflecting American creed of military defense as fight of free militiamen (not conscripts) to protect their land and way of life. The battle of New Orleans presented as important factor making peace treatment to stick and stopping New England noises of secession produced at Hartford Convention. Author challenges traditional interpretation of the war as demonstration of ineffectiveness of American believes in defense by small professional army augmented by militia and need in big standing army. He claims that militia did good when it was well trained and used in defensive situation. Its ineffectiveness in many engagements was caused either aggressive character of war in initial actions against Canada or just poor equipment and training.

FINAL DAYS: The Bank of the United States; Internal Improvements:

The end of Madison presidency presented move away from Jeffersonian ideas with authorization of The Second Bank of United States and significant move of resources into government controlled “improvements” of roads, communications, and canals. This was the last presidency of revolutionary generation leaders: Washington. John Adams, Jefferson, and Madison. The next was generation of children of revolution Jeffersonians: Monroe, Jackson, and Calhoun; and Hamiltonians: John Quincy Adams, Webster, and Clay.

20141114 Kidding Ourselves

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The main idea of this book is nicely expressed in introduction: It is about power of deception and/or self-deception, placebos, and similar things. The most important inference from this collection of cases and experiments is that power deception is not just inherent part of human nature, but that it is often has a positive character helping to handle complexity of life on a “good enough” basis by maintaining illusion that we are in control even if we are really not.


PART I. THE POWER OF NOTHING: Placebos, Mass Hysteria, and Fatal Delusions

The Medicine of Imagination

The chapter starts with history of Mesmer who mesmerized audiences providing treatments from everything until special commission with participation of Ben Franklin. As usual this paragon of American common sense easily disproved power of mesmerism with experiment, but nevertheless the case clearly demonstrated power of believe. This reference to history follows by report on contemporary experiments with placebo that demonstrated high power of believes. Another interesting observation is impact of psychological condition of person on perception of pain. It presented using example of soldiers who were severely wounded, but were nearly painless from excitement and happiness because the wound meant a ticket home and end of war for them. In 1956 Dr. Beecher published research, which demonstrated that pain has meaning and its severity depends on psychological condition.

The Human Stampede

This chapter discusses human herd behavior when people feel and see thing not because they exists, but because other people do the same. It starts with the case of town of Mattoon Illinois where in 1944 epidemics of smelling strange smell occurred. Then it goes to discussion of monkeying behavior such as contiguous yawing and higher level of susceptibility to such things among females. At the end chapter demonstrates that herd behavior could extend even to the level of copycat suicides as it did happened after death of Marilyn Monroe.

Fatal Instincts

This chapter presents a number of cases when people dying for psychological reasons only. It includes broken heart when something happens that makes life meaningless for the person such as death of long-term partner, curse by some magician that person believes in: like “boning”, brainwashing, and learned helplessness observed in experiments with animals and in humans in real life. Martin Seligman extensively researched it.

 PART II. THE EYE OFTHE BEHOLDER: Perception, Expectation, and the Lure of Superstition

Dial E for Expectation

This is about selective perception and change in performance based on expectations. In short people see what they expect / want and do not see what they do not expect and do not want. The cases provided are from literature, but more interesting cases are from test result which varied depending on priming. Students primed as “gifted” produced better test results. For selective perception cases from sport competition, experiment with gorilla on the field, and medical diagnosis is provided. The very interesting case of career made on false analysis and political correctness provided using Steven Gould and his famous career making book “The Mismeasure of man” in which he rejected skull measurement results of Samuel Morton in regard to size of skulls depending on race. Original finding was that size is different with interpretation of this as evidence of superiority / inferiority of races. Gould’s build career on falsely rejecting measurement results using statistical methods in order to prove that races are equal. The repeated measurement 30 years later proved that Morton was right and skulls are different. It is a great example of politicized pseudo science. The superiority / inferiority idea was proved wrong by 100 years of human history which produced outstanding individuals of all races, while use of skull size as proxy for intelligence is incredibly naïve, but at least in XIX century they did not falsify measurement to fit ideological doctrines.

True Believers

This is more detailed look at works of mind of true believer, how it processes information, and how it manipulate facts to fit into preset system of believes. Examples are from medical treatment by bleeding that probably killed more people than any other method of medical help, logically similar economic stimulus of Keynesian economists (take money from productive people to give in to unproductive government works very similar to letting out blood from striving organism). It also includes case of people believing that taxes are too high despite marginal rate going down (author obviously has hard time understanding that 40% income tax that one forced to pay is a lot higher then 91% nominal tax with lots of loopholes that nobody really pays). Another case of author’s political views interfering with analysis is statement that people do not see benefits they get from government and claim self-dependency while getting social security or Medicare. Author seems to have problem to understand that if these people worked long enough they were forced prepay for all government benefits and in such way they would not necessary agree with. On other hand all this is a good confirmation of blindness due to believes.

Control Freaks

This chapter is discussion of very good observation that normally people want to be in control, even if it is seldom possible. The cases he provides are non-working buttons to close doors in elevators (actually they usually work), money spent on supplements, vitamins, diets, and financial advisors (these usually do not work). Also an experiment with young students visiting old people in nursing house provided interesting results. The conditions of old people visibly improved when they were in control of these visits. This follows by other results confirming that being in control of situation makes people to be healthier and live better and longer. Obviously it could not be without mentioning the famous study of British civil workers whose wellbeing strongly correlated with their place in hierarchy: the higher one in hierarchy, the healthier he/she is.

Lucky Charms

This chapter is about different ways to obtain control over situations that are not really controllable such as religions and superstitions. As far as it is known, nobody excluded from attempts to control live with lucky charms and things like that. I guess everybody who ever had difficult exam or was involved in military fight, or had any other experience in important and difficult situation with unknown outcome can confirm that signs, lucky charms, and things like that are used extensively regardless of people religious believes or lack thereof.


Drunk with Power

Being a liberal, author chose to use Gingrich as an example of a person who was dramatically changed by power to the worse. Obviously much more recent and more disgusting example is Obama who went power crazy to the point of stepping all over constitution. Needless to say that any research that was ever conducted confirms a common knowledge that power makes people over confident, neglectful to other people opinions and wellbeing, and prone to illusion of great overestimation of their power and abilities. An interesting find comes from research of use of power priming in negotiations. Individuals primed to feel powerful paid a lot less attention to reputation of other side than people who were primed to feel powerless.

It Can’t Happen to Me

This chapter is about tendency of successful people to overestimate their ability to control events and as result become prone to spectacular failure coming from excess of optimism and underestimation of risk. The chapter includes a charming statement from Amos Tversky: “People study artificial intelligence while behavior economics studies human natural stupidity”. Examples of overconfidence here include: doctors not washing hands, individuals prone to sexually transmitted diseases, funds manager making high risk decisions, and women who fail protect from unwanted pregnancy.

Enduring the Blizzard

The last chapter looks at the issue under a different angle. It states that all these illusions and self-deceptions are quite possibly a very useful tool developed by evolution. Overestimate of possible rewards makes people to work harder, take more risk, and eventually strive to obtain low probability high value results. It comes down to research confirming triviality that moderately unreasonable positive attitude make people healthier, wealthier, and more satisfied with their lives. Big help also is mental rewriting of expectations when results fall below original expectation. Good example of premed woman in 30s who due to depression failed to complete studies and become just a housewife. Asked about disappointment 50 years later she stated that she never wanted to be a doctor so there was no disappointment. The final example in this chapter relates to sexual selection when 100% is looking for above average and 100% find somebody good enough to pair at least for a while.


I think it is quite valuable presentation of various cases of disconnect between human perception of reality and actual reality. It is impossible to deny that all variations from power of placebo to statistics and math denying believes do in fact take place in real life and goad behavior of lots of people. What is interesting however that in vast majority of cases individuals have and apply these believes in areas that are not main areas of their activity or do not impact this activity per se. I guess my point is that in areas of professional involvement people have no choice, but to learn what is reality and how accommodate to it while in areas that are new for them people implement heuristics at the “good enough” principle because they do not have time and opportunity to experiment in order to find out what reality is. In short behavioral economists, economic psychologists and so on overestimate impact of such self-deceiving patterns on real life. The vast majority of people who actually do things from growing food to making steel, to programming computers actually have no such luxury because if farmer gets convinced that he can plant seeds in the winter, steelmaker that steel could be produced at low temperature, and programmer that whatever is output it is what it should be we’ll have no food, no steal, and programs would not work. The triumph of science means that areas of false believes is getting smaller and smaller all the time and necessity to put on these believes the label of science, therefore opening them to demand for falsification statement makes it more and more difficult to promote. Good example of this difficulty is denial of genetics by “Progressive Soviet Science” in 1950s and promotion of catastrophic global warming by “Progressive Western Science” in 2010s. In both cases government financed scientific establishment put lipstick of science on the pig, but could not convince that it is a beauty.

20141107 Carnage and Culture

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This book is about interconnection between culture and military success of the people. Specifically it is trying to explain the fact that over 2000 years numerically smaller western armies won multiple battles and engagements with practically all other competing groups. The main explanation for this fact provided in the book is that culture of perceptually free and independent property owners defending their property and families produces highly organized, disciplined, and technologically superior military, generally undefeatable on the home turf. Moreover, spillover of this quality into mercenary troops produced highly successful conquerors and colonizers who were capable to basically subdue the whole world by the end of XIX century. The army produced by western culture has no serious opponent except for another western army and in this case carnage is extremely high. Correspondingly military produced by other cultures with complete suppression of individual where there is no notion of freedom and personal property produce inferior armies where lack of discipline, organization, and technology have deleterious effect on individual bravery, sacrifices, and even tactical genius of leaders.



This is review of a few specific battles across 2500 year of history that demonstrates qualitative difference of Western way of war and its special lethality.

ONE – Why the West Has Won


It starts with Anabasis – the history of 10000 Greek mercenaries who in 401 BC were hired by Persian king and wind up far away from home without any support when king died. They managed to march back through 1500 miles of hostile territories winning all their battles with little casualties. The point is made that while these Greeks were thugs, their culture provided for democratic method of decision making, conscious understanding by each man his objectives and duties, superior camaraderie and discipline, and superior military technology. The same qualities were demonstrated throughout 2500 by different western armies that consistently won battles against numerically superior armies of non-westerners.


The war in this book is treated as expression of culture that defines what kind of people constitute army fielded by the society, quality of their arms, and most important their behavior during the battle. Author selected a number of battles for review with diversity of place, type, and outcome to analyze specifics of Western way of war.


The first order of analysis is to establish reality of western military preeminence. It is done by looking at cases when western armies lost and confirming that nearly all of them characterized, by numerical superiority of non-westerners, their possession of military technology developed by westerners, motivation superiority when non-westerners often defended their land, while westerns were colonizers with little support from their own population. Author reviews and rejects explanations such as Jared Diamond’s superiority of western geography providing advantage despite inferiority of western people or common explanation by superior technological advantage due to west first achieving industrial revolution. The idea of inherent inferiority / superiority of populations is rejected out of hand, geographical explanation dealt with by pointing at superiority of geographic endowment of Egypt and Mesopotamia, and technological superiority reason by pointing to initial technological superiority of China in ships, guns and just about everything else.


The key to western military superiority is psychology of individual soldier who is culturally conditioned to fully believe that he is voluntary fighting for his own, his family, and his clan’s freedom and prosperity. These abstract ideas may or may not be consistent with reality, but they define soldier’s behavior in the battle.

PART ONE – Creation;

This part is reviewing 3 key components from which western way of fighting grew out. These components are Freedom, Preference for decisive battle, and a special quality of troops as citizen-soldiers.

TWO – Freedom–or “To Live as You Please”

The TWO is about naval battle at Salami in 480BC when Greek fleet destroyed Persians despite huge numerical disparity. The main point here is made that free men make much better fighters the slaves. The reason being that free man has habits of live conductive for initiative, quick change in behavior to accommodate to changing circumstances, and self-reliance in decision making. Author also specify meaning of freedom:

  1. Freedom of speech with two different meanings: to be able to say what one wants and to be able to speak publicly. This freedom leads to better consideration of option and diversity of ideas providing for much better considerations then lack of freedom when only opinion of superior is heard with no opportunity to challenge it if it is erroneous.
  2. Government with consent of citizenry. The free choice of action makes individuals much more prone to stick to it.
  3. Economic freedom and property rights, which provide for high battle morals because the fight is for wellbeing of individual and his family.
  4. Freedom of action that provides for highly diverse trial and error probes leading to finding better tactical solutions in the battle.

The legacy of battle is survival of unusually individualistic western civilization and confirmation of its military superiority over despotic collectivistic civilizations.

THREE – Decisive Battle

This part is about battle at Gaugamela 331 BC when Alexander won against Persians who had not only superior numbers, but also superior cavalry. The main point here is that Western way of war is to seek decisive battle with annihilation of losing force. The key is not a formality of the battle, but annihilation of the enemy and removal of any options for future resistance in contrast to traditional tribal wars where the objective is to identify a winner with minimal losses and destruction on both sides. The main method of achieving victory is combination of maneuver with ruthlessness. In short the western military approach was to create local superiority both numerically and technologically and annihilate subset of enemy troops, then quickly repeat it in another place with another subset. The net result is that at any given time in any given encounter western army has overwhelming superiority and chip out key pieces of enemy force until it is defeated. In such situations the ability to act independently and decisively achieved due to the quality of troops is a necessary condition. Such quality is achieved through civic militarism of relatively free and independent farmers who take arms consciously to defend their way of life and families. It is difficult if not impossible to achieve with an army of slaves.

FOUR – Citizen Soldiers

This chapter continues discussion of military qualities of army of citizen soldiers using example of western defeat at Cannae 216 BC. Interestingly the point of this chapter is somewhat contradictory, but also complementary to the idea of decisive battle. It is an idea that western way of war is not to accept defeat until it is final. Despite being massacred at Cannae due to poor generalship, Romans raised new legions, analyzed and corrected mistakes and keep coming back at Hannibal until they eventually won. There is also a discussion of the structure and method of fighting of Roman legion that made it such a formidable force. One of the most important features was discipline and well thought through and trained for process of fighting. Every soldier knew what to do in the process of battle: through spear, engage with short sword, move back to form next line, and so forth. Also important was synchronization of action that significantly increased their effectiveness. Very interesting note from Josephus about this: “their training maneuvers were battles without bloodshed and their battles were maneuvers with bloodshed”. Finally, lots of attention is paid to Roman soldier as citizen, which is a person with clearly defined rights and responsibilities, which are not subject of change by leaders.

PART TWO – Continuity.

The second part is reviewing the next layer of western way of war that makes it so lethal: Preference for infantry as the core of the military structure on land. Technological superiority initially based on specific features of western culture: curiosity, constant search for new / better solutions, and easy adaptability of such solution even if they are foreign and contradict to tradition. Finally it reviews impact of industrial revolution as product of western culture that tremendously increased technological capabilities of western armies.

FIVE- Landed Infantry

This chapter based on battle at Poitiers 732 against Islamic army discusses western infantry as one of the core reasons for military advantage. It is linked to the nature of western soldier as a member of propertied middle class wealthy enough to have good infantry equipment, but not wealthy enough for heavy cavalry. This is enmeshed with high requirements for discipline because cavalry is useless against disciplined group of heavy infantrymen, but would easily defeat in unorganized one on one encounter. Once again western way of war presented with stress on technology, group discipline and incentive with lower value put on individual brevity and/or numerical superiority.

SIX – Technology and the Wages of Reason

Battle for Mexico City 1520 was used in this chapter to demonstrate qualitative difference between Aztec and Western military. Aztecs’ military method while very effective in American environment was limited by its ritualistic character, centralization, and lack of both initiative and discipline. Conquistadors’ military method was hugely opportunistic with no qualms about rules, ready to use whatever works however unethical and/or unusual it was. Existing technological advantage provided by scientific superiority of Europe made it all, but inevitable that conquistadors would win any military encounter with reasonable ratio of participants. Obviously inadvertent use of biological weapon of smallpox assured that this ratio would not be completely overwhelming.

SEVEN – The Market–or Capitalism kills

In this chapter the naval battle at Lepanto 1571 where European coalition fleet won over Ottomans is used to discuss financial and capital investment side of war making. As usual reason for victory was superior technology and discipline of Christians despite of inferiority of their numbers. However while Christian fleet had inferior number of ships and people, the number of canons was much higher and quality of ships and weapons by far superior. The point is made that this superiority came from new economic system capitalism that dramatically increased level of innovation placing western military power into position of such technological superiority that no other culture was able get even close to until the raise of Japan in XIX century.

PART THREE – Control.

The last part is dedicated to the quality of individuals that typically constitute western fighting force. These qualities: discipline, individualism, and dissent / self-critic are critical for military success because they dramatically increase flexibility, adaptability, and ability to learn from error that are necessary in unpredictable situations of battle;

EIGHT – Discipline, or Warriors Are Not Always Soldiers

Zulu War; Rorke’s Drift 1879. This is a very interesting episode of Zulu war when within 2 days British troops experienced defeat of relatively big force that followed by victory of much smaller force against the same enemy. In both cases British inflicted disproportionally high damage on opponent, but in the first case they lost due to tactical incompetence of leadership, while in the second case the adequate leadership provided for victory. The chapter reviews Zulu war and overall features of colonial conquest. The stress is on match between individual bravery combined with lack of discipline in Zulus, with high level of discipline of British troops typical for western military tradition.

NINE – Individualism

Midway 1943. This battle is used to demonstrate superiority of western way of war even in conditions when enemy in this case Japanese Navy was technologically as good or even better then American Navy. Author makes case that victory was obtained to significant extent due to the fact that American fighters were much more inclined to act based on individual decisions with little fear for punishment if decision turned out to be wrong. Contrary to this Japanese counterparts were restricted in their action by culture of compliance with rules and norms and fear of making a mistake.

TEN – Dissent and Self-Critique

The final battle reviewed in this book is Tet offensive in Vietnam in 1968. This battle was won by all conceivable military parameters, but lost in the court of public opinion that eventually led to America loosing this war. Somewhat contrary to usual approach author not only criticize media for this loss, but also praises it for exposing the lies and errors of leadership to the American public. The point is made that such critic, even if devastating, is one of the main strengths of western way of fighting because it provides for much better error analysis and improvement opportunities then other cultures in which critic of leadership is severely punished. However author accuses media in one-sided presentation of events and it was mainly the side of communist propaganda.


It is impossible to deny lethality and effectiveness of western way of war. However in my opinion the direct impact of culture on soldiers’ behavior as cause of victory is somewhat exaggerated and technological causes somewhat understated even if author mentions unstoppable Mongols who all but conquered the world, but could not produce anything beyond superior military power and consequently had relatively low staying power. As of now, no military can compete with western forces, but technology provided for such powerful weapons that individual qualities of soldiers and even group coherence are not as important as they used to be so a small group of leaders and soldiers could use WMD to achieve whatever objective they want to achieve as long as they are not limited by humanitarian considerations. This fact creates a dangerous situation for West, which being the cultural source of humanitarian considerations could not be able to use WMD when threaten and would be inclined to surrender rather than devastate the world. However I am optimistic that huge western technological superiority and cultural conquest of potential enemy population will lead to eventual elimination of war as tool of human interactions. However until it happens this tool should be used decisively and effectively to avoid huge human suffering from low intensity conflicts that west allow simmering due to the false humanitarian considerations.

20141102 Rules for Radicals

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Alinsky’s main idea is that American society divided into Haves, Have Little Want Mores (middle class), and Have-Nots. He was firmly on the side of Have-Nots and sought to empower Have-Nots to transfer resources from Haves to themselves. The book is philosophical, moral, and practical discussion on why the revolution should occur and how to promote it using opportunities presented by democratic character of society. Alinsky does not see this democratic character as absolute and he does not attempt to hide that. He believes that as soon as Have-Nots took power any moral and democratic niceties should not bind them.

The biggest part of book is dedicated to practical themes of preparing organizers (they used to be called revolutionaries) and how to organize masses to achieve objectives: mainly resource transfer from Haves and Middle class to Have-Nots. Alinsky, however believes that Have-Nots could not achieve power without attracting a significant part of middle class and he convinced it is possible by discrediting American dream of material prosperity in the eyes of young members of middle class and giving them better alternatives which he does not bother to specify. As practical guide to political fight it is product of long end effective career of practitioner and it provides wonderful examples of raising rubble and antagonizing groups of society against each other.



Saul Alinsky considers himself a part of revolutionary force and sees its targets as both moral and material. His hope resides in the young generation of American society (baby boomers at the time) who mainly came from the middle class background but reject similar middle class life for themselves because they saw its devastating effect on quality of life of their parents. His objective in this book is to provide this young revolutionary generation with meaning of life and tools to achieve this meaning by using democracy and organizing individuals who are not happy with existing arrangements into active force to change these arrangements.

The Purpose

This book is written for Have-Nots and designed as instruction on how to take power from Haves. Saul compares it with Machiavelli’s “The Prince”, the book that could be considered an instruction for Haves on how to keep their power. The way to achieve power for Have-nots is revolution. Alinsky sees history as sequence of revolutions and inevitable counterrevolutions, making two steps forward then step back. So his objective is to make revolutionary steps ahead longer and counterrevolutionary steps back shorter.

Alinsky keeps stressing his division of society into trinity of Haves, Have-Nots, and Have-a-little Want Mores. From the last group should come great leaders of revolution who will stir up frustrated and mentally weak Have-Nots and organize them into movement that will disposes Haves. However majority of this middle group will remain inactive due to their internal conflict of having too little to support Haves and too much to support Have-Nots. Alinsky perceives this revolution as moral imperative and as necessary in everybody’s interests including Haves because a man who has a loaf of bread and does not want to share with hungry is going to be killed by hungry to get his bread. Alinsky wants to take bread from Haves without killing.

Of Means and Ends

This chapter is somewhat long and detailed discussion on question “Does the means justify the ends?” Generally Alinsky’s answer is YES, but with a caveat: “Does this particular end justify these particular means?” Actually his view is quite interesting because he views the whole human life as a story of means and ends so he comes up with a set of rules for ethics of ends and means:

  1. Concern with ethics of means varies inversely with personal interest in and/or distance from conflict.
  2. The judgment of ethics of means directly depends on politics of person making this judgment.
  3. In the war ends justifies almost any means. The only reason to comply with any rules whatsoever is possibility of retaliation in kind.
  4. Any judgment about ethics of ends and means must be made in context of time when it occurred not in abstract.
  5. Concern for ethics increases with number of means available and vice versa.
  6. The less important the end to be desires, the more one can engage in ethical evaluation of means.
  7. Generally success or failure to achieve ends is determinant of ethics of means. The point with allusion to American Revolution: There is no such thing as successful traitor because if one succeeds he becomes a founding father.
  8. The morality of means depends on these means being deployed at the time of imminent victory or imminent defeat. Here Alinsky goes into condemnation of American use of nuclear weapons.
  9. Opposition automatically judges any effective means as being unethical.
  10. One does what he can with what he has and clothe it with moral garments.
  11. The Goals must be phrased in general terms like “Common Welfare” or “Bread and Peace”

Interestingly enough at the end of this chapter Alinsky find it necessary to declare his own means in the most elevated terms as “Free and Open society anchored in complex of high values that include the basic morals of all organized religions.” In his view Democracy is not the end, but political means to the ends of preciousness of human life, freedom, equality, justice, peace, and right to dissent.

A Word About Words

This chapter is about 5 key words of politics:

POWER: It is a key for Alinsky because “life without power is death” so he is looking for power to use it constructively in achieving his goals

SELF-INTEREST: Alinsky seems to go against negativity of the term and links it to question of morality. In short, whatever is in our self-interest we find ways to consider moral and visa versa. He also seems to believe that in some cases like when white students fighting for civil rights, they demonstrate “wondrous quality of man” to overcome “natural dams of survival and self-interest”

COMPROMISE: For Alinsky it is a wonderful world because he sees it as a temporary rest stop while moving in direction of his objectives. However his understanding of compromise does not include notion of retreat.

EGO: This is a key quality for organizer and is different from ego of leader or egoism of regular people. The ego of organizer is fed by ability to transfer Have-nots into united group with mass ego capable to fights for whatever it wants. In this case organizer is supreme creator of this new entity of the mass.

CONFLICT: This is an essential core of free and democratic society. Alinsky calls it “the harmony of dissonance”

The Education of an Organizer

This chapter is detailed review of methods used to educate organizers. The key methods are merging with the group, internalize their goals and attitudes, and test any concepts by real life experiences. The quality necessary for good organizer Alinsky defines as: Curiosity, Irreverence, Imagination, Sense of humor, somewhat Blurred vision of the better world, Organized personality, Well integrated political schizoid, Oversized Ego, Free and open mind, and Political relativity.


Ability to communicate effectively is indispensible. Without it organizer does not exists. It includes ability to understand life experience of other people and bring communication message within this experience. Another important rule is to arrange message in such way that people would believe that they come to it on their own. Instead of transmission of ideas they should be patiently nudged so they would come with feeling of ownership even if the feeling were false.

In the Beginning

This chapter is about methodology of organizer’s action. Specifically it is about initial process of establishing his identity and value for the group.


Here Alinsky again uses his marvelously well organized mind and comes up with tactical rules for organizers:

  1. Power is not only what you have, but what your enemy thinks you have
  2. Never go outside experience of your people
  3. Wherever is possible go outside experience of your enemy
  4. Make enemy to live up to their own book of rules
  5. Ridicule is most potent weapon
  6. A good tactic is the one your people enjoy
  7. A tactic that drags on too long becomes a drag.
  8. Keep the pressure on
  9. The thread is usually more terrifying than the thing itself
  10. If you push negative hard and deep enough it will break through its counter side
  11. The price of successful attack is a constructive alternative
  12. Pick the target, freeze it and personalize it

The Genesis of Tactic Proxy

The point of this chapter is to stress that rules are just a compilation of effective methods not really “how to manual”. The key for success is improvisation and constant pragmatic adjustments to real life situation. As example story of development of proxy fights tactic is provided.

The Way Ahead

Alinsky sees way ahead in organizing American middle class and especially its young members – student for action to destroy existing political order of America. The way to do it is to use insecurity of middle class and increasing difficulty to achieve traditional American value of prosperity in order to generate hate and enmity to upper classes that already achieved such prosperity and eventually substitute traditional value of prosperity with the value of denying prosperity to others. He seems to consider this the way to a beautiful world without poverty, discrimination, and all other ills of American society.


Alinsky explicitly rejects both communism and capitalism, but does not provide any vision for future structure of society where Have-Nots have power. His stated objective is to teach how to organize Have-nots for power and how to use this power for more equitable distribution of means of life for all people. No word however on where these means of life would come from. He believes that the future is organizing of middle class to join poor in massive robbery of existing wealth, but significant bulk of wealth belongs to middle class so somehow he misses impossibility of long term robbery of middle class by middle class.

However his tactics are brilliant, not that much as tool for achieving something for the poor, but as political tools to achieve power in democracy by using misconceptions inherent in world views of young people on early stages of their live when indoctrination provided by schools and universities is not yet overridden by real life experiences. Alinsky’s spiritual grandchildren who organized Obama’s complain created a glowing example of successful use of his ideas. Too bad that political power in democracy has quite short shelf live if not supported by substantial improvement of quality of life. The quality of life as it changed under Obama stinks, which spells doom and gloom to the Party of Bureaucracy – Democrats as soon as their adversaries – Republican start using Alinsky’s rules with full power. If republicans find in themselves an ability to redesign themselves from the Party of Plutocracy into Party of Middle Class, the prosperity would come back and at the level unimaginable today.

20141027 Evil Income Tax

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The income tax is nothing more than robbery where robbers are government bureaucrats and politicians and victims are productive people. The income tax is evil per logic of Judeo-Christian tradition, that American culture and society is based on. The implementation of income tax in 16th amendment was a revolution that completely changed the nature of American society from society of free individuals whose freedom was based on absolute private property into society of government subjects whose private property and consequently freedom are severely restricted by taxation and regulation.

This change in society led inevitably to corruption at all levels because all individuals, either at the top of all powerful government or at the bottom in masses being robbed, use all tolls available regardless of their morality either to hide resources from taxation or transfer to themselves resources confiscated from other people via income tax. The only hope is strength of American culture, which always managed to produce individuals passionately dedicated to freedom, and American constitutional structure of formally sovereign states. If enough people understand evil character of income tax and act to reverse results of income tax revolution of 1913, it will be possible to restore lost American freedoms. The tool to be used for such restoration could be revolt of state governments, which together can decrease power of the federal government and restore true union as it was established in original constitution.


  1. Solomon’s Yoke

Solomon’s yoke was cost of maintaining political establishment via income tax. This and other source demonstrate that this method of resource acquisition was very old as well as method to avoid it.

  1. Politically Speaking What Is “Evil”?

This is a discussion of notion of evil as it related to Judeo-Christian tradition and American traditions derived from it. At the end it states that 16th Amendment that established income tax transformed American society into something alien to its roots as society of free people.

  1. Yours Is Not Your Own

This is discussion of relation of income tax to property rights with very logical conclusion that income tax destroyed absolute property right in USA substituting it with absolute government supremacy over resources. It also links income tax to Marxism as the first step in elimination of private property. It correctly infers that elimination of private property would lead to destruction of society as it did happened in Soviet Union.

  1. How it came upon us

This is a history of fight by government-connected elite against property owners for establishment of income tax. Initially for the first 100 years of republic it was unsuccessful, but victory came to elite via propagation of “ability to pay” doctrine and enfranchising masses of people who are not able to pay and actually receive support from government. The side effect of this victory is change of capital structure of the country and decrease in productivity and wealth generation.

  1. The Revolution of 1913.

This is discussion of 16th amendment not as a reform, but rather as revolution, albeit it was initially slow moving and not obvious for people. This revolution had converted republic of free and independent property owners and citizens into country of democratically elected bureaucrats and politicians, reducing American citizens to subjects of political elite. The conclusion is that 16th amendment had undermined immunities of property, body, and mind; and that the freedoms won in 1776 were lost in 1913.

  1. Soak the Poor

This chapter makes case that expansion of government did the biggest blow to the well being of the poor. The reason is impossibility to hide wages from taxation and from placing government in control of intergenerational wealth transfers taking big chunks of wealth from transfers between productive middle to their children by using government financed education and between productive middle and their parents via social security.

  1. Corruption and Corruption

Corruption in American usage means use of public office for betterment of politician or bureaucrat. This chapter demonstrates how income tax make corruption wide spread and inevitable, undermining morals of the society.

  1. A Possible Way Out

Author sees the only way to salvation from the evil of income tax and New Deal, which he considers an American form of socialism, in the doctrine of federalism: division of authority between states and federal government.

  1. Competition in Government

This is more detailed discussion of how competition between state level and federal level bureaucrats can help to repeal 16th amendment and restore American freedoms.

  1. Union Forever

This is analysis of mechanics of federal dominance over states when federal government collects income tax and then grants some of this money back to the states with lots of strings attached. If states are able to break down this mechanism by repealing 16th amendment they will restore original union of sovereign states.

  1. For Freedom’s Sake

Author believes that income tax put America on the road to destruction of traditions and civilization that produced America. However he hopes that American culture is strong enough to produce individuals capable to restore original republic of free people and the first step in this restoration will be repeal of 16th amendment.


I agree with just about everything except for idealization of the past and recipe for the future. I think that American freedoms always were severely restricted even if not by the federal government than by state and local government banditry.

As for the future, I do not see division of power between states as the real hope because the state politicians and bureaucrats are not independent groups, but really just part of one countrywide hierarchical structure of political parties. When Democrats or Republicans come to power they become part of countrywide structure that has control over combination of federal, state, and judicial power. Depending on variation set of offices in the hands of each party the policy is changing either to provide slightly higher preference to bureaucrats if Democratic Party has more control, or to plutocrats if Republican Party has more control, but always at the expense of productive part of population.

However I do see lots of hope in individuals’ strife for the better life that would always make requirements to provide more resources and freedom of action: impossibility under bureaucratic control. If the idea of equal and marketable rights for natural resources takes root, than everybody have something to sell and justification of income tax as necessary for resource redistribution to help poor and maintain social peace would disappear. As soon as majority understand that income tax is redistribution from them to bureaucrats and politicians, the democratic process would lead to creation (rather then restoration) of society based on ideals of 1776. The American culture of necessity to have at least pretense of freedom, combined with generally well armed population would prevent any attempt of violent disruption of democratic process by bureaucrats and politicians, so they would rather not even think about it. It short, I think that future is bright.

20141019 Darwin’s Cathedral: Religion as tool of group survival

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The main idea is that religion could not be possibly discarded as something that is not essential for human survival. It has high value as adaptation tool at the level of group’s evolutionary survival. Moreover, it is highly effective and often is necessary tool for survival even in contemporary world when individual has high level of dependency on the group. Finally the analysis of religion could and should provide tools and methods to analyze other unified systems of human society.


Introduction: Church as Organism

This is about looking at religion and church as unit of natural selection, pretty much the same way as it is commonly done for individual organism. Actually this approach to the group applies not only to the church, but also to any grouping in human society. More specifically this book designed to treat organismic concept of religious groups as scientific hypothesis.

Chapter 1. The View from Evolutionary Biology

The first chapter is review of relevant concepts of evolutionary theory. It goes through notion of functional thinking and defines fundamental problem of social life as conflict between individual and group survival. Darwin’s solution to this fundamental problem is view of adaptation and survival of individual with two levels of characteristics: individual and group with survival assured for individuals with best mix for adaptation. In this case culture, religion, and, morality are group characteristics adaptive for survival or not. Author also reviews here the issue of group definition and its relation to organism definition and defines human group as adaptive unit. He uses this definition to develop and present table of Evolutionary Theories of religion:

  1. Religion as an Adaptation
    1. Religion as group-level adaptation
    2. Religion as Individual-level adaptation
    3. Religion as a cultural parasite that evolves at expense of individuals and groups
  2. Religion as Nonadaptive
    1. Religion as adaptive in past environments and maladaptive in modern
    2. Religion as byproduct (spandrel) of genetic and/or cultural evolution.

 Chapter 2. The View from the Social Sciences

Here is presented Rodney Stark’s rational choice theory of religion (199x). The table of 20 propositions provided to explain this theory and another table of just 6 propositions to demonstrate its adaptive quality. Another example is somewhat older ideas of functionalism is Emile Durkheim “Elementary Forms of Religious Life” (1912). Also provided is philosophical assessment of functionalism via articles related to Holism – general idea of the Whole being more than sum of its parts. The chapter ends with idea that extremes are in the past and modern common denominator is multi-level theories of adaptation

Chapter 3. Calvinism: An Argument from Design

This chapter is a detailed review of adaptive value of religion based on history of Calvinism. It is natural before and after experiment, which quite convincingly demonstrates that “after” Geneva society was more functional and its members more adaptive to environment then “before”.

 Chapter 4. The Secular Utility of Religion: Historical Examples

This chapter provides real live examples of functional value of religion:

  1. The Water temple system of Bali
  2. Survival supporting functionality of Judaism
  3. Early Christian Church

Finally table presented with 25 randomly selected religions and future research of their functionality discussed. However even at the first glance all these religions provided for basic functional value.

Chapter 5. The Secular Utility of Religion: The Modem Literature

This chapter is a review of contemporary research and literature about impact of religious believe and participation on prosperity of individuals or lack thereof. The results are very interesting. They demonstrate that religion does deliver benefits and it is in proportion to how strict and demanding it is, but only for individuals who need support such as new immigrants and/or individuals with personal problems. This issue reviewed using example of Korean church in Houston. Another issue is related to benefits and participation during life cycle of religious denominations. It seems to be going through dynamic process of poor helping each other to obtain mutual benefits via congregation, becoming richer in process and eventually falling out when help is not needed any more, normally in the next generation when gratitude is not carrying lots of weight any more.

 Chapter 6. Forgiveness as a Complex Adaptation

This chapter presents analysis of religion from the point of view of Games theory. From this point of view religion often could be presented as set of adaptive conditional rules of type “DO X if Y is TRUE”. It looks like typical religion rules such as forgiveness comply with most effective strategies in theory of games: Tit-For-Tat with variation for Contrite TFT (one mistake forgiveness) and Generous TFT – forgiveness in proportion to frequency of mistakes. This follows with more detailed analysis of these rules as applied in Christianity. The history shows that it works as group adaptation, but fall far short from ideal of universal inclusion.

 Chapter 7. Unifying systems

In this chapter author expands discussion to the level of General Theory of Unifying Systems with religion being just one of such systems. Others could be political, military, business, and any other types of human organization into groups. In this framework author discusses:

  • Function and Fuzziness of the systems
  • Symbols and Sacredness
  • Factual and Practical Realism
  • Science, as the only one system that puts high value on consciously analyzed correctness of facts
  • Beauty and Utility necessary to provide motivation.

The book ends with call to learn and understand our unifying systems such as religion, so we could perfect them and fly higher rather then crash and burn because of destroying them.


I find myself in agreement with pretty much everything in this book. I also see religion as survival mechanism working at the level of group and developed via regular evolutionary process when group with better-developed religion would win over the group with less effective unifying tools. I would only note that I’d like to see more research on the role of individual susceptibility to religion or other grouping ideology. It is obvious that some individuals genetically more inclined to internalize ideology and act on it and some other much less inclined to do the same. I would also be interested to trace age related dynamics. It seems to me that religiosity of individual is changing with age depending on changing role of this individual in the group. It would make sense if there were biological mechanisms that make young adults much more religious (ideological) than older people who in turn much more inclined to put premium on maintenance of traditional practices then abstract ideology these traditions are based on.

In any case, the view at religion as evolutionary tool necessary for individual fitness via survival of the group is, in my opinion, the most reasonable way to look at it. This obviously means that religion should be embraced, rather then fought, but only on condition of tolerance to all other religions or lack thereof that satisfy need of diverse individuals in ideology. To push religion to the level of individual believes with tolerance as non-negotiable requirement, is probably the only way to maintain coherent society.

20141012 The Fourth Revolution

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The main idea is that Western world undergone 3.5 revolutions over last 300+ years and is now on the brink of the 4th revolution. The first 3 were: establishment of nation-state; triumph of liberal capitalism of XIX century, partial rejection of liberal capitalism and establishment of welfare state. The half revolution of the second half of XX century was partial roll back of welfare state in America and UK during Regan and Thatcher administrations.

The current situation with its unsustainable debt, demographics, and level of benefits is pregnant with the next step of society development that should resolve these issues via 4th revolution. After detailed review of alternative to liberal democracy in form of Asian authoritarian capitalism of Singapore and China, authors came to conclusion that it is not the way Western world is going to follow. They expect that 4th revolution will come in benign form of technological and functional improvements to government activities that would allow resolution of current problems without sacrificing quality of life, political freedoms, and even welfare state.



This book starts with description of Chinese government school GELAP where future leaders are trained. The point is made that the student and teachers are eager to learn about western technology and management, but not only uninterested, but despise western political and cultural arrangements. It follows by discussion of Leviathan that seems to be suffering with elephant disease in all western democracies and reasons why it will inevitably be treated:

  • Unsustainable government debt
  • Demographics with prevailing old age and small numbers of workers per pensioner
  • Impossibility to maintain current level of benefits for everybody
  • External competition from Singapore model of authoritarian government combined with economic freedom for business.

Authors put out their position that too little of government is more dangerous then too much and so they reject libertarian position of government as necessary evil. However they still believe that western democracies have better chance to meet new demands because it makes authorities listen to people. They also believe that democracies have higher risk for the same reason: listening to people makes politicians to do wrong things to meat people’s demands.


Chapter 1: Thomas Hobbes and the Rise of the Nation-State

This is history of the First revolution – rise of nation state that resolved problem of incessant wars of everybody against everybody through overwhelming power of this state.

Chapter 2: John Stuart Mill and the Liberal State

This chapter is short history of liberal state, as it existed in XIX century – Second revolution that provided for tremendous economic growth, but created massive groups of disenfranchised individuals at the bottom and top of society unhappy with their share of newly created wealth.


Chapter 3: Beatrice Webb and the Welfare State

This chapter is description of last period of XIX and first half of XX century when unhappy people at the top like Marks and Engels developed ideas that energized bottom and as result implemented the Third Revolution that created bureaucratic welfare state throughout Europe and its spinouts after some totalitarian deviations into Communism in Russia and Nazism and Germany.


Chapter 4: Friedman’s Paradise Lost

The final chapter of this part reviews a half Revolution of Regan and Thatcher based on ideas of Austrian school of economic effectively promoted by Hayek and monetarism of Milton Friedman. This half revolution somewhat pushed back government interference into economy creating some breathing space for western society via economic growth and prosperity for about 20 years. However this revolution failed to stop growth of government and even more important it failed turn back ideological offensive of welfare and bureaucracy forces, which practically took over education in schools and universities.



Chapter 5:The Seven Deadly Sins-and One Great Virtue of California Government

This is review of problems of Western government using example of California as the highly representative case. Here are the problems or sins:

  1. Mismatch between structure and purpose of public sector organizations
  2. Baumol’s disease: slow growth of productivity in public sector comparatively to private.
  3. Mancur Olson’s law: advantage of interest groups over public in general
  4. Overactive state: massive intervention into business (licensing and such)
  5. Fuzzy governmental math: refuse to follow general accounting rules and reporting requirements applied in private business
  6. Use of government to transfer public resources to well connected plutocrats
  7. Political paralysis caused by continuous fight between different political groups of approximately equal power

The biggest problem however is the human nature: people love to get something from government and hate to pay for it. The result is mismatch between taxes and spending covered by public debt accumulated beyond any reasonable amounts.

The virtue and hope is that current democratic power in California seems to be able to move to solution by cutting expenses and increasing taxes, but it is far from success yet.

Chapter 6: The Asian Alternative

The Asian alternative is relatively small authoritarian government thinly covered by democratic procedures that deliver order and safety net, but does not interfere that much into business. It is discussed by using example of Singapore and current development in China.


Chapter 7:The Place Where the Future Happened First

The point here is that the future and seems to be quite bright for democracy future already happens in Sweden that moved back from being the most socialistic democracy to being efficient capitalistic democracy that successfully cut on government size and services without hurting majority. Similar process is happening in other Nordic countries. They also seems to discover ways to modify existing government services in such way that introduce competition and financial discipline. Sweden for example changes its pension system from defined benefits to defined contribution.

Chapter 8: Fixing Leviathan

This chapter compares old business model of GM in 1930 with contemporary successful business model of Google and infers from this that only similar dramatic change could help fix the government. It briefly reviews previous attempts to this end that mainly failed, but states that this time it is different because there is too little space to continue on current patterns without big disaster. The remedies suggested are: more diversity, localization of government, more pluralism, and more opportunities for experimentation.

Chapter 9: What Is the State For?

It is a very short review of philosophy of government in America from Tocqueville, through old liberalism of XIX century and welfare state and crony capitalism of XX century with recourse to previously discussed remedies: trimming of entitlements and limitation on power of interest groups to transfer resources to themselves. At the end it calls to complete half revolution of 1980s and make it into the full-blown Fourth Revolution.


CONCLUSION: The Democratic Deficit

The conclusion is: the Fourth revolution is coming and it will incorporate technology to upgrade western democracy to condition that include the best of capitalism, competition, individual freedom, and even welfare state. The hope is that once again western creativity will generate new and effective solution.


I mainly agree with the thesis of 3.5 revolutions and close coming of the 4th. I also agree that technology will play tremendous role in dramatic change of society. I also agree that Asian way is not feasible for Western society, moreover I do not believe that it feasible on the long run for Asian societies either. However I do not agree that 4th revolution would produce only minor changes in existing arrangements. I think that it would lead to complete destruction of the welfare state. I hope that this destruction will come, as I suggest, in form of change to equal and marketable rights to natural resources, providing everybody with something to sell in exchange for resources and consequently creating limitless opportunities for free market capitalism with dramatic decrease in role of government and violence in economics and overall society.

20141005 Profiting from Monetary Policy

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The idea is that existing theoretical framework of equilibriums used for monetary policy proved to be incorrect by the crisis of 2007. The main flow of this framework is not taking credit into account and maintains notion of equilibrium as something static that could be achieved by raising or lowing interest rates. Instead the Wicksellian framework of dynamic equilibrium between natural rate and money rate could generate correct signal about macro movements of market.



Key financial Issues that had to be dealt with:

  • Pensions crises: In addition to aging population the return on pension funds proved to be far lower than was used in calculations for needed set aside funds. Current financial framework cannot resolve this crisis.
  • A handful of dissenters not only denied contemporary theory (Hyman Minsky and Joseph Stiglitz), but proved in investment practice that other option exists (Soros, Brevan Howard)
  • A new hope? Ideas of Knut Wicksell based on role of credit with denial of equilibrium refined by Hayek and Myrdal could possibly allow generating correct signals of business trend and dramatically improve returns on investments.

1 The Great Moderation and the unraveling of a Great Myth

The great moderation is period from 1980s to 2007 when economy grew at reasonable pace and central banks seems to be able to control inflation and economic cycles by changing interest rates policy increasing rates when inflation was growing and decreasing when economy was slowing down. The core ideas of general equilibrium, rational expectations, and inflation control as implemented in policy failed to prevent economic crash of 2007. This chapter is the story of development of these ideas, their triumph, and eventual failure to provide reliable market signals.

2 From model failures to streams of data

Before 2007 economists like Ben Bernanke believed that their models are pretty good and just need a little bit of tweaking. However it was not really possible to define equilibrium that these models are based on. The reason for that is powerful exogenous factors that is just not possible to predict. Besides all measurements depend on statistical estimates, which are far from exact. The analysis in 2011 by Feds demonstrated that economic forecast models failed.

One of the most important reasons is that modeling assumptions were far away from real world. For example typical assumption that firms try to maximize profit is incorrect. Detailed analysis shows that much higher priority is to build relationships with customers while earning acceptable profit. Pursuit of short-term maximization would undermine firm even on medium run.

Instead of equilibrium analysis author suggest to rely more on analysis of streams of data and chaos theory to understand general trends. Especially important is analysis of credit data, which traditional equilibrium models completely missing.

3 The problem of credit

Analysis of boom and busts shows that they are directly related to credit availability variations. Here it also seems to be clear that there is no equilibrium in credit market. This is because it depends of value of collateral, which grows dramatically in boom time and collapses during the bust. This chapter describes ideas of Minsky and Stiglitz regarding business cycle.

4 The Vienna and Stockholm schools: A dynamic disequilibrium approach

Inability to explain behavior of credit resulted in monetary policy generating false signals for investors. One of important facts is that credit bubble does not coincide with inflation. Chapter goes through Hayek’s theory of cycles, Menger’s marginal utility, and money as calculation medium rather then measure of exchange value. It follows with Bohm-Bawerk analysis of capital as sum total of intermediate products. Also reviewed are ideas of Karl Wicksell with emphasis on credit and two different interest rates one for money and another for loans. There is also natural rate of interest defined in relation to current value of future product. Economy is in equilibrium if rates are equal. If money rate is higher then returns are unprofitable.

If money rate is lower, then entrepreneur generates higher profit at the expense of creditor. Finally ideas of Gunnar Myrdal of economy in continuing disequilibrium reviewed.

5 The neo-Wicksellian framework

Theory of credit and business cycle is based on variance between natural rate and money rate. Natural rate divided into ex-post measures (investment made) and ex-ante (investor expectations). The problem is that to measure natural rate is not really possible, but this chapter provides some approximate methods to do it.

6 Testing Wicksellianism

In this chapter author uses economic history of XX century to test application of Wicksellianism. The inference is that analysis based on Wicksellian theory of credit has better explanatory power then any of GDP factor. Relationship between Wicksellian Differential and return on equity is stronger then it is for GDP.

7 The creation and destruction of capital

This chapter analyses consequences of government interference with banks and credit. It is done in relation to huge balances of pension funds in developed countries which is also require high rate of return if they to meet future payment needs. Overall ability to produce high return is linked at its core to productivity growth and it is slowing down. Author relates this slowing down to failure increase educational achievement. After that there is a discussion of government ability create of destroy capital and its necessity as preventer of market failure. There is a wise advice at the end of chapter: Junk the models and look at the data.

8 Where are the customer’s yachts?

This chapter starts with fascinating anecdote about fund managers’ yachts and lack of those for customers. The idea is that credit based analysis could allow investors to make effective investment decisions.

9 Post-script- Constructing business cycle tracking funds

The key conclusion of analysis in this book is that Efficient Market Theory works fine at the micro level, but it does not at the macro level. Thus the opportunity to invest had to be brought to macro level through asset allocation technic investing into undervalued asset classes and shorting overvalued. At the end author provides a short description of use of Wicksellian ex-ante signaling in asset allocation.


I find strange the very idea of using monetary policy without taking credit into account. As far as I’m concerned money are created every time when two individuals agreed to exchange something in two steps one now and another at some point in the future. In other words I consider credit as part of money and as such it increases or decreases money amounts and consequently can create booms and boost that is consistent with Austrian theory of business cycles. I am not sure to what extent Wicksellian framework allows generate investment signals, but I completely in agreement with author that EMT works at micro level, but not at macro level and therefore idea to react to market signals via asset class allocation makes sense.

Austrian Economics Diagrams

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This small book presents a number of diagrams with high explanatory power for Austrian economic theory.



This is the diagrammatic representation of ideas of Austrian view of macroeconomic relationships.

The Primary characteristics:

  1. The capital stock made of heterogeneous capital
  2. The size of capital stock is treated as variable
  3. It is not full-employment model even if it assume that process starts with full employment
  4. The analysis in Austrian model is dynamic and time dependent
  5. The Austrian theory is theory of coordination: how production process coordinates with tastes of individuals, their time and liquidity preferences.

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This is a great set of diagrams clearly demonstrating logic of Austrian theory of business cycle:

  1. The new credit expands money supply that first goes mainly into hands of capitalists creating incorrect assumption on their part that individual preferences changed to higher level of savings.
  2. As result capitalists increase investments in long-term projects with time horizon beyond real level of individual preferences.
  3. When credit increase hit the limit, the gap between consumption demand and investment starves these projects of additional monetary resources causing their suspension or liquidation and economy goes into depression.
  4. After clean up process completed and failed projects closed, the economy starts growing again.

I mainly agree with this understanding of business cycle with one big caveat: I do not think that money supply is susceptible to control. Neither government nor exclusive use of hard money such as gold could conceivably limit money supply as long as humans can use credit and barter. Eventually money supply is subject to human passions and herd instincts that rise and fall unpredictably so money supply could increase / decrease due to credit expansion / contraction without any change in underlying stock of money either it is gold or accounting entries.

I would also note that individual tie preferences are not constant and could change any time so even if if at the initial planning and investment stage capitalist correctly estimates time preferences at the time, there is no way to correctly estimate future preferences which are clearly unknown.

That means that business cycle will always be with us as long as humans are in control of demand and supply of goods and services.

20140921 The Origins of Political Order

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This book is based on notion of evolution of political organization of society as direct continuation of human biological evolution. The main idea is to link together human biology, institutions of society, political organization derived from them, and then use historical evidence not only from typical point of view of Western history, but on the wider scale, including history of China, India, and Eastern Europe.

The point is made that humans are social creatures who always existed within the group and they always used political organization formal or not to maintain existence and cohesiveness of these groups. The political organization of society depends on size and method of production of society, developing from tribal organization to chiefdom, and to the state. Each level of organization provides for more effective military capabilities and therefore for success in competition with other societies for resources.

However the size and complexity of political organization creates some internal tensions. This could lead to decay and destruction of society either from within or from without. The main source of tension is human nature to help one’s kin, friends, and tribe at the expense of more distant members of society. The analysis of these internal tensions is concentrated on relative strength of central authority versus aristocracy, legitimacy of authority in the view of members of society, accountability of rulers, and rule of law as method of achieving legitimacy and accountability.



This book is about historical origins of political institutions and process of decay of these institutions. The period covered is from origin of humanity to French Revolution.

PART ONE – Before the State

1 – THE NECESSITY OF POLITICS: The third wave of democratization and contemporary anxieties about the future of contemporary liberal democracy; how both the Left and the Right entertain fantasies about the abolition of government; how contemporary developing countries represent the fulfillment of these fantasies; how we take institutions for granted but in fact have no idea where they come from.

POLITICAL ANXIETIES: To many in recently democratized world hopes for economic prosperity and political security associated with Western world just did not happen despite elections and multiparty systems. Unable to accommodate to newly discovered insecurity and volatility of capitalism some countries fall back to traditional authoritarian rulers like Putin and Hugo Chaves.

POLITICAL DECAY: The important part of this recession is political decay of American democracy – the oldest and most powerful example of results of such form of government. Despite being relatively mild this decay led to growth of unproductive elite, bloated state, financial insolvency, and economic stagnation.

FANTASIES OF STATELESSNESS: The fantasies of left and right about disappearance of state are meaningless, because a state is required to provide security, assure property rights, infrastructure, and other public goods.

GETTING TO DENMARK: In this context Denmark is a mythical rich democratic country which is capable to provide 3 necessary ingredients for prosperous society:

  1. The State
  2. The Rule of law
  3. Government accountability.

This book is an attempt to use history to provide answer to a question why contemporary political entities are the way they are.

CHINA FIRST: Since China is country with the oldest and the best-documented political history, it makes sense to start there.

TURTLES ALL THE WAY DOWN: This is just a metaphor for an attempt to explain world by using circular thinking: “the world is on the turtle and turtle on another turtle all the way down”.

2 – THE STATE OF NATURE: Philosophical discussions of the state of nature; how the contemporary life sciences shed light on human nature and hence on the biological foundations of politics; politics among chimpanzees and other primates; what aspects of human nature undergird politics; when different parts of the world were first settled.

CHIMPANZEE POLITICS AND ITS RELEVANCE: This is review of evidence developed from research of chimps and their group dynamics.

TO HUMAN POLITICAL DEVELOPMENT: This is a short analysis of differences with humans being much more capable of high-level organization and complex communication due to development of language.

SPECIFICALLY HUMAN THE BEAST WITH RED CHEEKS: This is analysis of human emotions as highly important part of social interactions in the group.

THE STRUGGLE FOR RECOGNITION: This is review of need for recognition as another part necessary for construction of social system.

FOUNDATIONS OF POLITICAL DEVELOPMENT: This is a compilation of human traits conductive for building political system:

  • Inclusive fitness of the group and kin selection
  • Ability for mental modeling of causality
  • Emotional foundation for establishing and following norms
  • Need for recognition that generates legitimacy that in turn creates foundation for political authority

EVOLUTION AND MIGRATION: This is a very short recount of human expansion from origin in Africa throughout the globe.


3 – THE TYRANNY OF COUSINS: Disputes over the fact and nature of human social evolution; family- or band-level social organization, and the transition to tribalism; an introduction to lineages, agnation, and other basic anthropological concepts

STAGES OF PREHISTORY: This is a review of history of anthropological definitions for development stages of human society. Author decided on use of four-level taxonomy: bands, tribes, chiefdoms, and states

FAMILY- AND BAND-LEVEL ORGANIZATION: This is review of family as a primitive organization of hunter-gatherers with no private property and no individualism. The person is nothing more then a part of a group with need for immediate consumption leading to extensive sharing. Hierarchy is based on personal qualities such as strength and is fluid as it is with chimps.

FROM BAND TO TRIBE: Tribes are growing out of bands and are built on common ancestry and usually parental lineage. It allows much higher level of organization with expansion by just drawing lineage to the more ancient ancestor. Tribes often contain segments, which could continuously ally or fight with each other.

ANCESTORS AND RELIGION: The same logic of common ancestors is normally used in development of religion with ancestors morphing into gods over time.

RELIGION AND POWER: Being much more powerful military then bands and more cohesive due to common ideology, tribes expand at the expense of bands either incorporating or annihilating them.

4 – TRIBAL SOCIETIES: PROPERTY, JUSTICE, WAR: How kinship is related to the development of property fights; the nature of justice in a tribal society; tribal societies as military organizations; strengths and weaknesses of tribal organization

KINSHIP AND PRIVATE PROPERTY: The earliest private property rights held not by individuals, but by lineage groups or tribes. The use of property avoided tragedy of commons by clearly defined rules and tribes cohesiveness.

LAW AND JUSTICE: Tribes have very weak formal authority if any, but it has traditions and prevalent attitudes that warranties use of violence against rule breakers as long as enough people support it. In this environment Leader cannot just command, he had to be more of an arbitrator between various groups. This arrangement made tribes relatively more vulnerable to dissolution than other forms.

WARFARE AND MILITARY ORGANIZATION: With discovery of agriculture warfare became highly efficient way to obtain resources such as land, food, or slaves. Correspondingly ability to conduct effective warfare becomes main factor in evolutionary selection between different forms of societies. On the later stages of tribe development the application of violence becomes more professional with leaders forming professional teams of warriors. However nature of relationship between leader and warrior is much more built on reciprocity and communality then in societies at more advanced stages. When successful societies started moving from tribes to states, it was an organic transformation with states being build on the top of tribal societies restricting, but not eliminating tribal relationships and loyalties.

FROM TRIBALISM TO PATRONS, CLIENTS, AND POLITICAL MACHINES: The movement from tribe to state also included evolution in structure of tribe that become more inclusive by incorporation genetically non-related people as clients. From this background came contemporary democratic political machines and patronage networks.

5 – THE COMING OF THE LEVIATHAN: How state-level societies differ from tribal ones; “pristine” versus competitive state formation; different theories of state formation, including some dead ends like irrigation, leading to an explanation of why states emerged early on in some parts of the world and not in others


  1. The State as a The Voluntary Social Contract
  2. The State as The Engineering Project
  3. The State as The Result of Population Density
  4. The State as The Product of Violence and Compulsion
  5. The State as The Product of Charismatic Authority

WHY WEREN’T STATES UNIVERSAL? The answer provided based on known non-state societies in Africa, Australia, and elsewhere is that geography, type of agriculture, and ease of travel and trade could prevent society from developing into the state.

 PART TWO – State Building

6 – CHINESE TRIBALISM: The origins of Chinese civilization; organization of tribal society in ancient China; characteristics of Chinese family and kinship; spread of feudalism under the Zhou and the nature of political authority. The review of Chinese civilization going from 5000BC archeological settlements Yangzhou until Qin dynasty 221BC

TRIBAL CHINA: This is a short review of expansion and eventual mingling, competition, and wars of China’s tribes on their way to formation of the state.

CHINESE FAMILY AND KINSHIP: The case made here is that China never really got over its family lineages structure developed by tribes and keeps it just below superstructure of unified state.

CHINA’S “FEUDAL” PERIOD: China got to the level of bunch of chiefdoms by the time of Zhou (1200 BC) becoming a series of lords and their kin groups.

 7 – WAR AND THE RISE OF THE CHINESE STATE: How the Chinese state arose out of military, competition; Shang Yang’s modernizing reforms; the doctrine of Legalism and its critique of Confucian familism; why political development was not accompanied by economic or social development

WAR AND STATE BUILDING: As in Europe, formation of state in China occurred via continuing warring between different entities for 294 years all counting 468 wars with very high levels of mobilization to up to 20% of total population.

INSTITUTIONAL INNOVATIONS BROUGHT ON BY CONSTANT WARFARE: As consequence of this warfare a number of institutions were developed to meet military mobilization needs:

  • Meritocratic advancement of military commanders
  • Taxation and Population Registration
  • Bureaucracy
  • Military and Civilian technology
  • Ideological upheaval that produced Confucius and formation of Chinese culture with its superior literature and tradition so powerful that future conquerors like Mongol would be assimilated into it rather then impose their own alternatives.

SHANG YANG’S CAMPAIGN AGAINST THE FAMILY: These reforms in Qin period where directed into development of protocapitalist society with individual ownership of land, nuclear family, universal system of measurements and such, but with state being superior by far to individual and imposing whatever it deem needed by cruelest measures possible.

CONFUCIANISM VS. LEGALISM: These reforms developed into ideological concept of Legalism. Consequently it produced ideological struggle with Confucianism so pretty much all Chinese history could be viewed in the light of this ideological struggle. Legalism promoting direct relationship from individual to state with its supremacy continuously collided with Confucianism promoting extended family with strive to find harmonious relationships between families across individuals and time, with state and emperor being just a top decision making mechanism for family of families.

WHY CHINA’S DEVELOPMENT PATH DIFFERED FROM EUROPE’S: The final result of Chinese warring period was creation of one unified state contrary to Europe where nobody was able to complete unification so it still remains a conglomerate of states competing between themselves. The reasons here identified as geography – more difficult in Europe, Culture – much higher diversity in Europe, and human factor – leadership.

MANY MODERNIZATIONS: Historically Qin went through multiple modernizations with tribal relationships undermined by the state with high levels of violence resulting in reversal as soon as pressure of the state diminished, preventing development of individualistic voluntary cooperation. In Europe, on other hand, move away from tribe was from bottom up via development of Christianity making it slower, but much organic process with higher level of staying power.

8 – THE GREAT HAN SYSTEM: The first Qin emperor and why the dynasty he founded collapsed so quickly; how the Han Dynasty, restored Confucian institutions but retained Legalist principles; how China was governed under the Qin and Han

THE QIN STATE AND ITS DEMISE: The first Qin emperor (259-210 BC) rejected Confucianism and moved to legalism with extreme cruelty and prejudice. It resulted in multiple revolts eventually leading Qin to demise returning in 202 BC to Confucian bureaucracy of family with emperor being morally responsible for wellbeing of population. This period is known as Han dynasty.

THE NATURE OF HAN GOVERNMENT: The much better balance between state power and family/tribe power was achieved with basically modern bureaucratic machine, including nepotism and reasonable levels of corruption. Also educational system was developed to supply bureaucrats for all parts of the system. Interestingly enough military was pushed at the subordinate level to bureaucracy. Build on compromise Han dynasty proved to be pretty stable lasting from 202BC to 220 AD

 9 – POLITICAL DECAY AND THE RETURN OF PATRIMONIAL GOVERNMENT: Why the four-hundred-year-old Han Dynasty, collapsed; significance of the growth of latifundia and inequality in a Malthusian society; how great families captured the government and weakened the state; the Chinese sense of nation

THE RICH GET RICHER: One of the main reasons of Han destruction was expansion of big land estate with the same level of technology causing Malthusian trap with deprivations for majority. With military busy at outpost there was not enough forces to maintain internal order.

CHINA DISINTEGRATES AND PATRIMONIALISM RETURNS: Han collapsed in 220 AD. This event was followed by struggle between its parts for dominance. Significant part was played fight between aristocracy based on land ownership and bureaucracy based on its traditional strong position in control of the state.

THE STRONG CHINESE STATE: The unified Chinese state was restored in new form only in 580 with short Sui dynasty that was substituted by Tang dynasty in 617. It lasted until X century. Author poses the question why China reunified while Roman Empire dissolved for good. The answers he provides are two sided: strength of Chinese state and unified culture.

 10 – THE INDIAN DETOUR: How India’s early development diverged from China’s due to the rise of Brahmanic religion; varnas and jatis; tribal society in early India; peculiarities of Indian kinship; the Indian detour on the road to statehood. In short, the difference between India and China is defined by main engine of society: State and bureaucracy in China, Religion and priests in India. The review of Indian development includes: INDIAN TRIBAL SOCIETY, INDIAN FAMILY AND KINSHIP; TRANSITION TO STATEHOOD; AND THE DETOUR: The deviation of India development was due to the fact that India did not go through 500 years of was with eventual unification as China did. Author seems to believe that this was result of religious development in India, which made the law and order sourced not directly from government, but rather from superior source, establishing highly stable caste system with priests at the top. The influence of this development is lasting up to the present day, making it difficult for India to establish an effective state.

 11 – VARNAS AND JATIS: Economics versus religion as a source of social change; how Indian social life becomes comprehensible in light of religious ideas; implications of Indian religion for political power

THE RATIONALITY OF INDIAN RELIGION: It is an interesting take on dispute between economics and religion as primary engine of society. Indian religion achieved a fantastic feat of stabilizing society practically forever by successfully moving opportunity for achievement out of human life span.

IDEAS AND THEIR POLITICAL CONSEQUENCES: Varna system however had not only stabilizing influence on society, but also weakening effect. By subordinating warriors to priest it clearly decreases military abilities of society overall leading to higher level of vulnerability to external threats.

12 – WEAKNESSES OF INDIAN POLITIES: How the Mauryas were the first and most successful indigenous rulers of India; the nature of the Indian state under the Mauryas; the character of Ashoka; decline, disunity, and revival under the Guptas; why India subsequently fell to foreign conquerors. The main point here is that India developed strong society that prevented development of strong state.

THE MAURYAN EMPIRE: WHAT KIND OF STATE? Ashoka Empire was different from Chinese Qin in absence of strong meritocratic administrative system. Its administration was based on caste and lineage. It did not go through such wars as in China and as result losing aristocratic groups stayed around. Buddhism had serious impact making empire weaker.

THE VICTORY OF SOCIETY OVER POLITICS: The following empire of Gupta was also relatively weak for the same reasons.

NATION BUILDING BY FOREIGNERS: Eventually development of India into one united country was mainly conducted by foreign powers. First it was Muslim conquerors and later British colonizers.

CHINA VERSUS INDIA: The key difference is strong state and weak society in China and weak state and strong society in India.

 13 – SLAVERY AND THE MUSLIM EXIT FROM TRIBALISM: The Ottoman institution of military slavery; how tribalism was the main obstacle to political development among the Arabs; how military slavery first arose under the Abbasid dynasty; why tribesmen make good conquerors but poor administrators; Plato’s solution to the problem of patrimonialism

CREATION OF A MUSLIM STATE: This part is about origin of Islam and its original military expansion under 3 caliphs: Abu Bakr (632-634), Umar (634-644), and Uthman (644-656). By 711 Islam expanded throughout Middle East and conquered Spain until it was stopped in France in 732. Islam states never fully rid of tribal groups that continue to have impact to this day.

THE ORIGINS OF MILITARY SLAVERY: Islam came up with a unique way to control nepotism and promote meritocracy while preventing successful meritocrats from establishing dynasty of mediocrities. It was military slavery that was able to meet such contradictory requirements for a very long period.

 14 – THE MAMLUKS SAVE ISLAM. MAMLUK DECAY. STATES AS ORGANIZED CRIMINALS: How the Mamluks came to power in Egypt; the curious fact that power in the Arab Middle East was in the hands of Turkish slaves; how the Mamluks saved Islam from the Crusaders and Mongols; defects in the Mamluks implementation of military slavery that led to the regime’s ultimate decline

MAMLUK DECAY: The decay eventually came from two sources: lack of political institutions that made selection of sultan to be at the top of hierarchy of problems due to dysfunctional process without clear rules. The second problem was lack of overarching political authority. All these problems led to a high level of internal fights at the expense of ability to mobilize against external threads.

STATES AS ORGANIZED CRIMINALS: This is an interesting part of discussion because it reviews notion of state, using Mamluk’s history, as criminal organization trying to separate immature states in which predation is unlimited from mature states in which predation is limited by elite intention to leave something for investment and development in hope to increase opportunities for bigger take from robbery in the future. Eventual substitution of Mamluks by Ottomans came after leaders successfully moved to heritability of their positions leading to increase of struggle between lineages and weakening of the system.

15 – THE FUNCTIONING AND DECLINE OF THE OTTOMAN STATE: How the Ottomans centralized power in a way that eluded European monarchs; how the Ottomans perfected the system of military slavery; instability of the Turkish state and its reliance on continued foreign expansion; caused decay of the Ottoman system; military slavery as a developmental dead end. Here is the main difference between Islamic and European states defined based on the level of top down control strong at the East and weakened by aristocracy at the West.

A ONE-GENERATION ARISTOCRACY: Ottoman system was pretty much based on military patterns so aristocrat was not linked to the land as much as lord in Europe, but rather sent to different positions within hierarchy as needed. With regular military service adding long absences from family and estate, such aristocrat would not have power base to challenge superiors or piers. These positions were not heritable so children returned to civil population.

MILITARY SLAVERY PERFECTED: This is description of military slavery structure and procedures.

THE OTTOMAN STATE AS A GOVERNING INSTITUTION: As institution Ottoman state was a mature institution based on idea that moderate robbery is conductive for resource multiplication leading to better robbery opportunities in the future.

REPATRIMONIALIZATION AND DECAY: Author sees decay of Ottomans as result of two factors: end of opportunities for territorial expansion that was necessary because the state was structured around military expansion; another factor also related to militarism was use of firearms which significantly degraded value of Ottoman’s cavalry and exposed intellectual and technological deficiencies of this society.

THE OTTOMAN LEGACY: By far the most successful Islamic state Ottomans demonstrated potential of administrative society with top of society being without blood links to each other. It also demoed potential of external to the state lawmaking organization in this case religious establishment.

 16 – CHRISTIANITY UNDERMINES THE FAMILY: How the European exit from kinship was due to religion, rather than politics; common misunderstandings about the nature of the European family; how the Catholic church destroyed extended kinship groups; how English individualism was extreme even in a European context

EUROPEAN EXCEPTIONALISM: The striking difference between Europe and East was structure of the family. Kinship for regular people mattered a lot less and even more important, the decision-making was at the level of individual rather then clan.

MARX’S MISTAKE: Marks assigned reasons for these specifics to development of capitalism in Europe, when in reality these features existed well before capitalism developed in Europe.

STATUS TO CONTRACT: Marriage, control over property, and other decision-making areas in Europe were controlled by contract rather then status at in Eastern empires and timing of establishment of this pattern was consistently moving back with expansion of historical knowledge

THE SOCIAL BACKGROUND TO STATE BUILDING IN EUROPE: Another exceptional feature of Europe is that transition out of kinship structure occurred in social and cultural sphere rather then in political. Author believes that it was caused by religious influence of Christianity and Catholic Church.

PART THREE – The Rule of Law

17- THE ORIGINS OF THE RULE OF LAW: European exceptionalism evident in the role of law in early state formation; definitions and disagreements about the rule of law; Hayek’s theories about the priority of law over legislation; how English Common Law was based on royal power, and how that bolstered the legitimacy of the English state. Law here is defined as set of abstract rules that keeps community together. The rule of law could exist only if previous body of low is sovereign over legislation.

CONTEMPORARY CONFUSIONS CONCERNING THE RULE OF LAW: This is mainly discussion about relations between rule of low and economic development. Author’s position is that even if rule of law in contracts and property rights is clearly related to economic development it is not necessary to be absolute. If there is “good enough” rule of law it could be sufficient for economic success as it is now in China. He also discusses development of property rights in Western world where it occurred at first at the aristocratic top of society and only slowly moved down to commoners.

HAYEK’S THEORY THAT LAW IS PRIOR TO LEGISLATION: Hayek’s point is that common rules precede the law and consequently that ideas of constructionists that law should be created as needed is a cause of huge damage of French and Russian revolutions.

FROM CUSTOMARY TO COMMON LAW: Here author discusses transition from customary law typical for tribal society. The main difference is that customary law enforcement based on group self-help, while common law enforced by power of the state.

 18 – THE CHURCH BECOMES A STATE: How the Catholic church was critical to the establishment of the rule of law in Europe; the investiture conflict and its consequences; how the church itself acquired statelike characteristics; the emergence of a domain of secular rule; how contemporary role of law is rooted in these developments

THE CATHOLIC CHURCH DECLARES INDEPENDENCE: In 11th century Catholic Church took over control over appointment of bishops and other church officials from kings. It also established celibacy as tool to keep land in hands of church preventing lineages from dividing land and power. However it was too weak military to subjugate kings, as result leading to separation of church and state with church slowly being pushed our of secular politics, while kings ceasing control over spiritual and ideological lives of their people.

THE REAPPEARANCE OF ROMAN LAW: Another result of such separation was revival of Roman law. Professional lawyers took over from church control over legal system, which become somewhat independent part of state not fully under control of either church or king.

LAW AND THE RISE OF THE MODERN STATE: Consequently the modern western state was formed not only by pure violence of strongmen of the moment, but also by need of these strongmen to obtain legitimacy from religious authority from the church and legal authority from the lawyers.

HOW THE MEDIEVAL CHURCH SET PRECEDENTS FOR CONTEMPORARY RULE OF LAW: After reforms of 11th and 12th centuries Catholic Church appeared as supranational bureaucracy working on higher scale then small bureaucracies of European kingdoms and having significant impact on laws and everyday lives of population. Eventually it opened road to separation of power between multiple entities: legal, legislative, executive, and ideological. It was a specific characteristic of Western Catholic form of Christianity. Eastern Christianity remained under control of kings with no separation of power between church and state and no independent legal power.

 19 – THE STATE BECOMES A CHURCH: How the rule of law developed in India and the Middle East but not in China; how authority was effectively split between secular and religious authorities in the Middle East; how premodern Middle Eastern regimes observed property rights; why the Muslim ulama were never able to check state power in the manner of the Christian church; why no rule of law exists in the contemporary Arab world; the modem rules of law compared.

The opposite of Eastern Christianity development occurred in India where it was religion – Brahmins managed to get control over military power of state Kshatriyas, but only at ideological level without any bureaucratic organization of Brahmins.

RULE OF LAW IN THE MIDDLE EAST: Islamic countries developed one more solution when both religion and state merged into one in the person of caliph, but still was sourced from written law of sharia. The issue of complexity of control over wide territories was resolved by delegation of caliph’s power down to whoever was in actual control of local territory.

SEPARATION OF MOSQUE AND STATE: Some separation did exist in Islam in form of caliph being able to create laws outside of sharia formally subordinated to it, but mostly covering issue outside of it. The important thing about Islam is that individual property rights did not exist. In Ottoman Empire everything formally belonged to the state, but actual owners could pass it as inheritance and do whatever they wanted.

HOW THE RULE OF LAW FAILED TO SURVIVE CONTACT WITH THE WEST IN BOTH INDIA AND ISLAM: Both Eastern systems India and Islam failed to maintain their traditional structure of legitimacy and law after direct encounter with the West. Destroyed first by Western colonization they where substituted by week corrupted pro-socialistic democracy in India and by authoritarian regimes in Islamic countries. With demise of socialism its ideas lost attraction and gave push to powerful wish to go back to old time when Islam was pure and not corrupted by the West. Interestingly enough it turned into totalitarian terrorist movements that define themselves through war against the West and infidels. The most significant result to date is Iranian revolution, which so far failed to build effective self-sustained state.

WHY THE RULE OF LAW WAS STRONGER IN WESTERN EUROPE? Author’s answer: Codification, Legal Specialization, and Institutional autonomy.

20 – ORIENTAL DESPOTISM: How a modem state was reconsolidated in China after the Tang Dynasty; the usurpation of the empress Wu and what it tells us about the Chinese political system; what the Mandate of Heaven was and how political legitimacy was established in dynastic China

CHINA’S MODERNITY AFTER THE TANG-SONG TRANSITION: This is review of China’s development for next 1000 years from Tang (618) to Qing (1644). During this time China established modern bureaucratic system with meritocracy through examination system.

THE EVIL EMPRESS WU: This is story of revolt against bureaucracy by the populist despot who successfully cleansed out elite using terror with support of population.

THE MANDATE OF HEAVEN: This is discussion of Chinese legitimacy of ruler issue: Mandate of Heaven. It is just a set of understandings about duties of ruler toward masses common in Chinese culture.

21 – STATIONARY BANDITS: Whether all states are predatory, and whether the Chinese state in Ming times deserved to be called that; examples of arbitrary rule drawn from later periods in Chinese history; whether good government can be maintained in a state without checks on executive authority

GOOD GOVERNMENT, BAD GOVERNMENT: Author seems to be associating good government with efficient meritocratic bureaucracy and “bad government” with emperor at the top of hierarchy who’ve got there without climbing a ladder of bureaucratic hierarchy.

THE “BAD EMPEROR” PROBLEM: Here is where Chinese problems are coming in. Neither Emperor of old nor current Emperor of Chinese communist party is limited by rule of law and/or political accountability. As result they can and do going bad causing a lot of pain for population

INSTITUTIONS AREN’T ENOUGH: The point here is that China possesses pretty good institutions, but its people had a wrong attitude of extreme self-satisfaction that led to stagnation. With this attitude gone China is doing very well at present.

 PART FOUR – An Accountable Government

22 – THE RISE OF POLITICAL ACCOUNTABILITY: What political accountability” is; how the lateness of European state building was the source of subsequent liberty; what is wrong with “Whig history” and how political development cannot be understood except by comparing countries; five different European outcomes

EUROPE’S LATE STATE BUILDING: European kings started state building rather late and consequently encountered much more resistance from aristocracy and commoners than Chinese and Muslims. As result they failed achieve complete control except for Russia. This became source of political liberties in Europe.

THE MARCH OF EQUALITY: This is a very short review of democratic political waves that formed contemporary world.


EUROPE’S EASTERN ZHOU PERIOD: This is about similarity of Europe in 1100 AD with Zhou dynasty in China 770 BC with multiple feudal forces fighting for dominance.

THE ROLE OF LAW IN EUROPEAN DEVELOPMENT: Contrary to China the existing laws outside of kings’ control prevented creation of mass armies and consequently unification in Europe as it happened in China.

A FRAMEWORK FOR STATE BUILDING: This is classification of political development in Europe as:

  1. Weak absolutism (French, Spanish)
  2. Successful absolutism (Russia)
  3. Failed oligarchy (Hungary, Poland)
  4. Accountable government (England, Denmark)

23 – RENTE SEEKERS: How fiscal crisis led to the rise of patrimonial government in France; the intendants and the growth of centralized government; how the French elite understood liberty as privilege, and how they were prevented from achieving collective action; the French government’s ultimate weakness and inability, to tax or control its own elites.


RENT-SEEKING SOCIETIES: The last part contains general inferences about rent-seeking societies based on French history. The most important is idea that rule of law and property rights extended to elite only creates growing and irremediable inequality that eventually leads to explosion.

 24 – PATRIMONIALISM CROSSES THE ATLANTIC: Why government in Latin America has characteristic features not found in other parts of the world; early modern Spain and how it developed patrimonial absolutism very similar to that of France; Spanish institutions and their transmission to colonies in the New World.

This is specific example of political development resulted from conquest and interracial interactions. The chapter covers: THE BANKRUPT SPANISH STATE; TAXATION AND NO REPRESENTATION; TRANSFER OF INSTITUTIONS TO THE NEW WORLD; and THE IRON LAW OF LATIFUNDIA: In Latin America despite similar to France rent seeking, the explosion did not occur or it rather was channeled into revolutions for independence. The new elite resumed rent seeking in multiple forms often using financial methods such as nationalization, inflation, and state bankruptcy not easily understood by population and therefore allowing continuation of patrimonial society so far.

 25 – EAST OF THE ELBE: Why Hungary is of interest as an alternative route to failed accountability; how serfdom was imposed in Eastern Europe just as it was being abolished in the West; the emergence of constitutionalism and noble dominance in Hungary; why it is important to have a strong central state as well as constraints on that state if liberty, is to flourish.

This is detailed review of Hungarian state and its development. It is opposite to Russia and/or France case when fight between king and nobles was won by nobles with resulting decline of state without strong unifying force.

LORDSHIP AND BONDAGE: The development of relationship between serfs and nobles reviewed mainly on the example of Eastern Europe and Russia. In contrast to West where lords were restricted by strong kings in East lords were more powerful resulting in much higher loss of freedom by serfs.

CONSTITUTIONALISM AND DECLINE IN HUNGARY: This is about Hungary developing very strong society institution at the expense of state leading to military and eventually total decline of the country.

FREEDOM AND OLIGARCHY: This is an additional discussion of necessity of balance between societies and state without which either state becomes too weak and could fall or society becomes too weak to prevent despotism.

 26 – TOWARD A MORE PERFECT ABSOLUTISM: The emergence of the Muscovite state and peculiarities of Russian political development; how the gradual enslavement of Russian peasants was the result of the monarchy’s dependence on the aristocracy; why absolutism triumphed more completely in Russia than in other parts of Europe.


 27 – TAXATION AND REPRESENTATION: How the preceding cases of failed accountability set a context for understanding the development of parliamentary institutions in England; sources of political solidarity and their roots in pre-Norman England; the role of law in legitimizing English institutions; what the Glorious Revolution actually accomplished.


  1. English solidarity was more political as represented by local governments than social from the beginning.
  2. Common law and legal system supported individual property rights
  3. Religion supported Parliament in its contest with king

FREE CITIES AND THE BOURGEOISIE: The bourgeois cities developed as independent force countering lord and attracting serfs. The specific of Europe was that cities were given charters and protection by king as counterweight against lords. It was not necessary in the East Europe were lords were dominant or in Russia were king was dominant, but in England relative equivalence of power prompted king to support cities as supplemental power. This created opportunity for development of city based relatively free market economic system.

THE STRUGGLE OVER TAXATION: This is a story of XVII century fight over taxation between king and parliament with particular outcome of lower level of corruption than elsewhere developed as specific English feature.

THE GLORIOUS REVOLUTION: The main achievement of Glorious revolution was achievement of compromise that legitimized taxation making it dependent on consent of taxpayers.

TO THE AMERICAN AND FRENCH REVOLUTIONS: This volume does not stop before American and French revolution. This part briefly reviews status of political systems at this point.

 28 – WHY ACCOUNTABILITY? WHY ABSOLUTISM? The previous cases compared; why England’s path to representative government was not the only one possible; getting to Denmark; how the historical discussion is relevant to democratic struggles in the present

STRONG ABSOLUTISM: The case of strong absolutism reviewed in Russia.

WHY DIDN’T ENGLAND END UP LIKE HUNGARY? The reasons provided: the first is high mobility of society with tradition of grassroots political participation. The second reason was the state strong enough to suppress aristocracy when needed.

GETTING TO DENMARK: Another interesting case represented by Denmark where parliament was defeated by king and strong state, but monarch freed serfs to use as counterweight to landed aristocracy. Danish way to democracy was complicated and dependent on many contingencies, but it just proves that there are multiple roads to Denmark as example of prosperous democratic state.

 PART FIVE – Toward a Theory of Political Development

29 – POLITICAL DEVELOPMENT AND POLITICAL DECAY: The biological foundations of politics; mechanisms by which political order evolves; what politics is and how it differs from economics; a definition of institutions; sources of political decay; the state, rule of law, accountability, and how they are related; how the conditions for political development have changed over time


Humans always existed as part of social group and human sociability built around kin selection and reciprocal altruism.

Humans have innate propensity for creating and following norms and rules.

Humans have a natural propensity for violence.

Humans naturally desire not only material goods, but also recognition.

IDEAS AS CAUSE: Human Ideas are fundamental causes of why societies are different and follow different development paths.

Humans create mental models of reality that often take form of religions that facilitate collective actions and establish rules of moral behavior.

Religions are not purely spiritual constructs; they also define to large extent division of labor and resource distribution in society by providing legitimacy to political order.

THE GENERAL MECHANISM OF POLITICAL DEVELOPMENT: Political order develops from band – tribal level to state level by suppressing kin-lineage relationships and expanding political and material relationships not related to kin, family, and tribe. Political development is Darwinian process with inheritance, variation, and selection. The specifics are:

  • Units of selection are rules and institutions that embody these rules
  • Variation is not random, but rather result of deliberate ideological development of interacting humans
  • Inheritance occur culturally, rather then genetically
  • The competition most often occurred in the form of wars and conquest

SPANDRELS EVERYWHERE: As in biological evolution political evolution produces innumerable spandrels

INSTITUTIONS: Institutions here defined as stable, valued, and recurring patterns of behavior. The main institution discussed is state not only as monopoly on violence on specific territory, but also as subject to division of labor. Characteristics of this institution define on the axis Adaptability – Rigidity; Complexity – Simplicity; Autonomy – Subordination; and Coherence – Disunity.

POLITICAL DECAY: Political decay occurs when society’s institutions functionality declines and they could not fulfill their missions any more. The second form of political decay is repatrimonialization when patron-client relationship when subset of society hijack control over state and successfully obtains rent at the expense of members of society outside of this group.

VIOLENCE AND THE DYSFUNCTIONAL EQUILIBRIUM: Rent seeking groups can and do establish dysfunctional equilibrium when groups get disproportionally high share of continuously shrinking pool of resources. The pool is shrinking because everybody is busy in increase share of their group and efforts to expand resources in the pool meaningless for producers. The typical way out of this is violence either external – conquest by society with better functioning military, or internal violence of revolution when individual in groups who get disproportionally small share revolt against groups who get disproportionally high share.

 30 – POLITICAL DEVELOPMENT, THEN AND NOW THOMAS MALTHUS: How the conditions for political development have changed dramatically since the eighteenth century; the political, economic, and social dimensions of development, and how they interacted in a Malthusian world; how these dimensions interact now; anticipations of the contemporary world

THOMAS MALTHUS: Before 1800 humans lived in Malthusian world where resources grow slowly if at all and number of people quickly outgrows available resources and is regularly trimmed by war, starvation, and diseases. However in reality humans grew in 10,000 years from a small group of a few millions to a billion or so worldwide by 1800 mainly through territorial expansion including expansion at the expense of less fitted groups.

POLITICS IN A MALTHUSIAN WORLD: In the zero-sum world the best way to survive and expand was to achieve military superiority over neighbors that would provide for ability to defend own resources and take resources from others. It was achieved via social mobilization based on legitimacy that was in turn supported rule of law and state building all of which were connected via feedback loops.

DEVELOPMENT UNDER CONTEMPORARY CONDITIONS: The same process took much more efficient form in contemporary world where social mobilization creates not only military power, but high level of economic growth and innovation taking humanity out of Malthusian trap and making territorial expansion and conquest comparatively inefficient way to obtain resources.

THE MODERN DEVELOPMENT PARADIGM: Here author reviews the contemporary development paradigm by using example of South Korea that went from poor autocracy to prospering democracy in just a few decades.

WHAT HAS CHANGED: The main change is globalization and integration of societies around the world. After the end of Cold War only two societal model are standing: Democratic liberal capitalism with welfare state as represented by America and Western Europe; and autocratic state controlled capitalism as represented by China and Russia. Author seems to believe that western concept of individual dignity and recognition would lead to victory of democratic model.

ACCOUNTABILITY TODAY: However the victory of democracy is not inevitable mainly because western democracy now is in crisis of typical political decay with multiple organized groups professional, racial or religious managed to establish rent flow to them at the expense of society as the whole leading to economic stagnation and political deadlock.

WHAT COMES NEXT: The China model while still rising economically still did not prove its economic and innovation viability because so far it was catching up using western capital, know how, and markets. Would it be able to stand on its own when increase of income and quality of life slow down? Would it be able to produce innovation without individual freedom for its people?

On other hand would Western society find its way out of doldrums of welfare state, moral decline, and political gridlock? Would it be able to restart its economic growth and move to the next level of prosperity or its current malaise is not curable? The answers to these questions will come in the future in due order.


I generally agreed with ideas presented in this book. The only point that I would like to make is that the unit of evolution mainly used here – society as whole could not provide level of resolution necessary for deep analysis of situation and prediction of future development. I think that the unit of evolution is always at the level of individual and it is clash of ideas in the heads of individuals and clash of individuals with different dominant ideas in their heads that defines condition and dynamic of change for every society. I understand that it is too much to ask for analysis based on history because of lack of sufficient data, but explanatory power at such high level as society is just not enough to achieve reasonable level of predictive power, which, I believe, is final objective of such analysis.

20140914 Clash of Economic Ideas

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This book is detailed depiction of development of economic ideas over last 2.5 centuries, implementation of these ideas in real life, and results of such implementations. This description and analysis pretty convincingly demonstrates that ideas of state control over economy failed everywhere where it was tried. The result was always misery, but extent of it was different from relatively benign misery of American implementation to outright murderous result of Russian implementation.



This book is focused on policy related parts of economic theory and empirical work. In this introduction author gives a very nice preview of each chapter. An important part of author’s view is the statement that economic ideas do have real life consequences, even if they are not direct. Authors describe the process of influence as following: on early stage academic economists come up with idea which them picked up by journalists and popular writers who disseminate it to general population which internalizes them and pushes politicians to implement it in legislative and executive actions.

As to content of opposing economic ideas they mainly relate to two choices:

  • Governments versus Markets
  • Socialism versus Capitalism

The second choice is pretty much made by whole world selecting Capitalism after disintegration of Soviet Union and China’s move to mainly market economy. The first one is still pretty much in play mainly at the level of gradation of how much economy and how much government should be used.

  1. The Turn Away from Laissez-Faire

This chapter sets the stage, describing economic thought on the verge of the First World War. It introduces two figures that will reappear throughout the book, the English economist John Maynard Keynes and the Austrian economist Friedrich A. Hayek. Each subsequent chapter begins with a major economic problem that triggered or revived debate among economists, or a policy experiment to which economists contributed.

The main idea expressed by Keynes is need to end of absolutely free market as result of its failure to avoid depressions and necessity of government intervention to fix various “market failures”. Correspondingly the main idea expressed by Hayek was necessity of free market not only for economic prosperity, but also to maintain human freedom with any government intervention into market being harmful for economy and push of humanity to serfdom.

 2. The Bolshevik Revolution and the Socialist Calculation Debate

Chapter 2 examines the issue of central economic planning versus the market price system, starkly posed by the Bolshevik Revolution of 1917 which then developed into the crucial “socialist calculation debate.”

At the beginning it reviews nearly perfect experiment of implementing pure socialism in a big country: Bolsheviks taking over Russian empire and creating Soviet Union. The results were perfectly disastrous providing tremendous amount of data and absolute prove of Mises theory of impossibility of planning and valid economic calculations in socialist economy. Here also reviewed case of Oskar Lange who came up with proposal of socialist economy that would emulate market pricing and performance. This idea just plainly did not work and he did not even try to implement it when he becomes high-level communist economic functionary in Poland.

 3. The Roaring Twenties and Austrian Business Cycle Theory

Chapter 3 examines pre-Keynesian business cycle theory, in particular the theory developed by Hayek and other Austrian economists, in light of the boom of the Roaring Twenties that ended in the crash of 1929. The New Deal policy experiment of the early 1930s followed in the United States.

Mises/Hayek cycle theory is based on credit expansion caused by low interest rates and government push for cheap money. This causes misallocation of resources to projects that could not be profitable. Eventually this overinvestment creates lots of capital goods without corresponding amount of consumer goods. Excess of money paid for creation of capital goods over availability of consumer goods causes inflation, but more important, at some point investors realize that expected returns on the project will not occur. The cancellation of projects initiates run away from investment and bust. The graphic representation is diagram of value added process that is becoming longer during boom, but contracts when it exceeds public’s savings term. In short, it is cycle caused by variance between savings and investment beyond public’s tolerance. 

  1. The New Deal and Institutionalist Economics

Chapter 4 traces origins of New Deal to the Institutionalist school of economics, especially as represented by the economist Rexford G. Tugwell.

It is notable and important to what extent New Dealers including Roosevelt where in awe before fascist regime in Italy and Mussolini because economically this regime and later German Nazis were very close to their ideas of Government control over cartelized economy. Tugwell was a student of Simon Patten who brought in America German economic ideas of controlling Government as developed and implemented in practice by Bismarck. On demand side Thorstein Veblen author of “The Theory of Leisure Class” introduced notion of “Conspicuous consumption” and believed that Economic Engineers should define reasonable level of consumption and managed economic machine to efficiently satisfy it. The economic institutionalism was lead through second half of XX century by John Galbraith. 

5 The Great Depression and Keynes’s General Theory

Chapter 5 relates how Keynes’s 1936 book The General Theory of Employment, Interest, and Money fomented a revolution in economic thinking about the causes of ups and downs in the economy as a whole.

Keynes really did not cared what caused recessions or depressions. His believe was that market just failed from time to time to maintain equilibrium and fall into “vicious cycle” when low demand led to decrease in production pushing labor out of work and thus decreasing demand even more. The obvious way out was for government to create artificial demand by pumping money into economy to increase earnings and decrease unemployment. Instead of Hayek’s intertemporal triangle Keynes proposed diagram of circular flows of resources between businesses, households, and government insisting that the levels of flow could be changed by government actions within productive capacity of the system. The main difference Keynes model is summarization of current consumption and investment, while Hayek’s is trade off between today’s consumption and investment as future consumption. Another big difference is interest rates. For Hayek it is driven by market mechanism to clear preference between loanable savings (supply) and investment (demand). Keynes denied validity of such mechanism.

Keynes pretty much denied Say’s law that “ Supply creates its own demand”. It is important to note often used misunderstanding of this law when supply and demand are considered as of the same type. In reality supply of one thing create demand for another. Economy grow if shoemaker’s production grew because taxes decreased and more productive people have money to buy shoes so he can make more shoes because he expects higher marginal profit which would allow him to increase demand for whatever he wants to consume let’s say meat. The same reasoning would apply to butcher. As result it will be more shoes and more meat produced and cleared at the market. However if it is demand side and government instead of decreasing taxes just give a pooper money to buy some shoes overall supply of shoes or meat is not going to increase because neither shoemaker nor butcher will expect to get more and therefore will not increase their effort. The only outcome would be increase in pooper’s consumption at the expense of shoemaker and butcher because of inflation.

There is a very interesting point on reasons why Keynes became so popular despite intellectual deficiency of his theory. It is its optimism and insistence on human ability to control economic events that turn people in mass to support it. Too bad it did not really worked out.

  1. The Second World War and Hayek’s Road to Serfdom

Chapter 6 focuses on a very different book, Hayek’s Road to Serfdom of 1944, which grew out of his concern about the dangers of continuing the central planning policies pursued during the Second World War. In the immediate postwar period, very different economic policy paths were taken by different nations.

This chapter also includes an interesting review of Nazi economic policies: Strict currency exchange control; Centralized agricultural policy with import quotes; large public works to provide full employment. As always these policies caused shortages of goods and rationing.

Western intelligentsia also was completely smitten by ideas of economic planning and state control. In Hayek’s view these measures would directly lead to totalitarism. Hayek dedicated his book to socialists of all parties to warn them that their economic push could lead to political result they would hate. The reality of after WWII mass movement to economic socialism in Britain and other countries of the West do not support Hayek’s assertion, but just barely. Rather then stay on the way to totalitarism these countries’ democracies were strong enough at the moment to prevent it. 

  1. Postwar British Socialism and the Fabian Society

Chapter 7 chronicles the nationalizations undertaken by the Labor Party in Great Britain and traces those policies to the socialist ideas that the Fabian Society had tirelessly developed and advocated in the previous six decades.

Implementation of Fabian socialism in Britain plentifully demonstrated that it does not work as economic model, but it succeeded in putting quite a few shackles on British economy so people are still suffering from it.   

  1. The Mont Pelerin Society and the Rebirth of Smithian Economics

Chapter 8 tells the story of a society with a strongly contrasting policy outlook, the Mont Pelerin Society, which Hayek founded after the war to rally the intellectual opponents of socialism. It is mostly intellectual history of rebirth of Adam Smith’s free market ideas that created foundation for next step when economic socialism failed in the West. 

  1. The Postwar German “Wonder Economy” and Ordoliberalism

Chapters 9 and l0 offer case studies of two countries that headed in very different directions and had very different results over the next thirty years. With important input from some Mont Pelerin Society economists, Germany moved in a market-friendly direction and prospered. 

  1. Indian Planning and Development Economics

With important input from Fabian thinkers, India adopted nationalization and quasi-Soviet Five-Year Plans and did not prosper. 

  1. Breton Woods and International Monetary

Chapter 11 tells the story of the 1944 Bretton Woods conference, how and why Keynes and other economists there hashed out an international monetary system that reduced the role of gold and allowed greater scope for discretionary national monetary policies. The Bretton Woods system collapsed in 1971, for reasons that economists have debated. Its collapse coincided with the onset of a period of high inflation. 

  1. The Great Inflation and Monetarism

This chapter recounts collapse of monetary system served as the seedbed for the revival and development of “monetarist” ideas by Milton Friedman and others, who challenged the dominance of Keynesian thinking. 

  1. The Growth of Government: Public Goods and Public Choice

Chapter 13 notes the growth of government in the postwar era and contrasts two leading economic theories that see the growth of government through very different lenses: the optimistic-about-government theory of public goods and the cynical-about-government theory of public choice. 

  1. Free Trade

Chapter 14 is discussion of the long-running debate between free traders and protectionists. 

  1. From Pleasant Deficits to Unpleasant Sovereign Debt Crisis

Chapter 15 examines the clash between Keynesian and “new classical “economists over the benefits and costs of government budget deficits and debt.


In my opinion, based on history of last century there is no intellectual justification for support for big government control over economy. However struggle is far from over, because lots of individuals are highly dependent on government for their wellbeing. These include rich crony capitalists who obtained their wealth through connection with politicians and bureaucrats of government; pseudo intellectuals in education, science, and culture who are highly dependent on grants from government bureaucrats, masses of poor who live in misery of welfare, but afraid of freedom of the market because they have no idea how they would survive it. Last, but far from least it is bureaucracy members themself, mainly at the higher level who know in their hearts, that they would not be able to achieve the same level of control over resources and ability to use them outside of government.

The losers in this system are always individuals who provide real goods and services because huge share of these goods and services going to individuals who do not produce anything of value at all and, more often then not, actually impede production of anything of value. The way out in my opinion is not easy but possible by:

  • Pushing through equal, unalienable, and marketable rights on natural resources so everybody would have something to sell on the market regardless of inheritance, abilities, and luck; therefore providing better access to resources then welfare state does
  • Educating young people and convincing them that they would be by far much better off not only materially, but even, more important, in life satisfaction in environment of free market then in environment of rigid government hierarchy
  • Convincing productive individuals that it is worthwhile to allocate some of their time to support fight against crony capitalism, corruption, and other forms of government intervention because it would bring better return on investment especially initially, than their regular productive activities.

If these measures succeed the political resistance to free market would become extremely week because only well established bureaucrats, politicians, and crony capitalists are really benefit from socialism in all its forms.

20140907 Omnipotent Government

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Old Liberalism was a great intellectual break through in history of humanity, which brought in free markets, expanded division of labor, provided economic support for political freedoms, and dramatically improved quality of life for everybody.

Unfortunately intellectual forces of Socialism and Etatism, which lulled masses into believe that they could be much better off with big government, defeated Old Liberalism. This book is a very detailed analysis of Germany’s case when Etatism in form of National Socialism took over society as whole and brought it into unwinnable war against whole world.

The Germany is only one case of many when Etatism takes society over and proceeds by destroying wealth, freedom, overall quality of live, and often lots of lives. The future is bleak because masses do not have intellectual capacity to understand economics and readily buy into cheap Etatist solutions to they problems even if these solutions do not work. There is nothing inevitable in this development and the fate of humanity still can turn out to be better, but only if masses become enlightened enough to through away all forms of Etatism and Socialism and embrace free markets and Capitalism.



It starts with characteristic of German Nazi party and its program as Labor imperialism based on Marxist ideology. The idea is that resources, especially lands are limited and nations had to fight for them. The winner (which obviously should be German nation) will control more land and use losers as slaves to work on it. This and many other similar ideas come from movement of people away from free market and capitalist economy to Etatism when government more and more takes over economy. Such intervention means expansion of violent resource transfer between individuals within country which substitutes free resource exchange. Correspondingly when extended outside of country, it means violent resource transfer between nations = war of conquest. That is exactly what Germany did during WWII.

PART I: The Collapse of German Liberalism

CHAPTER I. German Liberalism

  1. The Ancient Regime and Liberalism

Germany was late in transfer from Ancient regime of King to liberal regime of people, human rights and parliaments. Germany produced idealistic philosophy, represented in writings of Schiller, and German intellectuals mainly accepted ideas of enlightenment and liberalism.  

  1. The Weakness of German Liberalism

However the German liberalism was adapted only by the part of population. The significant numbers of people came from eastern areas, were less educated, and more prone to obey orders. As result revolution of 1848 was crashed and German liberalism was defeated by nationalism and socialism.

   3. The Prussian Army

Prussian Army from XVIII century to XIX underwent dramatic evolution. It started from point where both soldiers and officers had been randomly pressed into long term services and drilled to become mildness to such extent that army was not able to act at night or in small units due to the fear of desertion. Than it developed into army based on compulsory short-term service of all men with ideological conditioning similar to French revolutionary and later Napoleonic army with high levels of loyalty to the leader. It was expanded and the Royal guard was created to assure availability of loyal force. Eventually by 1860 army became a bulwark against liberalism.

   4. The Constitutional Conflict in Prussia

German liberals who called themselves progressives did everything possible to prevent revolution and civil war in hope to enlighten layers population that supported king, but failed, and eventually retreated during constitutional crisis giving way to Bismarck and his program of Etatism.

  1. The “Little German” Program

The episodes of territorial struggle against France and Denmark opened way to strengthening Prussian army and eventual unification of Germany not under united liberal government, but under King of Prussia and his Prime Minister Bismarck.

  1. The Lassalle Episode

Lassalle – leader of socialists played a substantial role at this point by pushing labor against liberals (progressives) with ideas of socialism and class war. In process he build clandestine alliance with Bismarck since both of them where fighting against capitalism and free market represented by liberals.


CHAPTER II. The Triumph of Militarism

  1. The Prussian Army in the New German Empire

The specificity of Prussian Army was that it was build not within, but above civil administration. It was meritocratic institution and fully reliable tool of supreme warlord – Kaiser. 

  1. German Militarism

The core of this system was the position of army, which was supreme factor of political life. This was a system of disguised absolutism with powerless parliament and Army leaders such as Moltke being courtiers. This system actually failed in the WWI, but it did it in such way that it was not absolutely clear for the people. 

  1. The Liberals and Militarism

Prussian parliament had universal, but unequal franchise divided into 3 equal groups each elected by majority of taxpayers paying together 1/3 of taxes. This way richest group included a lot less people voting then poorest group. As result liberals had majority, but due to militarism they did not have control. Without control they failed to prove their ideas, but took blame for whatever went wrong. Consequently it opened the majority of wage earners to socialist agitation and destroyed ideology of liberalism. 

  1. The Current Explanation of the Success of Militarism

Mises poses the question why capitalists and intellectuals did not resist militarism and why army that was build from lower classes who often supported socialism did not reject semi hidden absolutism? He rejects Marxists explanation of imperialism as stage of capitalism. 

PART II: Nationalism


  1. The New Mentality

The new mentality of Etatism in form of socialism and interventionism replaced Liberalism in the minds of Europeans during XIX and beginning of XX century. It came to Germany from West Europe and firmly established itself with growth of Social Democratic movement that found a pretty nice accommodation with social kingdom of Hohenzollerns with its social security and labor legislation. It fed back philosophy of Etatism to England in France through work of intellectuals from Show and Wells to Fabians. 

  1. The State

This is a short review of notion of state as coercive organization in control of territory and its population. The only difference from a regular criminal gang is that it has no competition within its territory. Mises accepts necessity of the state because only coercion can prevent coercion, but he sees it not as benevolent godlike entity, but for what it is – a violent organization that should be limited as much as possible. 

  1. The Political and Social Doctrines of Liberalism

The essence of Liberalism’s believes are private property on means of production and market as method of cooperation and division of labor. Coercive machinery of state is necessary, but only to defend property and prevent coercion by non-state actors. The control over state should be democratic because legitimacy of state’s coercion depends on voluntary acceptance of state’s rule. The validity of such voluntary acceptance is not possible to define without democratic process. 

  1. Socialism

Socialism is the system of public ownership of means of production that is total state control over economy. Many people believe in compatibility of socialism and democracy, but it failed the check by reality of socialism implementation in multiple countries. This statement follows by demonstration of economic logic of why socialism could not work as advertised. 

  1. Socialism in Russia and in Germany

This part is a review of actual and very sad experience of real socialism as it was implemented in Russia in form of Communism and in Germany in form of Nazism. 

  1. Interventionism

This is a bit softer form of coercive intervention when state does not take over economy, but just interfere preventing it from proper working. This piece includes multiple examples of government intervention, how it normally achieves results directly opposite to advertised, and economic logic for reasons of such wonderfully consistent failures. 

  1. Etatism and Protectionism

This is review of Etatism expressed as Protectionism. Obviously coercion is necessary to force people to buy something produced internally at higher price than could be obtained externally at lower. Eventually it comes down to some people getting more as producers while other paying more as consumers. 

  1. Economic Nationalism and Domestic Monopoly Prices

This is description of another method of Etatism interference into economy: via monopoly pricing and inevitable negative results. 

  1. Autarky

Finally it comes to extreme case of country isolated from international market. Obviously it dramatically increases costs of everything that is not produced most efficiently in this country and there is no such country that would have all quantities and qualities of resources that whole world has, it is the most destructive economic intervention short of socialization of means of production. 

  1. German Protectionism

The specific German case included formation of cartels supported by government that charge high domestic prices in closed market and exported their product at much lower prices to compete on world markets. This allowed Germany conduct highly pro-labor policies supported by high prices. For some 60 years Germany was ahead of other countries, but eventually retaliation did occurred decreasing quality of life for everybody and pushing Germany to seek another method to obtain resources externally, more traditional than capitalism – war of conquest. 

CHAPTER IV. Etatism and Nationalism

  1. The Principle of Nationality

This is review of the process of formation of nationalities in Europe as coercive process that included wide range of measures including education and suppression of traditional culture of minorities. 

  1. The Linguistic Group

Principle of nationality generally requires formation of separate state for every linguistic group, however countries with relatively liberal systems handle perfectly well population with multiple languages without big problems. The notion of race was a latecomer and become prominent well after European states were formed. 

  1. Liberalism and the Principle of Nationality

If Liberalism triumphs, the principle of nationality, separate states, and frontiers become redundant. If personal freedom both political and economic respected throughout the space, it does not matter if person born in country A, speaks in language B, and supports set of ideas C. Such person would be comfortable everywhere and will go to the place where his/her effort would be the post productive for consumers of his/her product as defined by the best return on investment of this person’s labor and capital. 

  1. Aggressive Nationalism

Completely different situation is in environment of Etatism. Now returns are not defined by consumers, but by coercive power of the state. So to get the best access to resources person should join the group more powerful in control of the state. Obviously any minority will be disadvantaged causing it to fight for independence breaking states in smaller and smaller pieces with opposite process of war of conquest bringing these pieces together, but on unequal basis. 

  1. Colonial Imperialism

This is review of colonial expansion of XIX century. It makes a very interesting point that contrary to Marxist interpretation it was not a result of next phase of capitalism. Capitalism does not need territorial expansion because whatever it needs could be bought on the international market and whatever they sell, they can sell at the same place. Colonialism is rather product of Etatism when government bureaucrats civil and military see territorial expansion as source of increase in amount of resources under their control and correspondingly increase in their power. 

  1. Foreign Investment and Foreign Loans

This part discusses international movements of capital and is mainly about movement of Western capital to less developed countries. As usual it generated hate, resentment, and confiscations. The result is decrease of profitability of foreign investment and cessation of such investment making everybody poorer. 

  1. Total War

The old wars of small armies and aristocracies are gone. The new total war between people is the feature of XX century and it makes war much more damaging then it ever been. Etatism removes free exchange creating economic disasters that result in decrease in quality of life for masses that depend on employment for their living. This normally blamed on lack of resources and generates hope to obtain resources from others via victorious war. The only real measure that could prevent war is liberalism that would provide everybody opportunity on the world wide free market. 

8. Socialism and War

Socialists claim that wars caused by capitalism. It is BS. The reality is opposite. Capitalism creates opportunity for cooperation and prompts everybody to try to meet other people’s needs. Socialism is coercion that completely separates resources available to person from results of this person’s efforts. Consequently the logical way to obtain more resources for all members of society is to get them from other people by winning in the war. 

CHAPTER V. Refutation of Some Fallacious Explanations

  1. The Shortcomings of Current Explanations

The fallacy of explanation of nationalism is coming from failure to understand that Etatism is source nationalism. Without state taking from one people and giving to people of preferred nationality, the nationalism has no meaning whatsoever. 

  1. The Alleged Irrationality of Nationalism

This fallacy relates to explanation of nationalisms as irrational. Nazis and other nationalists always promise to take from other nations something of value and give it to their own people. Humanity has a huge experience of this kind of resource acquisition working, so it is quite rational to expect it continue to work. 

  1. The Aristocratic Doctrine

This is a nice description of revolt against masses when intellectuals and bureaucrats revolt against democracy as inefficient and harmful method of society organization and strife to substitute it with rule of “wise kings” selected through formal meritocratic process of tests and best universities. In reality only capitalism with real democracy when people compete on free market of goods, services, and ideas demonstrated superior ability to create wealth for everybody. 

  1. Misapprehended Darwinism

This is a short and nice debunking of Social Darwinism as doctrine of aristocratic intelligentsia that has nothing to do with real philosophy of Darwin and Evolution. 

  1. The Role of Chauvinism

This is explanation of logic and nature of Chauvinism as different from Nationalism. The Chauvinism is just a disposition of character and mind not involving action, while nationalism is all about action and policies. Both despise others and believe in their own superiority, but Chauvinist does business as usual with other, while nationalist uses violence against other. 

  1. The Role of Myths

This is an analysis of myths as fictitious narratives and doctrines that play important role in history as something people actually believe. Socialism, Etatism, and Nationalism are valid doctrines in the minds of their supporters because of acceptance of myths presented in these doctrines, despite their fallaciousness. 

PART III: German Nazism

CHAPTER VI. The Peculiar Characteristics of German Nationalism

  1. The Awakening

The German nationalism became qualitatively different from other nationalisms in 1880s. It formed notions of Germans as superior warriors and producers who are young, energetic, and deprived of access to needed resources by existing world order established by old, degrading, and corrupt western democracies. That was result of disunity of Germany and it will be fixed by unification of Germany that should be dominant power in the world. 

  1. The Ascendancy of Pan-Germanism

Contrary to prevailing narrative neither Junkers of old Aristocracy, nor bankers, nor capitalists and middle class pushed Pan-Germanism. These groups were perfectly happy with existing order and growing ability of compete in free market – activity that brought them wealth and influence. The real engines of Pan Germanism were intellectuals who promoted it via education, books, and other forms of culture. 

  1. German Nationalism within an Etatist World

Germans did not invent nationalism, but rather used it as everybody else. The key notion here is that nationalism makes sense only in conjunction with Etatism because if state controls resources individuals within or without this state can obtain these resources only by the grace of this state’s bureaucracy or via violence either plain robbery or military conquest (the same only bigger and bloodier). Only free market provides opportunity to obtain whatever one wants or needs without violence, but it practically leaves bureaucracy, politicians, and intelligentsia out of business. 

  1. A Critique of German Nationalism

The critic provided includes two main points: one is the unrealistic complex superiority that made German nationalists and later Nazis to believe that they can fight the whole world and win; and another one: complete immorality of ideology that deemed moral anything that would benefit German state and nation. Obviously the great leaders should define what exactly benefit German state and nation. 

  1. Nazism and German Philosophy

This is critic of idea that Nazism is logical outcome of German Idealistic philosophy. 

  1. Polylogism

This animal came from Marxists who, after failing to refute by logical methods “bourgeois” economics, came up with Polylogism that states that thought and logic is defined by the social class, therefore since any thinker belongs some class, both logic and facts could be contested based on personality of individual who present them. Marxists claim to represent proletarian logic, class, and science. Nazis pick it up and created their own Aryan logic, facts, and even science. 

7.Pan-Germanism and Nazism

Pan Germanism had naturally grown into Nazism. Unfortunately other people in Europe just fail to understand that Nazi is not a small group of weirdoes, but rather true representatives of German people who, while fighting each other on details and methods were united in their understanding of goals – expansion and enrichment of Germany via military conquest. 

CHAPTER VII. The Social Democrats in Imperial Germany

  1. The Legend

There are two legends about German social democrats. The first one is that they were fighting against militarism supported by bourgeoisie who was in search of armaments profits. The second one is that they were fighting against Hitler, agent of big capital. Both are untrue. 

  1. Marxism and the Labor Movement

This is about intellectual history of Marxism. Marx started as interventionist, but reading of British economic authors convinced him that interventionism does not work so he moved to complete Hegelian negation of capitalism. Labor movement was not really Marxian, but rather interventionist demanding government intervention on behalf of workers. German Social Democrats managed to build organization on duality of theoretical Marxism and practicality of labor movement. 

  1. The German Workers and the German State

The labor movement’s main weapon in any confrontation with employer was strike. The strike is meaningless if employer can freely use his property and just hire other people if demands of striker exceed market price for labor. The key for success therefore is to deny employer control over his property that could be done only using coercion. In 1870 German government moved to the side of labor and practically stop enforcing property laws in case of strikes. It is an interesting fact that union’s came from above: Bismarck and government. The seemingly anti-socialist laws were just a sham under which socialist movement grew tremendously supported from above by intellectuals and bureaucrats and from below by labor. 

  1. The Social Democrats within the German Caste System

One important service Social Democrat provided to wage earners was creation for them social environment within German caste system that legitimized wage labor as important part of this system. 

  1. The Social Democrats and War

Social Democrats as good Marxists supported civil war between classes and despised imperialistic war between countries in theory. In reality all of them supported their nations. Only when war causes suffering to lower classes the socialist starts agitate against it and tries to use it to take over government power. 

CHAPTER VIII. Anti-Semitism and Racism

  1. The Role of Racism

An interesting point is made here that as meaningless as race in reality is it was used to create a notion of Germans as nation of noblemen by race regardless to actual social standing and in contrast to ignoble Jews. It was partially result of German aristocracy proving itself useless in all areas of achievement including military during WWI. 

  1. The Struggle against the Jewish Mind

While fighting “Jewish Mind”, Nazis actually failed to define what it is and what specific characteristics it has. They also tolerate Christianity, which is a product of Jewish mind if there is one. Obviously socialism is also to significant extent product of this mind and is foundation of both Nazi and Soviet regimes. However Nazis ridiculously claim that only these parts of it that they reject such as internationalism are Jewish product.   

3.Interventionism and Legal Discrimination against Jews

This is a list of Nazi government action against Jews. Obviously because the book was written before Holocaust become a known event, it is a relatively benign list of discriminations and indignities against Jews. 

  1. The “Stab in the Back”

The failure of WWI winners to assert reality of German defeat created an opportunity for legend of “Stab in the Back” of victorious German Army committed by Jews. This legend was not forcefully destroyed and as result it created German illusion of superiority that eventually led to WWII and final defeat with unconditional surrender. 

5.Anti-Semitism as a Factor in International Politics

The interesting dynamics reviewed here led to initial defeat of France and Britain in the beginning of WWII. This dynamic had two sides: in Britain it was growing of popularity of socialism and its international pacifistic logic putting the break on rearmament in the face of Nazi military build up; in France it was Anti-Semitism of Nazi that converted Anti-German French nationalists into force somewhat supportive to Germany based on commonality of their hate for the Jews. 

CHAPTER IX. The Weimar Republic and Its Collapse

  1. The Weimar Constitution

The beginning of this period was characterized by socialist revolution in which contrary to Russian pattern the winners were not communist who wanted to eliminate hostile classes, but Social Democrats who still tried to maintain some image of democracy. In defeating communist they had to ally with vast majority of Germans who did not want to repeat Russian experience. The military power to defeat communists came from remnants of the army led by nationalists. So the democratic Weimar republic was basically created by alliance of anti-democratic forces of socialism and nationalism. 

  1. The Abortive Socialization

This is a description of Social democratic attempt to socialization. It started with creating committee of professors, which amazingly failed to achieve anything.   

  1. The Armed Parties

Here are details of inherent weakness of Weimar republic that led to creation of paramilitary forces by just about every political group. In this brawl Hitler came on the top because this gangs consisted of young people dedicated to fight and not burdened by jobs and families. He also managed extract financial support from business mainly because owners preferred Nazi form of socialist when they remained formally in control to Communists form of socialism when they would be liquidated. 

  1. The Treaty of Versailles

The treaty is defined as failure, but not for usual reasons. Contrary to common wisdom Misses believed that treaty was not too tough on Germany. On contrary, he is pretty convincing in showing that neither territorial changes nor reparations were overwhelming. The failure rather was inability of Britain and France to stick to the treaty and fight for it both ideologically and military when needed. Without such fight the treaty become just an ideological feeder for German nationalism. 

  1. The Economic Depression

The great German inflation was result of monetary policies of socialists of the chair. Mises predicted it in 1912. Depression was created by social democrats and victims went to Nazis because they believed that Nazis could help. 

  1. Nazism and German Labor

The question of why masses of workers who were Social Democrats and Catholics allowed Nazis came to power is invalid. These people were not ideological. They cared about their lives ad believed that Nazis would do better for them. 

  1. The Foreign Critics of Nazism

Nazis won in Germany because they never encountered any adequate intellectual resistance. This is quite understandable because the fundamental tenets of Nazi ideology do not differ from generally accepted social and economic ideologies:

  1. Capitalism is an unfair system of exploitation
  2. The foremost duty of government is to substitute management of capitalists with government control
  3. Price ceilings and minimum wages are adequate method to improve lives of workers and consumers
  4. Easy money make country more prosperous
  5. Everybody who does not agree with statements above is evil and had to be suppressed.
  6. Export is good, import is bad for economy

These common tenets of ideology prevented any serious foreign critic of Nazism. 

CHAPTER X. Nazism as a World Problem

  1. The Scope and Limitations of History

This is a small philosophical discussion about inevitability of historical explanation of event to encounter limitation of individual makers of history. 

  1. The Fallacy of the Concept of “National Character”

Attempts to explain Nazism by German national character are meaningless because there is no such thing as a character prevailing in all individuals of the same nationality. It is uniqueness of historical situation in combination with uniqueness of psychological and ideological status of multiple individuals that is continuously changing over time that defines historical events. 

  1. Germany’s Rubicon

The Nazism is not unique, but rather a consequence of move to autarky. The Germany just got there first and under considerable pressure of consequences of WWI. The Germany’s Rubicon on the way to Nazism was rejection of fee trade in late 18xx. 

  1. The Alternative

The issue in struggle between Nazis and the rest of the world whether world consists of one linguistic group of German masters and everybody else as slaves or it will be world of heterogeneous society embracing all human beings. There is no neutrality or conscientious objectors in this struggle. One either fights Nazis or supports them actively or passively. 

PART IV: The Future of Western Civilization

CHAPTER XI. The Delusions of World Planning

  1. The Term “Planning”

Some people start using “Planning” as substitute of devalued term “Socialism”. It really does not make any difference because compulsory cartel instead of free competition is pretty much the same. In terms of “world planning” it means world socialism under unitary management. 

  1. The Dictatorship Complex

The funny thing about people supporting dictatorship is that they always believe in dictatorship when and if dictator does what they want. As soon as dictator does something they do not like, they are firmly against this form of rule. 

  1. A World Government

The World government is not possible unless everywhere in the world established capitalism with free enterprise, free trade, and free movement of people. In this case government would be minimalistic. Currently governments use violence to provide more resources to some people at the expense of others, with expansion of this process to more groups it would become unmanageable. 

  1. Planned Production

The economic system is too complex and dynamic for planners to be able control it in any meaningful way. 

  1. Foreign Trade Agreements

All agreements restricting free trade are economically harmful. The world bodies based on balance of restrictions would lead to incessant haggles between representatives of countries trying to get some advantage at the expense of each other. 

  1. Monetary Planning

Moving away from gold to feat money at the worldwide scale would cause inflation and severe boom bust cycles hurting middle classes. 

  1. Planning International Capital Transactions

As usual with planning the attempt to use some international body to control capital flows bound to fail due to huge diversity of constituencies and their interests that could be reconciled only via free movement of capital. 

CHAPTER XII. Peace Schemes

This part is pretty much outdated, but the bottom line is still correct: only truly free market, capitalism, and individual freedom can remove wars and violence between countries and peoples. The schemes reviewed:

  1. Armament Control
  2. A Critique of Some Other Schemes Proposed
  3. The Union of the Western Democracies
  4. Peace in Eastern Europe
  5. The Problems of Asia
  6. The Role of the League of Nations 


Original Liberals believed in perfectibility of humans. They developed economic theories of free market and free trade that provided for tremendous growth of wealth. Nobody was able disprove these theories and when socialism become popular Original Liberals proved impossibility of effective socialist planning that nobody was able to disprove. They proved in free market economic theories and real life capitalist practice that it is possible to cooperate without conflict of interest. However they failed because intellectual abilities of vast majority of people are insufficient to comprehend advantages of capitalism. The world is hopeless at least in the near future. However despite original Liberals failure, the currently winning alternative of socialism cannot bring anything but wars, dictatorships, and overall misery. The humanity will be able move on to the better life only when majority become enlightened enough to understand those important points:

  • Durable peace is possible only under condition of perfect capitalism when all resource transfers and exchanges occur voluntary without coercion because that would eliminate any economic causes for wars
  • Free movement of labor would lead to equalization of labor rates throughout the world removing any over/under population problems.
  • Government interference with economy decreases productivity, increases costs, and, most important, generates hate between economic winners and losers because both know that outcome is not fair.
  • Socialism as system of effective organized and planned production is not possible because planners could not possibly calculate proper resource allocation in dynamic system of human demand for goods and services.
  • Etatism could not bring equality because decision making from the top of hierarchical system always creates conflict of interest that could not be resolved without violence. 

The future Mises expect as result of poisoning of population by socialist ideas is bleak. Etatism would divide world into prosperous industrialized West and miserable others who would start wars to take over resources from western minorities making it necessary for westerners to become highly militarized, suppress traditional freedoms, and dramatically decrease quality of live. 

This catastrophe is not inevitable, but highly probable, as Mises saw it at the time of writing.  


As usual I mainly agree with Mises on all economic issues. I also think that only free market could support freedom and prosperity and socialism or any other form of Etatism including welfare state is inevitably lead to decrease in quality of life, war, violence, and over all misery. 

In addition to detailed description and analysis of history of National Socialism in Mises’ land of birth Germany I could add my experience of similarly disgusting form of Etatism: International Socialism in country of my birth Soviet Union. 

However I completely disagree with is evaluation of Socialism power as result of insufficient enlightenment of masses. I think that many supporters of Old Liberalism and overall Capitalism are missing dynamics of this system when, while being beneficial for everybody at the long run, it is often detrimental to individuals over period of their one and only one specific life. 

The individual who is at the bottom of society hierarchy, has no property, and has nothing significant to offer on the labor market cannot obtain satisfactory level of resources to accept the system. Such individuals are bound to fight it and if Socialism, Welfare state, or any other form of Etatism promised them more resources, they would support it either with their votes or with their guns. It would be only rational for them to do it. 

The key for bringing this majority to the side of free market is to grant these people something that would immediately assure acquisition of at least the same amount of resources available them now and free them to search for additional application of their talent on the free market with plentiful educational opportunities. I believe that the way to do it is to establish equal, unalienable, and marketable rights for natural resources so individuals who use more than average had to buy these rights from individuals who use less. 

The same is not necessarily applies to intellectuals who are not always stupid despite spending lots of time in brain damaging educational establishments. Many of them understand quite clearly that socialism does not work, while free market does. However they also understand that they would never be able to achieve the same level of resource acquisition on the free market, as they are able to achieve as reliable cogs in some hierarchical system of the state. No amount of enlightenment will change minds of these people. 

It would not be possible to bring older and well-established intellectuals on the side of free market, but it should be possible to move to this side young intellectuals. By the same pattern as with masses without marketable skills, if granted equal rights for natural resources they would be set free to seek whatever application they want for their talents either for additional resource acquisition on the free markets, or just a personal life satisfaction. As a way to enjoy life, it would beat the hack out of being even well paid bureaucrat.

 The bottom line is that tremendous improvement and prosperity is right around the corner, if we can manage to handle property rights in society well enough.




20140829 Inner Pulse

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Every human being has an “Inner Pulse” which deeply connected to health and well being of this individual. This “Inner Pulse” not really susceptible to technology and scientific analysis, but clearly represents itself in unexpected medical outcomes both positive and negative. The only connection to this “Inner Pulse” could be via self-analysis and/or interaction with other humans, but it is not easily controllable.



Author defines Inner Pulse as a life force that is somehow not limited to material condition of body, but exists somewhat independently and can impact body’s survival or destruction. The Inner Pulse is responsible for unusual recoveries that seems to be medical miracles, but it also could be responsible for person succumbing to disease even if pure medical condition is not that bad.

Part One: Knowing Yow Inner Pulse

Chapter 1: Surgeons of the Mind

In this chapter author recounts history of his own fight with depression and how he recovered by finding balance between spiritual and physical world.

Chapter 2: The Pulse of Recovery

This chapter is recount of several stories about individuals who went in coma and remained in it for a long time. Sometimes recovery occurred despite seemingly medical impossibility. This caused author to look at non-regular communications channel between patient and doctor and at all kinds of out of body experiences.

Charter 3: One Patient. Manu Pulses

This is probably the most interesting part of the book. It reports case of multiple-personality patient who suffered from diabetes. The interesting part is that not all personalities had diabetes so when patient switched from one personality to another, level of sugar in the blood also changed. If true, it is an amazing example of direct influence of mind on complex bodily function completely out of conscientious control.

Chapter 4: Inner Pulse Rising

This is another story demonstrating mind’s ability to override condition of body in order to achieve some passionately required objective. In this case it was revenge. The paraplegic patient hated his former business partner who stole his money. At the end he was able temporarily override his condition, walk out of his chair and shoot his enemy. Interestingly enough he was not able to raise gun to the level to hit vital organs, so he ended up wounding his enemy in the leg before collapsing. Author sees it as sample of human ability to accumulate power of inner pulse and apply it in such a way that seems to be beyond human abilities.

Chapter 5: Radar to Die

This chapter is about opposite situation. Patients who seem to be in reasonably good medical condition have feeling that they are dying and it becomes self-fulfilling prophecy. From here author goes to discussion of premonitions from Titanic passengers who missed the voyage because of it and then to experiments with electric current when brain action was recorded before current was applied. The final anecdote is about famous cat in nursing home, which came to people shortly before they died, even if nobody knew that the end is near.

Part Two: The Healing Pulse

Chapter 6: Dancing in the Dark

In this chapter another case of seemingly unexplainable illness described, but this time with pretty clear and non-spiritual explanation. The case was result of abnormal function of thyroid gland that expressed itself through hysterical behavior of patient. The correct treatment removed the problem, but the case here used to discuss an ancient obsession with demons, spirits, and exorcisms that were applied to individuals in such condition.

 Chapter 7: Infection of Body, Infection of Spirit

This is another story about patient whose condition was highly influenced via mind, this time due to media hype about superbug. It turned out that superbugs are not really super and are well known in hospitals. It was not bug, but hype that was new. In short the patient condition dramatically worsened due to the hype for no real medical reason. It came back to normal after hype was over.

 Chapter 8: Never Say Die

This is another story about a patient who should be dead judging by her medical condition, but nevertheless survived. This time it was author’s aunt and he believes that her survival was caused by her special psychological characteristics, especially stubbornness. He also brings in results of studies that show irrelevance of positive attitude to level of cancer survival. It seems that the only trait at least relatively relevant is will to live.

 Chapter 9: Radar to Live

This time it is about a patient who felt that something wrong with him, got prove from medical science and survived with psychological help from deep reliance on religion.

 Chapter 10: The Black Swan

This chapter starts with reference to Tomas Mann’s novel “Black Swan” about menopausal women who mistakenly perceived cancer related bleeding for rejuvenation. It follows with real live story about patient who was stressed and become ill as result. Eventually she was treated successfully, but not after very difficult diagnostic process. Author references book by David C. Clarke “They can’t Find Anything” dedicated to the problem of stress inflicted symptoms and expanded diagnostic tools necessary to identify such illness.

 Chapter 11: The Truth about Psychic Healing

This chapter is about psychic healing and more specifically about psychic named Desmond Darrel who contacted author and informed him that he did “reading” of author from picture on web site and found low level of functionality of author’s lungs. It was true because author at the time was recovering from respiratory virus. Such occurrences of information received from psychic coinciding with actual health condition of author made him to believe in psychics’ ability to read “inner pulse” and had at least some influence on its functioning.

 Part Three: Tile Pulse of Power

Chapter 12: The Strongest Inner Pulse

This chapter is about a few individuals who verifiably achieved impossible feats with their bodies. Specifically it is about Houdini and David Blain. Author believes that these achievements are result of unusual ability to control mind-body connection by these individuals.

 Chapter 13: Who Dies? Who Lives?

This is about another outstanding patient Todd Barnes, a poet, and his non-traditional cancer healer Emanuel Revici. Revici started as a regular medical doctor but then in his 60-70s turned into healer creating cocktails of unknown ingredients to treat cancer. Despite failure of the healer as demonstrated by analysis of outcome for terminal cancer patients who were treated by him, in this particular case the healer was successful and Todd lived much longer than people in this condition normally do. Author attributes it to healer’s ability to establish a special relationship with patient that dramatically improved situation. This result leads to discussion of a few books and experiments related to treatments directed at mind-body connection. As usual the formal experiment and statistics of such treatments does not show their effectiveness.

 Chapter 14: Considering the Alternative

This is about alternative medicine. It references a book by R. Barker Bausel “The Snake Oil Science” which demonstrates that mechanisms of convincing in effectiveness of such treatment. As usual formal scientific analysis of outcomes fails to confirm such effectiveness.

 Chapter 15: Miracles and the Inner Pulse

Another story about patient and bunch of coincidences that, in author opinion, represent small miracles sometimes related to religion. However author states that he believe that these miracles do not contradict laws of nature, but just represent our deficient understanding of “inner pulse”. At the end he provide example of famous rabbi Schneerson – the producer of many medical miracles, at least according to his worshippers, who was not able to handle his own stroke any better then regular person. The final conclusion: “Strengthening his failing inner pulse was beyond even great rabbi’s ability”.

 Afterword: All in Good Time

This is quite a bit more of personal family history with references to “inner pulse” as related to medical conditions.


It is an interesting collection of medical cases demonstrating connection between mind and body. My philosophical attitude to this is simple: I do not see any separation between mind and body with mind being a specific condition of brain’s neural networks at a given moment of time. Being highly complex and time dependent this condition quite possibly could not be fully known externally any more then position and moment of particle in Uncertainty Principle of Quantum Mechanics. However even granted this impossibility, the level of knowledge in mind/body connection will certainly increase and dramatically so with advance of technology. I believe it is quite possible that future medicine would include much more treatments of body via external influencing on mind that it is conceivable now.


20140823 Mises, Ludwig – Liberty and Property

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Capitalism is the only form of society that proved to support individual liberty and material prosperity. The movement to socialism created by state dependent layer of society: intellectuals and bureaucrats who seek to retain and increase their control over resources at the expense of people who create these resources. This movement would not only fail to deliver a higher level of prosperity promised by its leaders, but would also deprive people of liberty.



Part I: “At the end of the eighteenth century there were prevailed two notions of liberty, each of them very different from what we have in mind today referring to liberty and freedom.”

The first notion of liberty originating from Greek philosopher was notion of liberty for qualified individuals, necessarily a minority of population, who are full-rights citizens with others being they slaves or non-citizens not deserving it. This was liberty within a group (state) to define group wide decisions and actions.


Landed aristocracy as defense against royal absolutism developed the second notion of liberty – liberty of individual (aristocrat) from the king (state) or any other group.

 Part II: “The pre-capitalistic system of production was restrictive. Its historical basis was military conquest.”

The capitalism expanded the second notion of liberty to property owners as necessary condition of managing their property in productive way and produce goods and services for everybody. It greatly increased amount of resources available, but moved them out of control of aristocracy and its clients: professional intellectuals and bureaucrats, making these two groups mortal enemies of the new method of production and society arrangements.

 Part III: “What vitiates entirely the socialists’ economic critique of capitalism is their failure to grasp the sovereignty of the consumers in the market economy.”

Intellectually the idea of socialism is result of poor understanding of working of capitalism, specifically of the fact that workers are also consumers and due to competition any squeeze on workers compensation comes back to workers as decrease in consumer prices. By combining all productive resources under state control, socialism substitutes sovereignty of customer with sovereignty of dictator as it was demonstrated by real live socialism implementation in all its forms either by Russian Communists or German Nazis.


Part IV: “It was different in the esoteric discussions among the inner circles of the great conspiracy. There the initiated did not dissemble their intentions concerning liberty.”

Socialists philosophically oppose liberty even if they speak about it all the time. They use the Newspeak as defined by Orwell using usual words to express completely opposite meaning of these words as they where traditionally used. They support freedom when they are not in power to propagate their ideas, but once in power, they declare that discussion is over and suppress all intellectual freedoms.

 Part V: “Romantic philosophy labored under the illusion that in the early ages of history the individual was free and that the course of historical evolution deprived him of his primordial liberty.”

The romantic notion of liberty as natural condition is plainly untrue. Liberty is not possible without resources so the only time in history when big numbers of people were free even relatively is when capitalism is main mode of society. As soon as resources shifted from individual property to government control, liberty starves and dies without resources.

 Part VI: “However, one does not exhaustively describe the sweeping changes that capitalism brought about in the conditions of the common man if one merely deals with the supremacy he enjoys on the market as a consumer.”

Another huge benefit of capitalism is that it allows individuals save money and direct them to whatever investment they consider the best giving them liberty to define direction of economic development in the way that benefits them most. All socialist schemas including welfare state tend to waste and misallocate resources denying individuals liberty to enjoy results of their savings.

 Part VII: “The distinctive principle of Western social philosophy is individualism. It aims at the creation of a sphere in which the individual is free to think, to choose, and to act without being restrained by the interference of the social apparatus of coercion and oppression, the State.”

Individualism of western society and capitalism form of production produced tremendous wealth and improvement in lives including the great expansion of individual liberty to do what individual wants to do. Any move away from capitalism into direction of either Nazi or Communist utopias would inevitably limit individual freedom and bring material decrease in quality of live.


I find it interesting that at least partial explanation of socialism attractiveness explained by poor understanding of capitalism with its competition and market prices that led to nearly worshipping attitude to such relatively insignificant feature as planning and popular believe among educated people that socialism would deliver superior economic performance. The history very convincingly demonstrated that even after complete failure of real socialism as economic system the socialist ideas morphed into ideas of big government and welfare state. The state dependent intellectuals and bureaucrats cannot anymore promote economic efficiency of big government, but they did not give up. Instead of socialism with its state monopoly on everything they now agree to leave private enterprise, but they want to control it to maximum extent via regulations and distribute produced goods and services the way they considered the most fair and efficient, mainly meaning distribution to their own benefit. I think it would be as distractive as their original ideas of full socialism, but the destruction would be slow moving disaster consistently decreasing quality of life for vast majority of people.

 In order to avoid it we need to find a way to bring to capitalist side all these people who are not competitive in free market economy. Otherwise they will support welfare state despite the misery it brings to them because they do not see any real way to become competitive and without it they are afraid to loose even this miserable income they get from food stamps and such.

The equal, unalienable, and marketable rights on natural resources would make this people independent from bureaucrats and intellectuals of welfare state and make them instant property owners and supporters of capitalism.


20140815 Kropotkin-Mutual Aid

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This book is written as counterargument against people who embraced Darwin’s theory in the most primitive way possible: in the line with Hobbes’ wars of everybody against everybody else with survival of winner (fittest). The main idea of this book is that not war, but rather cooperation of everybody with everybody, which allows individual organisms to survive continuing struggle with environment for acquisition of necessary life resources. The book is filled with examples of cooperation real or perceived from all points of biological specter from ants to contemporary humans.


This book presented as illustration and justification of idea that mutual support is much more important then struggle for survival of individual. The main point is made that author could not see examples of life and death struggle between individuals while at the same time stressing environmental causes of survival’s difficulties. Eventually author comes up with “Law of Mutual Aid” stating that it is an important factor in evolution not appreciated by followers of Hobbes.

These two chapters represent a long list of animals doing something together that author considers being a mutual aid. This list includes just about all animals known to biologists of XIX century from ants to lions. The examples reviewed:
• Invertebrates.
• Ants and Bees
• Birds, hunting and fishing associations. Sociability. Mutual protection among small birds. Cranes, parrots.

• Migrations of birds. Breeding associations. Autumn societies.
• Mammals: small number of unsociable species. Hunting associations of wolves, lions, etc. Societies of rodents; of ruminants; of monkeys.
• Mutual Aid in the struggle for life and Elimination of competition in Nature.

The same logic that was used for congregation of animals in groups is used for primitive human societies known at the time with the same inference: individuals are not fighting each other all the time, but rather cooperate in acquisition of means of survivals. The humans obviously add a lot of complexity if compared to animals bringing in notion of ownership both individual and group over various parts of nature: territory, water, cattle, and such. Author also reviews the phenomenon of war and private property, but seems to be treating it as aberration. Examples provided: Bushmen and Hottentots, Australians, Papuans, Eskimos, and Dayak.
Author reviews history of society development in Europe with the same objective: to stress examples of mutual aid as rejection of struggle of individual against individual. However it seems that all examples he provides apply more to the in-group cases, rather then abstract help: Towns and Guilds, Development of trade and legal system; mutually beneficial relationships between lords, towns, and peasants.

Final two charters describe contemporary for author (end of XIX century) situation of struggle between state and village-community organizations of society. Obviously as anarchist he opposes state and loves communities and all forms of mutual aid from cooperative businesses and self-insurance groups to unions and other mutual help associations.


As usual I have a difficult time to understand why people do not see the obvious fact that humans live in complex multidimensional world and themselves are complex multidimensional entities. The evolutionary theory does not suggest that individual organism survives in battle with other individual organisms of the same type. It does not even depend on scarcity of resources. All that it says is that organisms which survive long enough to pass on their genes to next generation do pass these genes to next generation with all their features whether beneficial, detrimental, or neutral, while organisms that fail to pass their genes to the next generation would not have their features represented in nature after that. From this point of view the typical notion: ”survival of the fittest” is obviously incorrect. It should be “survival of minimally fit and sufficiently reproductive”. The method of fitness fully depends on environment, which includes not only individual organism itself but also other organisms around and not necessary of the same species. In this view both cooperation with and war against other organisms are just tools that organism uses to achieve its objectives defined by its genes and environment so the infinite number of examples could be found for all tools and their variations and combinations: cooperation, aid, war, extermination, and anything else conceivable.

20140809 Up Side Down

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This is a simple book with simple and very American idea – the failure is not only an option, but inevitable event in everybody’s live and the only way to achieve anything is not to be afraid to act, sometimes succeeding, sometimes failing, but always learning.


1. FAILURE IS FUNDAMENTAL – How a Brain Scientist and a Psychologist Hedged Me Stop Procrastinating
It starts with experiment when a number of highly educated engineers failed to build a structure from spaghetti, while kindergarteners succeeded beautifully. The key was trial and error which kids used enthusiastically, while engineers wasted time trying to apply abstract thinking. The point is made that trial and error, or in other word failure and recovery, is a natural way to succeed. An additional point is made about external evaluation. Praise for success makes people protective of success, often by avoiding challenge. Praise for effort makes people to apply more effort. This brings in critic of high stakes testing and selection culture when failure could disable person for life. The alternative is a computer game learning structure: multiple low stakes trying with movement ahead after obtaining full command at the current level of the game.

2. THE VIRTUOUS SOCIETY – What Two Economists and an Anthropologist Can Teach Us about Free markets
This starts with Vernon Smith’s research and modeling of California energy market in 1990s. The lesson is that failure is valuable only if there is feedback. If it is disconnected like in case of user disconnected from the cost of used energy, the system fails. Moreover the success or failure of market depends on rules. Market based on rules and morality in New York works, but rule-less and amoral market in Moscow fails. The research shows that market creates rational results even from irrational behavior. Another series of experiments produced generic rule of rules: participants should communicate to discover workable rules. From anthropological research and chimps comes notion that human exceptionalism originates in ability to cooperate which enhanced by ability to communicate. The rest of the chapter dedicated to fairness of hunters versus fairness of farmers, that is fairness of returns on ones labor and fairness of sharing as insurance in unpredictable environment. As illustration the difference reviewed between American and European attitude to business failure. European attitude – failure is the end of career, American – keep trying.

3. THE EXPERIMENTERS – Why There Are No Guarantees in Hollywood or Silicon Valley
This chapter is pretty much about the simple fact that nobody really knows future and success and/or failure often is just unpredictable. As example it reviews 2 similar stories about movies: Titanic and Waterworld. One was highly successful and another flop. Then it goes through Tetlock’s research and failure of experts to predict. Other forms of attempts to predict such as pilots and small scale experimentation also reviewed using history of welfare reform, LA school lunch menu massive change, and new Coke debacle. The main point is made at the end based on Hollywood’s methodology of screening movies on the small scale and fixing what is fixable before rolling it out. In other words: real live experimentation with errors and corrections.

4. ACCIDENTS, MISTAKES, FAILURES AND DISASTERS – What the Hospital System Can Teach Us about the Mistakes We Make
This chapter is about critical mistakes related to emergency health problems. It is based on author’s personal experience and demonstrates how mistakes are made in the situation of life and death for patients, but routine business for doctors and nurses. It also discusses how small mistakes cascade one on the top of another leading to catastrophic consequences. The big point here is that people often focus on results forgetting about process and by doing so create opening for cascading sequence of small errors growing into the big problem. The focus on a process could limit possibility of such event.

5. CRISIS – What a Bad Breakup Can Tell Us about the GM Bailout
This chapter starts with musing about failure sometimes being “the best thing that ever happened”. From there it goes to continuing normalcy of type of mistakes that people do when dramatic changes in situation are not responded with dramatic changes in behavior. Example is provided of people behavior in World trade center after attack. Some business examples also reviewed such as GM and Solindra.

6. ADMITTING YOU HAVE A PROBLEM – What Gamblers Anonymous Could Have Taught Dan Rather
This chapter is about inability to see reality when individual has predefined approach. The Dan Ratner’s story of using false documentation on Bush’s desertion is a good example. It goes through typical causes of such blindness: concentrated attention to one point leads to missing another (gorilla in the basketball game), Bending the Map (one does not know where he is and does not know that he does not know), and Confirmation bias (I see only what confirms my opinion)

7. GETTING UNSTUCK – Adopting the Way of the Shark
This chapter is based on author’s personal experience of being unemployed, unloved, and frustrated. The method for recovery from all these unpleasant situations: keep moving. Keep looking for job, for love, for whatever else you need, but do not stop. Keep processes going and eventually you’ll get result. An interesting note on American exceptionalism: it is easier to fire people in America, which means lower risk of loses when hiring that results in higher level of opportunities.

8. BLAME – Blame-storming and the Moral of the Financial Crisis
This chapter is about blame allocation and human propensity to find agency everywhere whether it is there or not. It also uses a nice new term: Groupidity meaning doing stupid things because group does it. Interesting turn in regard to agency seeking is its link to control: If it is the agency who does it the agreement potentially could be achieved either through bribe, submission, threat, or whatever so it is controllable. If there is no agency, then no control is possible which is difficult to tolerate. From here author goes to search for scapegoat and death penalty debate.

9. Punishment – Why Consistency Is the Secret to Breaking Bad Behavior
From finding whom to blame it is only logical to go to discussion of how to stop or even prevent bad behavior. The method to do it found in consistency of punishment and it is reviewed based on story of program for rehabilitation of criminals with nice abbreviation HOPE that is based on inevitability and consistency of punishment.

10. FORGIVENESS – How I Learned to Stop Worrying and Embrace Easy Bankruptcy (Though Not Personally)
The chapter is dedicated to role of forgiveness as it represented in American bankruptcy code in second chance opportunity. This specifically American cultural trait – availability of 2nd or even 22nd chance provides for much lower level of fear of mistake and therefore for better learning opportunity that lead better final results.


I am pretty much agreed with majority of points that were made in this book. I would also like to stress something that is not necessarily obvious: there is really no other way to learn anything except for an old good trial and error method and there is no place in the world where errors have less negative impact on future opportunities then in America. This is the greatest advantage of this country comparatively with everybody else.

20140802 The Righteous Mind

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Humans are genetically conditioned to have moral philosophy, which defines their individual behavior and expectations they have for rules of behavior in the group because human evolution worked at two levels: individual survival and group survival. This genetic makeup defines to a large degree our thoughts and action via unconscious intuition for up to 90% with remaining 10% defined by conscious reasoning. There are 6 different dimensions of morality, which define individual’s belonging to specific ideological/political group. These are: Care / Harm, Fairness / Cheating, Loyalty / Betrayal, Authority / Subversion, Sanctity / Degradation, Liberty / Oppression. Political movements in this view are not equally effective because American Liberals are mainly one-dimensional around Care / Harm, Libertarians are one-dimensional around Liberty / Oppression, while Conservatives are multi-dimensional around all 6 dimensions. This gives conservatives advantage on the long run. The final call to everybody is to try to understand each other rather then fight because healthy society needs all these views.


This book is designed as a tour of human nature and history from point of view of moral philosophy. Its purpose is to provide a new way of thinking about religion and politics. Each part of this book reviews one key principle of moral philosophy.

PART I Intuitions Come First, Strategic Reasoning Second
1. Where Does Morality Come From?

The method used to analyze people’s moral attitudes is developing a story challenging moral judgment and collect reactions of individuals to these stories.
The results led author to a new type of answer to the question of this chapter. The typical answers are either morality is innate quality (a nativist answer) or it is coming from childhood learning and socialization (an empiricist answer). The author’s answer is more sophisticated combination of typical two:
• The moral domain is varies by culture with Western culture being more narrow then non-western sociocentric cultures
• People have gut feelings especially about disgust and disrespect with moral judgment build on the top to justify these gut feelings
• Morality could not be self-constructed by children exclusively (rationalist point of view), it requires cultural guidance from adults.
The author’s proposed combination: “we born with innate righteousness, but we need cultural training to develop knowledge of what to be righteous about”.

2. The Intuitive Dog and Its Rational Tail
Here author introduces a key metaphor of this book: rider and elephant with rider being a conscious mind and elephant being an unconscious part of brain both genetically provided and developed through interactions with environment. In order to win an argument and/or effectively communicate one should talk to elephant (intuition) first and supply reasoning for rider second.

3. Elephants Rule
This chapter designed to support the main principle of moral philosophy presented in part 1: Intuitions first, reasoning second. Six areas of experimental research to support it provided:
• Brains evaluate instantly and constantly
• Social and political judgments depend on quick intuitive flashes
• Bodily states sometime influence moral judgments
• Psychopaths reason but don’t feel
• Babies feel, but do not reason
• Affective reactions are in the right place at the right time in the brain. This one relates to biological backbone of morality and ethics (E.Q.Wilson’s consilience) when something inside absolutely forbid some actions or makes a must for some other actions.
The chapter ends with another important question: why evolution selected such a complex structure when reason used on the top of intuition providing support for something that is not always the truth. The tentative answer is that it may be because truth is less important for survival then reputation so reason main role is as inner lawyer rather then inner scientist.

4. Vote for Me (Here’s Why)
Here the human behavior reviewed as mainly driven by intuition with reasoning used as politician to obtain votes of other people. Five areas of research demonstrate:
• We are obsessively, but often unconsciously concerned with what others think about us
• Conscious mind serves more as press secretary then as decision maker
• Lies and cheating used extensively and so effectively that we themselves believe them
• Reasoning uses important technics for this. When our intuition wants to believe something we as “Can I believe it?” otherwise we ask, “Must I believe it?” It is nearly always YES to first question and NO to the second.
• In moral and political matters we are more Groupish then selfish.

PART II There’s More To Morality then Harm and Fairness
5. Beyond WEIRD Morality

This chapter describes handicap of being WEIRD and unable to see things differently from regular American liberals point of view as legitimate. Author’s trip from being close minded liberal to something more pluralistic in his attitudes somehow brings him to idea that western culture is more narrow then other cultures lacking ethics of community and divinity. However the main point is that moral matrix bind people together making them blind to moral matrixes of other groups.

6. Taste Buds of the Righteous Mind
This chapter is based on metaphor of morality as taste with narrow morality being bland and tasteless as food without salt and spices. It also discusses 5 foundations of morality and their role in evolutionary fitness of individual and groups. These are:
• Care / Harm
• Fairness / Cheating
• Loyalty / Betrayal
• Authority / Subversion
• Sanctity / Degradation

7.The Moral Foundations of Politics

This chapter is a more detailed review of 5 foundations with textual and visual examples of polar attitudes for each of them in American attitude to politics.

8. The Conservative Advantage
This chapter reviews data on comparative intensity of appreciation of value for different parameters and finds out that liberals are mainly two dimensional people putting high value on Care and Fairness and low value on other 3 parameters, while conservatives are multidimensional putting high value on all 5 parameters. Another interesting discovery is that that there is different understanding of the same values. For example Fairness is based on equal shares for liberals, but on proportionality of returns to inputs for conservatives.
This chapter also provides an evidence for deficiency of 5 parameters of Moral Foundations Theory and argues for necessity to add one more dimension: Liberty / Oppression.

PART III Morality Binds and Blinds
The Central Metaphor of this part: We are 90% Chimp and 10% Bee.

9. Why Are We So Groupish?
This chapter is about going back to Darwin and it considers human evolution as a dual process: individual and group evolution when some part of genome about 90% relates to individual survival and another 10% to group survival. The related science is presented in four exhibits:
A: Major transitions produce superorganisms such as groups or societies
B: Shared intentionality generates moral matrices. It means individuals in the group collaborate, divide labor, and develop norms to achieve common objectives
C: Genes and Culture coevolve. In other words the cultural evolution occurs in individual’s gene, which support or restrict survival of individual in whatever culture he/she happens to be.
D: Evolution can be fast so 30-40 generations produce significant difference. For humans 40 generations would be less then 1000 years.

10. The Hive Switch
It is about innate joy of being part of collective such as marching troop. A switch to hive mode could make even individualistic person enjoy being a part of collective. Oxytocin and mirror neurons could be a bio mechanism supporting this happy cog mode. The inference is that we are Human Duplexes who live mainly in self-sustainment mode, but from time to time under special circumstances we are conditioned to switch to hive mode when overriding objective is group sustainment mode all the way to self-sacrifice if needed.

11. Religion Is a Team Sport
This chapter reviews religions as method of individual adaptation that increases chances of group survival. From here comes definition of moral systems:
Moral systems are interlocking sets of values, virtues, norms, practices, identities, technologies, and evolved psychological mechanisms that work together to suppress or regulate self-interest and make cooperative societies possible.

12. Can’t We All Disagree More Constructively?
This chapter provides political analysis of America society along moral dimensions that are valued differently by main participants in political game liberals, conservatives, and libertarians. The point is made that all groups are necessary and provide healthy counterweight to each other. The final inference is that all groups should tolerate and listen to each other to avoid blind promotion of their cause.


I am fully agreed with and appreciate main points of this book. However I see problem of infighting a bit different then author. He sees it as honest disagreement between individuals with different genetic makeup, upbringing, and experience all of which want prosperity of society as whole. I do not think that it is completely true regardless of what people tell to themselves and others. I see world as divided between individuals who have deep internal need to control others via coercion and individuals who can live without such control over other or even feel repulsion to having it. The Coercives typically support big government regardless either it is big in suppressing economic freedoms or intellectual freedoms, or lifestyles or whatever. The big issue of our time is not to find way to accommodate Coercives either in form of American liberals hell bound to coerce people into their government healthcare, regulation, and ideological believes; or in form of Islamic mullahs hell bound to coerce people into their religion. In both cases accommodation is impossible except in form of submission. The only way is to win is by depriving Coercives of any ability to use coercion. In case of American liberals it is probably possible to achieve via democratic elections by making electorate more supportive of free market by creating unalienable property rights and making everybody effective participants in market exchange. In case of mullahs I think the war is inevitable and it is already going on for some 40 years ever since mullahs pushed out secular powers in Muslim world. In both cases only decisive action would stop coercion. In both cases lack of decisive action would lead to continuing pain and suffering for years to come.

20140725 RACE-Troublesome Inheritance

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The differentiation of human into races is not skin deep and mainly defined not exclusively by culture, but rather by genetics that has significant impact on social behavior, society and its culture. These genetic differences occurred due to different evolutionary paths that led to formation of different races over period of 50K years after humans moved out of Africa. This is a scientifically provable fact and it should be taken into account, however it in no way, shape, or form should impact equality of races and equality of opportunity for all individuals.


Decoding of human genome at the end of XX century opened new options for research not only about human individuals, but also about human society. The new knowledge developed from genetics demonstrates that human biological evolution did not stop with advance of more or less efficient society about 200k ago, but rather has been recent, copious, and regional. The new knowledge also encountered strong cultural and psychological barriers created after racist horrors of XX century.

These barriers designed to established once and for all that all human beings are similar enough so no racial differences exists. Whatever difference could not be denied is just insignificant. However the simple facts discovered by genetics demonstrate that all humans, while coming from the same source in Africa, moved elsewhere around the globe and in processes developed via continuing evolution, somewhat different genetic ability to adjust to different environments. Examples provided are:
• Lactose tolerance in people of North European origin
• Tolerance to low oxygen in air in Tibetans
• Multiple genetic-medical parameters with statistically significant variation between races.
Overall evaluation provided that about 14% of genetic variance in humans is due to evolution occurring after human exit from Africa.

The other area where contradictions developed is the area of social sciences where denial of any significant genetic impact on human behavior and believe that it is completely defined by culture in which individual is raised is culturally required.

The author reviews differences between individuals coming from different races and cultures in various areas of societal activities and testing such as IQ tests, proficiency variation in sports, music, social behavior, economic disparities, and such.

This chapter is a review of racial theories of the XIX and first half of XX centuries. It is pretty clear from this review that these theories where based on external characteristics of human beings and that empirical confirmation of their validity failed.

Moreover since all this was highly politicized despite failing to produce scientific prove of such differences, it winded up creating pseudo-science with practical actions leading to catastrophic consequences for humanity. Even in cases when empirical science could be more or less validated such as inheritance of features like individual height or blond hair, the approach to humans as cattle that could and should be subject of selective breading did not do any good to societies that tried to implement it.

This chapter compares chimpanzees’ and human society and reviews genetic differences between individuals who comprise societies and their evolution. One of the most interesting findings is that key difference between chimps and humans is genetically deep-seated ability of humans to cooperate and complete genetic inability of chimps for cooperation. This genetic ability to cooperate led to creation of family with male human cooperating with female greatly increasing chances for survival of the next generation.

The case is even made that invention of weapons greatly downgraded value of individual physical strength leading to increase in procreative chances of smaller and weaker males, who were smart enough to compensate it with superior weapon handling and tactical skills.

After that chapter goes into review of biological foundation of behavior such as oxytocin and MAO-A gene that was linked to individual ability to control aggression. The point is made based on research that genetics make significant impact on individuals’ inclination to cooperation and aggression, while these genetics are significantly and consistently different between races and even different groups within races.

The final point is made that society and its environment drive genetic evolution of individual belonging to this society so the trait such as lactose tolerance and aggressive behavior helped individual to survive in pastoral society where herd could be easily stolen and should be constantly defended, while impeding or being irrelevant for survival in agricultural society where harvest could not be easily stolen and compliance to the leader of big group defending territory is rewarded much better then undisciplined aggression.

This chapter is am attempt to answer question if races exists. One group of intellectuals is firmly rejecting the idea of different races claiming that differences are insignificant. Another group is accepting that races exist, but claims insignificance of this fact. There is an interesting difference between anthropologists. Among physical anthropologists (dealing with bones and bodies) 50% believe that races exist while among social anthropologists (dealing with people and cultures) only 29% believe that races exists. However the neutral evidence: ability of police departments correctly identify race of skull with 80% correctness indicate that it does exists.

The review of genetic evidence of human development over the last 50K years with different evolutionary pressures in different regions lead to conclusion that there are five races that developed in process of several divisions of population:
• First division separated Africans from the group who moved out of Africa to Europe
• The Second division separated Europeans from East Asians
• The next two separations were linked with population of two remote continents America and Australia which were reached relatively soon after exit from Africa about 46K years ago, but then where separated giving space to development of this group into separate races Australian Aborigines and American Indians.
Finally the races when they connected via landmass usually have a connection areas populated by individuals produced by continuing mixes of close by racial groups.

This chapter is a bit more detailed technical review of genetic variance by race. It provides a nice Venn diagram showing distribution of about 400 genetic clusters with high level of variation developed by evolutionary pressures in 3 major different races: African, Asian, and Europeans. Interestingly, these 400 clusters are different for different races with only relatively small overlaps. Every group has about 120-140 clusters that were under selection exclusively for this group.

This follows by review of genetic mixes and how such mixes depend on separate portions of genome inherited from father or mother with different racial components. The second part of chapter dedicated to review of arguments against existence of human races and reasons to reject these arguments. The most important argument is that variation between individuals is higher the average variation between races. The response if that while it is correct, nevertheless the variation between races is significant enough to treat races as different entities.

This chapter explores possibility of interconnection between genetic differences and cultural outcomes between different societies. As example development of religion reviewed with inference that it must be genetic predisposal for religion views in all human genomes since various religions were developed in all known human societies. Then human history reviewed with special consideration for impact on human genome of different evolutionary pressures created by transitions from hunter-gatherer to agriculture in both forms: settled and pastoral with different parameters for aggression, cooperation, and submission being most advantageous in different societies leading to diversity of races.

This chapter reviews changes that occurred in human natures due to changing environment. The most important changes were decrease in propensity for violence and increase in literacy. As result individuals with beneficial traits obtain higher level of income leaving more children and pushing out from genetic pool early dying violent and ineffective people. In short in more recent societies being eaten by tiger was substituted by being poor and not able to feed ones children. The “long arc of domestication” is reviewed in details for various societies. At the end hypothesis of correlation between hereditary intelligence, as measured by IQ, and achieved level of wealth. There are plenty of correlations, but no causation was ever proved. The final section dedicated to review of institutions of different nation and their impact on prosperity or lack thereof.

It seems to be impossible to talk about genetic intelligence, IQ, and wealth without bringing in Jews, their achievements, and history. This chapter is doing just that in process stressing evolutionary pressure on Jews’ intelligence due to requirements to accommodate to hostile environment in which Jewish history occurred and nature of professions open to Jews in Europe.

This chapter brings an interesting and unusual angle to the question why Europe prospered, while other parts of the world did not. Example used of telescope, which in Europe caused dramatic changes in understanding Astronomy, world, and seagoing navigation, but, while demoed to Chinese and Muslims, generated no real interest. The point is made that European openness and acceptance of change and innovation has genetic component because all other conceivable explanations of differences seems to be failing. A special attention allocated to Jared Diamond’s ideas of Geographical determination and thesis that “societies are different due to different geo conditions not due to the different genetics of people.

The conventional denial of genetic differences between races is implausible because of:
• Precise mix of genetics is not possible to identify and surmise that genetic component of 0 is not realistic
• All-culture position formulated as ideological position directed against racism. Ideology, even a decent one, does not provide for a scientific explanation of anything
• All-culture also fails to explain difficulties encountered in attempts to change cultures of third world in order to bring them into age of prosperity
• Supporters of all-culture failed to maintain this position by including newest research in genetics and culture.

This book attempts to include genetic component into analysis of differences between people with history viewed not as purely cultural development, but rather as combination of evolutionary genetic development with cultural evolution.

The important part of understanding is that while individuals of all races are very similar, the societies they created are very different and part of this difference could be explained by genetic evolution of part of genome that controls social behavior and eventually lead to specifics of society created.


I am fully agreeing with position that genetics of different races justify existence of this notion of race. However I do not agree that this difference is important and that social behavior of people defined by genes is strong enough to provide significant impact on characteristics of society.

The most important part of my disagreement is not with this book, but with whole tendency to assign to groups characteristics that are specific to individuals. For example the statistical distribution of IQ while moved to the right for Jews up to 110 points average IQ does not make any particular Jew any smarter then he/she is, but culture of learning and great encouragement of intellectual achievement, which is undeniably cultural phenomenon, makes every Jew try his/her best to be smart and educated or at least look as such. The resulted overachievement is more of the product of this culture then genetics.

Another consideration that make me think that genetic component while exist and pretty strong, is not that important, are ease with which people with the same genetic background accept superior culture if given chance either at individual level as immigrants from third world to the first world or even as societies as exemplified by Korea (South and North) and Germany (West and East).

My final reason for why genetics is not that relevant, is that in contemporary world people are intermixing at huge rate and with increasing speed so the fact that one’s grandparents include representatives of 4 different races is much more important then the fact that they all carry evolutionary differences developed over previous 50K years.

20140719 The DIM Hypothesis.

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The main idea of this book is that Western civilization produced 5 and only 5 philosophical frameworks or modes which define condition of society at any given moment and dynamics of its development.

These modes are:
D – Philosophy of Disintegration based on Kant’s ideas, which comes in two forms:
D1 (Knowing Skeptics): Unity through natural world grasped in unrelated chunks
D2 (Kant): Unity is impossible, both percepts and concepts are detached from reality
I – Philosophy of Integration based on Aristotle ideas: Unity through natural world grasped through concepts derived from percepts
M – Philosophy of Misintegration based on Plato’s ideas, which also comes in two forms:
M1 (Worldly Supernaturalists): Unity through transcended world, but natural world is real and concepts must be applicable to percepts.
M2 (Plato): Unity through transcended world grasped by concepts independent of percepts.

These definitions allow analyzing Western history as process of modal progression with change in mode defining all areas of culture including art, science, and politics. Contemporary United States is currently representing mix of multiple modes with author expecting one mode M2 in form of religious totalitarianism to become dominant with the exclusion of all other modes.

There is a small chance to avoid it due to combination of current expansion of Objectivism as pure philosophical representation of I (Integration) mode and predisposition of American culture to I mode as it was expressed in Enlightenment and ideas of country’s founding fathers; but this chance is as small as probability of 300 Spartans stopping Persian army (which did really happened).


1. Integration

The Western civilization became different from all others when Greek philosopher Thales came up with idea of new method of thinking – integration. Now we seems to be observe process of switching from this method to method of disintegration that threatens destruction of Western civilization. The DIM theory is an attempt to analyze current processes and provide prognosis of future development.

The process of integration per philosophy of Objectivism contains integration from perception to concepts as integration of percepts; then from concepts to generalizations, then from generalizations to principles and finally to integrated unity of knowledge.

Integration could be valid that is based on perceptions of real world as in science and invalid, that is unrelated to perceptions of the real world. The only alternative to these two methods is non-integration when part of the whole product brought in randomly like in abstract art. Examples of all three are: Galileo vs. Nostradamus vs. Pollock

2.The Three Archetypes
The three archetypes of integration represented by three philosophers and their ides:
• Plato: Everything is integrated and combined in the one Supreme Being not related to natural world and not accessible to sensual perception. His metaphysics is supernaturalism meaning that reality is non-natural phenomenon. His epistemology is rationalism meaning that concepts are primary and independent from percepts. This is invalid integration.

• Aristotle: Reality is Nature and there is nothing else. There is no matter without form and no form without matter. His epistemology is derived from perceptual reality: human percepts create concepts in the mind and concepts are aggregated into reason. This is valid integration

• Kant: Logic and causality are baseless; they cannot be derived neither from percepts nor validated by reason. Everything comes from 12 innately existing mind concepts. Reality does not exist, but rather just a product of human mind and is generated from preset concepts. Since reality does not exist there is no absolute truth and everything is whatever humans want it to be. This is not integration, but disintegration.

All three philosophies are internally consistent and logical, even if writings of all three authors include quite a few contradictions.

3.The Two Mixtures
Philosophies of Plato and Kant spawn two additional mixtures:
• Worldly Supernaturalism. This is concept of duality of real (supernatural) and unknowable god and worldly nature knowable via empiric research and scientific method. This was direction of ideas developed by Descartes, Spinoza, and Stoics. This mixture represents mutation of rationalism.

• Knowing Skepticism is the mixture that represents mutation of empiricism under influence of Kant. It accepts that the reality is unknowable, but allows knowledge of specific limited facts making universe into stream of human experiences. Comte and John Stuart Mill father developed these ideas. Interesting outgrowth of this came in area of ethics where it produced Comte’s religion of humanity and Bentham’s Utilitarianism.

4.DIM and the Hypothesis
D – Disintegration
Kant: Unity is impossible, both percepts and concepts are detached from reality.
D2 – Many without One
Knowing Skeptics: Unity through natural world grasped in unrelated chunks
D1 – Ones in the Many

I – Integration
Aristotle: Unity through natural world grasped through concepts derived from percepts
One in the Many

M – Misintegration
Plato: Unity through transcended world grasped by concepts independent of percepts.
M2- One without the Many
Worldly Supernaturalists: Unity through transcended world, but natural world is real and concepts must be applicable to percepts.
M1: Many from the One

DIM Hypothesis contains to related theses:
1. Western philosophy produced 5 products defined by their mode of integration, which describe totality of all alternatives.
2. Western Culture historically went through several changes of these modes with these changes occurring not by chance, but in accordance with logic of mode progression. Understanding of this logic provides for ability of rational prediction of future development of the West

Part two is review and analysis of modern history of changing mode expressions in 4 areas of culture:

5. Literature
Classicism: Various versions of M1 mode – Worldly Supernaturalism.
Romanticism: I mode – One in the Many, Aristotle’s mode
Naturalism: D1 mode Ones in The Many
Modernism: D2 mode Many without a One
Socialist Realism: M2 mode One without the Many

6. Physics
Newton: This is variation of integration mode. One is real, but only as One in the Many (I).

Positivism: Representative Erich Mach. This is Comte’s epistemological approach-reality exists and is knowable, but only as a bunch of percepts somewhat interconnected, but not integrated: Ones in the Many (D1)

Einstein: This one accepts reality of the world, but puts first mathematical ideas and esthetics of equations to explain it and use percepts only to confirm correctness of concepts. The mode is the Many from the One (M1)

Quantum Mechanics: This is juxtaposition of percepts, equations, and probabilities. The mode is the Many without a One (D2)

String Theory: In this approach the physical world is not exactly real, but derived from conceptual realm of mathematics. From unified Theory of Everything or One flows unreal and non-perceptual Many (M2)

7. Education
Classical Education: based on studying ancient texts and logic of ancient languages. It was however based on religious doctrine with Many (school goals, curriculum, and methods derived from supernatural One = M1 mode)

Progressivism: it was rejection of raw accumulation of texts and facts with downgrading the very notion of knowledge and move to perceptual level exercises and processes. It was mode of Many without One D2.

Pluralism (In Schools): This is D1 mode – Ones in the Many with multiple instances of percepts and concepts presented chaotically with consistent rejection of integration as impossibility.

Totalitarian Education: This form of education is fully designed to indoctrinate individuals into whatever ideology rules a given totalitarian society. It has always a few unalienable characteristics: It is always collectivist, it has always clearly defined enemy either bourgeois class, or Jews, or whatever. Observed facts had to be subverted to comply with a priory concept of ruling ideology. It is M2 mode– One without many.

I Approach: There are no clear examples of I approach in contemporary educational systems. Author only provides a speculation based on his experience as processor. The crux of the matter should be integration of high level philosophical concepts with lower level concepts derived from clearly identified percepts. It should also include extensive horizontal integration between various areas of knowledge. It should be One in Many mode – I.

8. Politics.
Absolute Monarchy: In this form it is Many from One mode when king is the One. M1 mode.

Capitalism: This form of society is integration of Many individuals interacting through market into One prosperous society where everybody is trying to make living by doing something that other people need: I mode.

Pluralism (In Government): This is form of contemporary western societies when basic principles disconnected from reality of everyday concerns and actions. It is D1 mode where Many interspersed by unconnected Ones.

Totalitarianism: This form popular in the middle of XX century is deifying collective and diminish individuals all the way to annihilation. It is One without Many – M2 mode.

Egalitarianism: This form was never really implemented and will never be implemented because its promoters always exclude themselves insisting on being more equal then others. It is more of a method of obtaining electoral support in democratic society for bureaucratic machinery of state. Ideologically it is Many without One – D2 mode.

This part is a pretty detailed review of pre-modern cultures from point of view of DIM hypothesis assigning specific mode sequences to different areas of these cultures. So here are the assignments:

9. Greece: Literature – mode I; Science – I; Education – I; and Politics – I.
It is quite interesting that author assigns the best and fully objectivist mode to all areas of Greek culture, but does not concentrate on reasons why this breakthrough eventually did not held. There is mention of incomplete development of ideas and institutions and small scale and populations of Greek societies that prevented them from making their I-mode dominant in following Western societies.

10. Rome: Literature-M1 mode; Physics-M2; Education-M1; and Politics-M1

11. The Middle Ages: Literature – M2 mode; Science – M2; Education – M2; and Politics – M2.

Overall it seems that Western civilization got it right starting with Greeks who were mainly I mode culture then went to M1 mode in Rome, and then to M2 in Middle Ages. However contemporary cultures are jumping all over the place between all 5 modes everywhere with probable exception of education, which somehow never got a proper I-mode established. Could it be that it is source of our many troubles?

12.Identifying a Culture’s Essence

Philosophy and Cultural Products: Philosophy that dominates society is not obvious on foreground for all to see. It is rather in background nearly invisible, defining thoughts and actions of individuals representing intellectual forces of society. Even if these individuals not clearly formulate or even understand philosophy they adhere to, they insert it in all cultural products that they generate. Author believes that he proves important generalization: Cultural Works are transmitters to a society of philosophical fundamentals.

Some Problems of Non-DIM Analysis: Non-DIM analysis does not provide a standard for analysis of cultural product. DIM does it by selecting product’s structural features, essential characteristics, and relationships between them without which it could not be considered whole.

The Two Philosophical Issues Underlying Mode: Metaphysical issue is the status of this world. Epistemological Issue is the status of concepts. The first one defines what to integrate and the second defines how to integrate.

13.The West’s Modal Progression
The mode is a way of thinking and it lasts for a long period of time until some triggering event makes people to conclude that this mode is not working any more and they change to another mode of thinking considered more effective in achieving their goals. Author believes that DIM allows evaluate the status of current mode based on relevant events that may or may not undermine or strengthen current mode and available alternative modes that are represented in minds of population and, as result, produce not only valid explanation of previous mode changes, but also prediction of future change.

West modal progression went through 2 phases for each mode: one ancient and another contemporary. So here they are:
I (Integrations)- Ancient Greece and Enlightenment of XVIII century;
M1 (Misintegration of Worldly Supernaturalists) – Ancient Rome and Renaissance and Age of Reason of XVII century;
M2 (Platonic Misintegration of the One)- Middle Ages and Contemporary Totalitarians Marxism and Nazism with the One being Führer;

Author sees the M modes as dominant with I and D modes just as temporary interruptions. However even during these interruptions M is always in background waiting to show up as response to whatever crisis to occur.

Here is Mode change algorithm:
1. Instability of mixed mode
2. Inability of establishment to defend its mode due to philosophical deficiency
3. Modal rebellion by intellectuals
4. Modal rebellion by the public
5. Knowledge of acceptable alternative mode
6. Triggers

14.Secular Modes in the United States Today
Secular modes are those that at minimum deny exclusive reality of supernatural: D1, D2, M1, and I. Currently there are multiple modes in play in the USA with D1 mainly being philosophy of educated (soft BA) elite. Based on number of college graduates about 15 mil or 5% of population. D2 is much smaller not more the 1-2 mil, but it includes elite of art, science, education, and politics, making it disproportionally influential. I mode supporters are unusually strong in America as evidenced by consistent split between American common-sense public (I) and intellectuals (D). However at the same time population continuously moving away from I mode accepting more and more growth in government. At this point author finds it impossible to define strength and potential of American subconscious adherence to I mode and predict either it will wither away over time or suddenly explode to the surface moving country as whole to tradition of founding fathers. M1 mode of significant part of population combines reality of supernatural with reality of natural world as represented by adherence of many Americans to both science and religion. It is philosophy of established traditional churches and it seems to be on its way out.

15. The Anti-Secular Rebellion
Author expects rebellion against contemporary D mode of elite and even M1 mode of philosophically peaceful coexistence between supernatural and natural. He believes that Christianity as M2 mode is on the raise being supported by significant forces in middle bureaucracy, military, and business. He also considers it a possibility of merge between Christianity and Environmentalism resulting in very robust M2 movement.

16. What’s Next?
In the best traditions of American doom and gloom future author believes that M2 is unstoppable and will result in totalitarian religious regime based on Christianity with property rights retained more as cultural tradition, than actual individual control over resources, pretty much as it was in Nazi Germany. It would also include high level of nationalism and external aggression. The time frame for all this is defined as next 50 years.

This prognosis is not presented as inevitable, but rather as high probability outcome. However there are some trends that could prevent such theocracy – small, but growing objectivist movement among intellectuals. Interestingly enough he finds a solace in the story of 300 Spartans who stopped huge Persian army in the battle of Thermopylae preventing annihilation of Western civilization in its cradle.


It is a very interesting philosophical interpretation of the history of Western civilization and prognosis of its future development, but in my opinion it is way too limited to be correct. The problem is that humans are not really philosophical creatures who think and act consistently with philosophical concepts they consciously or unconsciously developed in their minds. Humans are self-directing creatures who act mainly with the purpose to survive in a given environment and pass on to the next generation genes that were instrumental in their survival. As such creatures, humans develop conceptions about environment, their place in it, and actions they need and want to conduct on multiple levels with two main objectives: individual survival and group survival. Even at this level of simplification the two objectives they have are often contradictory when group’s survival may require individual sacrifices and vice versa. The point is I do not believe that humans could conceivably have non-contradictory, logically consistent philosophy and act on it. Moreover in addition to philosophical contradictions within one human head at one point of time there are many more contradictions between different incarnations of owner of this head over time. Just try a simple mental experiment: pick up an issue and try to imagine discussion between yourself as you are now and yourself-10 years, yourself-20 years, and so on. Now multiply it by about 300,000,000 times and you’ll get nearly infinite variation of philosophical views and concepts about reality or lack thereof at the same time in one society. In short humanity is way too complicated to predict its future development based on philosophical concepts simplified to 5 modes.

This brings me to the reason why I think that prediction of future theocratic totalitarism in America is way off the mark. The culture of this country combines tremendous practicality of people who were formed both genetically and culturally by their immigrant ancestors who carried in their minds ability to be comfortable with purely I mode approach to environment at the level of direct interaction with this environment and multiple variations and combinations of all modes in their minds at the level not related to such interactions. The second (ideological) level is mainly used to support group cohesiveness and pretty much nothing else, so it is not really important. What is important is American tolerance to this ideological level diversity formed by necessity to cooperate with neighbor who has different genetic, cultural, religious, and you name it background. This combination make it highly probable that Americans turn away from current trend of big government due to its inefficiency and impracticality and will do it within relatively short period of time because tolerance prevents big government from shutting down dissent. In my opinion all this makes theocratic totalitarian future unrealistic, but libertarian future with “I” mode dominant at the practical level and usual mess of all 5 modes at philosophical level will continue as usual with currently prominent collectivistic intelligentsia being destroyed by failure to produce promised governmental paradise.

20140712 Anatomy of the State

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The State power is power of banditry and robbery, which is supported by ideology and bribery and depends on these methods for its maintenance. It is in constant struggle with Social power of productive people who generate all resources available to humans. This struggle usually ends with victory of the state, at least until robbery suppresses Social power to such extent that States fall either to external conquest or to revolution. So far no method was identified to permanently remove or at least limit evils of the state.


1. What the State Is Not
The State is often regarded as social services organization, which it is not. It is also often characterized as “WE” that is completely incorrect because quite often especially in totalitarian regimes of XX century government killed quite a few citizens either Jews in Nazi Germany or Kulaks in Soviet Russia. If government is “WE”, then these people who where a part of “WE” committed suicide, which they did not.

2. What the State Is
The State is organization of political means that is means of violent transfer of resources from one group of individuals to another. In other words it is systematization of predatory process on given territory.

3. How the State Preserves Itself
The State maintains itself by combination of violence, bribery, and ideology. Correspondingly there is army and police to inflict violence, there are intellectuals who develop and promote ideology to support state in some combination of religion, philosophy, and culture, and there is also a part of population that benefits from wealth transfer to them from other people.

4. How the State Transcends Its Limits
The people continuously try to impose limits on the state, but even if they succeed from time to time like in America with its constitution and Bill of Rights, eventually State always breach through these limits and expand. This chapter documents how it happened in America in XX century.

5. What the State Fears
The State is always under the threat of two potential killers: external conquest and/or internal revolution. The reason often cited for state existence is defense of population. However any analysis of any state shows that much higher priority is defense of the state itself.

6. How States Relate to One Another
This chapter analyzes different ways of competition between states, mainly as military competition in Europe demonstrating historic process of substitution of states competition as fight between gangs with fight between populations. During the phase of States being just gangs the winners just get ability to rob population that mainly indifferent to which specific gang robs them. The more advanced State is characterized by success of ideology that makes population self-identify with the state allowing the state completely take over control of all aspects of population’s live. This advancement greatly increases efficiency of robbery at the same time making out of victims of robbery its supporters at least for a time being.

7. History as a Race Between State Power and Social Power
This essay started with statement that there are only two ways to humans to obtain resources: by work exercising power over nature and converting its product to their own use; and by robbery exercising power over other people and taking their resources for robber’s use. The former method is Social power and the later method is State power. The history of humanity is a continuing struggle between powers with State power mainly succeeding in removing any limitations that representatives of Social power able to put in place from time to time.


This is one of very few texts that I am completely and fully agree with. The only addition that I want to make is that it seems to be missing full understanding that the state is not thinking and acting entity, but just a hierarchical group of individuals capable to suppress other individuals in a given society to such extent that they do not resist to being robbed. I believe that the way out of this conundrum is to establish real and clear benefit for each individual from participating in voluntary exchange and cooperation system (free market), and demonstrate to them as clear as possible how individuals directly and/or indirectly included into hierarchy of state benefit at his/her expense. The establishment of unalienable, equal, and marketable right on natural resources could achieve this objective relegating coercive organization of state to minimal supporting role in society.

20140705 Capital in XXI Century

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This book contains a few simple ideas illustrated by significant amount of graphs and contemplations that all ends with on big and fearless recommendation.

The simple ideas are:
• Inequality of private wealth is very bad for society and could lead to cataclysm.
• This inequality is huge and constantly growing because there is the “first law of capitalism: return on capital if growing faster then rate of economic growth.”
• The mechanism of inequality growth includes inheritance, that is playing bigger and bigger role in the level of capital available to individuals, and unequal returns on labor when top earners make disproportionally higher compensation then regular people.
• However despite all these elements of ugly capitalism there is no real alternative to maintain viable economy without necessary evil of private property and unequal returns.

The suggestions therefore are limited and do not included such decisive measures, actually implemented by Marxists of the past, as complete confiscation of private property and physical elimination of capitalists and high earners. It is just mild global tax of 80% with objective not to raise revenues, but rather limit inequalities and assure stability of society.


Part One: Income and Capital

1. Income and Output
It starts with the story of bloodily suppressed strike of South African miners with statement that cause was not that much low pay of miners, as extremely high pay to top managers. From this point author rejects idea of market provided division of income between labor, capital, and management as being optimal without any attempt to provide some logic why it is not, and presents a question of how it should be divided in ideal society.

Then it goes to contemplate a pretty obvious fact that split between labor and capital is not stable and tend to change over long period of time with capital getting higher share in peaceful time while labor getting higher share as result of wars, revolutions, and massive government intervention into economy.

A number of economic definitions follow with very important for this book caveat that capital is defined as the same as wealth and excludes human capital, which brings us back to XIX century Marxist understanding of economy. Also everything “national” is defined as “national”=”public”+ “private” whether it is income or wealth or whatever.

The final statement defined as fundamental law of capitalism is that national income = capital * rate of return on capital or a=b*r.

After that there is a historic review of development of national accounts and changes in distribution of population and production by continents over last 3 centuries starting with Asia decline and raise of Europe in 17xx and Europe decline and raise of Asia in 20xx. There is an interesting statement at the end about inequality of global income distribution in relation to output.

Then comes review of idea of convergence with inference that an optimistic idea of growing convergence of rich and poor areas is not fully realistic because it assumes free movement of capital and labor which could not be a case with poor countries alternating between periods of confiscation of foreign capital and protecting private property.

Finally the chapter ends with very interesting statement for guy who excluded human capital from his analysis: the conversion occurs and continues to be possible most of all via knowledge transfer from rich countries to poor.

2. Growth: Illusions and Realities
The main point here is expectation of low growth for foreseeable future. This includes both population growth and economic growth. The review of demographic growth and its trends comes up with conclusion that it will stop or even turn negative everywhere except Africa. From point of view of equality, the demographic growth is considered as positive because it divides wealth of rich between many children. After this author moves to economic growth demonstrating that it was huge in western world with industrialization. Author provides trivial, if somewhat unusual insight that purchasing power grew in such highly diverse way for different goods and services, with many new goods and services created, that any attempt to compare current and past are deeply flowed.

After analyzing demographic growth, author moves to the main point: slowed growth would lead to major social change by increasing value of inheritance and diminishing opportunities for self-starters. There are a few graphs with various projections all of them showing a slow growth. At the end of chapter author goes into discussion of monetary issues tracing money from stability of gold standard of XIX century to fiat money and correspondent inflation of XX century. The note about disappearance of specific money sums cited in fiction literature used as prove of inflation is somewhat touching.
Part Two: The Dynamics of the Capital/Income Ratio

3. The Metamorphoses of Capital
This chapter is about change in capital structure overtime from mainly land + residential to mainly residential + other. Interestingly enough, author does not go into details of what is this “other”. Quite a bit of space dedicated to foreign capital investment with inference that it did not play such a significant role in development of western countries. It follows by review of relationship between public and private debt and capital in Britain and France. The interesting side effect of government taking over money supply in XX century was annihilation of rentier – the guy who financed public debt with his savings. At the end author makes a point that despite change in capital structure its total amount in relation to income did not change.

4. From Old Europe to the New World
At first author provides similar analysis of capital change for Germany and then goes to changes of capital/income ratio history for Western Europe, which decreased from about 7/1 to 3/1 during WWI to WWII and came back only after return to peace in 1950 achieving ratio 5/1 to 6/1 by now. Nothing like this happened in America, however he is going back to XIX century to find big drop in capital/income ratio for America after civil war when slaves stop being counted as capital stock.

5. The Capital/Income Ratio over the Long Run
This chapter continues capital/income ratio analysis over long run of 150 years. Interesting point is that ratio of public capital remains approximately the same while ratio of private capital going up and down. After that the second law of capitalism stated as: ” Capital/Income = Savings rate / Growth rate. There is a bunch of qualifiers for this law that make it not really applicable in many cases. Author reviews relationship between private and public capital with overall inference that public capital is staying at the same level, while private capital is growing as ratio of capital/income in all developed countries. At the end of chapter author predicts that with rate of growth going down from 3% to 1.5%, savings rate assumed to be constant at 10%, the ratio capital/income will grow to 7/1 by the end of XXI century.

6. The Capital-Labor Split in the Twenty-First Century
This is analysis of relations between labor and capital in production. The main points are:
• Split of returns is changing to benefit capital because return is the same, but ratio of capital/income is growing
• Returns on capital increases for big corporations due to economy of scale
• Counter trend is decrease of marginal return on capital if there is more capital then could be used productively.
• The split also changes for capital because elasticity is more then one – additional capital could substitute labor to the extent defined by technology.
• The value of human capital should be discounted because material capital still remains there.
The most important lesson author believes he provided is that there is no natural force decreasing capital’s importance and flow of income it provides.
Part Three: The Structure of inequality

7. Inequality and Concentration: Preliminary Bearings
This chapter is about distribution at individual level and its inequality. Author divides it into inequality in income from labor, inequality from returns on capital, and interaction between those two.
It starts with reference to classic French literature of XIX century to pose the question: What is the best way to obtain wealth in a given society: Labor or Inheritance. The obvious answer in France XIX century is inheritance (Vautrin’s lesson). After brief reference to decrease in value of inheritance during period of wars and revolutions in the first half of XX century the author goes back to statement that inheritance again becoming superior to labor.
Author is trying to make case that capital is more unequally distributed than labor. To support this idea distribution tables are provided that show top 10% of labor providers get 25%-45% of all returns while top 10% of capital owners get 50%-90% of all returns on capital. The interesting note in relation to progress is what author calls “Patrimonial Middle Class” – people who own capital, but also get income from labor. For some reason he calls it “A Major Innovation” even if it is no innovation for America where farmers mainly owned their own land since the beginning of the country.

8. Two Worlds
This chapter is a comparison of dynamics of inequality in France and USA over XX century. The France went from society of rentiers to society of managers and capitalists. The top income obtained moved from rentiers who derived income from rent on capital invested in government securities to individuals selling high-end labor (managers) or investing in business enterprises. It also went down dramatically from top 10% receiving 45% of income to something around 30% and staying at the same level as result of wars and strength of socialist movement in this country. Similar path was taken by USA when New Deal cut share of top income, but in 1980s USA moved back to a little bit more of capitalism resulting in inequality going back to levels of early XX century. Author also reviews significant change in source of top income that become much more salary related and also obtained not only by men, but also by their spouses practically doubling return on highly marketable abilities. Interestingly enough according to graphs in this chapter income from returns on capital is breaking even with income from labor only at the 99.9 percentile level in USA.

9. Inequality of Labor Income
In this chapter author concentrates specifically on income from labor and its inequality. The point he makes is that income from labor, even very high quality labor, did not grow that much but for the very top individuals in control of big companies who basically write their own checks. He identifies it as mainly Anglo-Saxon phenomenon where share of top 1% grew up dramatically more then in Europe or Japan. Author specifically rejects theory of unlimited growth of marginal productivity due to technology as explanation of this growth. He quite reasonably suggests that there is no way to define marginal contribution of top manager to corporation’s profit, so the only reasonable explanation of this growth is political power of top manger within corporation.

10. Inequality of Capital Ownership
Here it is turn of Capital ownership to be analyzed as source of income. Author goes through history of capital ownership in France and USA with specific attention to appearance of middle class with significant capital ownership. Overall the top 10% in France went down from 90% of all capital to 60% during wars and revolutions and then slightly rose at the end of century to about 65%. USA the dynamic was much milder from 80% down to 65% and then up to 75%. The reason for this author sees in the fact that rate of return on capital exceeds rate of economic growth constantly increasing share of capital in overall income distribution. The attempt to explain this discrepancy seems to come down to analysis of dynamic change of rates. Author adds to this a reference to time preference in savings that gives advantage to owners of capital because they can reinvest higher share of returns. This follows by quasi-historical analysis based on literature and legal arrangements for inheritances. At the end of chapter author analyses reason why inequality did not return so far to the levels of XIX century and expresses fear that it will achieve or even exceed this level in XXI century

11. Merit and Inheritance in the Long Run
This chapter is about dynamics of wealth acquisition: inheritance vs. labor. Author believes that increase of rate of return on capital over growth rate inevitably leads to increase in role of inheritance. However provided graphs show that even if share of inherited wealth grew over late XX century as percentage of national income it is still way lower then it was at the beginning of this century. Moreover living standards of top 1% rich by birth are undistinguished from the living standards of top 1% of self-made people.

12. Global Inequality of Wealth in the Twenty-First Century
This starts with analysis of inequality of returns on capital stating that there is significant economy of scale based on investment size. This results in continuing growth in wealth size of top 400 richest people and correspondingly in their share of global wealth. From there author switches to global distribution of wealth. He finds an interesting statistical anomaly that if calculate total wealth by country and summarize it, the result will be the negative financial position of the world where both rich and poor countries have a negative position. Another interesting point made in this chapter is about moral hierarchy of wealth with entrepreneurial wealth being at the top and generally considered a positive phenomenon. Author believes that it does not justify inequality and consider it as a sample of Euro-centric approach. Somehow he is trying to support this attitude by referring to dirty wealth obtained by oligarchs of third world countries and references to fiction describing criminal creation of wealth. Finally significant attention is paid to rise of China, India, and sovereign funds of oil producing countries. In addition to billionaires these owners of capital may try to own the world meaning to extract rent income from everybody else, especially western people. Amazingly he shows some common sense in this respect by coming to conclusion that it would probably not going to happen without political push back.

Part Four: Regulating Capital in the Twenty-First Century

13. A Social State for the Twenty-First Century
This chapter starts with author expressing believe that global tax on wealth is needed to avoid “inequality spiral” and regain control over wealth accumulation. This is based on believe in supremacy of “general interest” over “private interest”. After that he reviews recession of 2008, expressing hope that it facilitates “return to the state” followed quite convincing remonstration that the state never really go away and grew nearly exponentially until 1980s. There is interesting discussion about contradictory understanding of rights between USA and France. USA rights are about “pursuit of happiness” and freedom from oppression, while France it extends to social equality meaning that “ social distinction can be based only on common utility”. This follows by call to modernize contemporary social state (welfare state) with specific review of education and retirement financing functions with inference that they are pretty much too complicated to reform. There is also a short review of social safety net in poor countries.

14. Rethinking the Progressive Income Tax
This is review of various taxes with detailed analysis of history progressive taxes in France and USA. The case is made for oversized executive salaries being result of tax arrangements, specifically dramatic decrease in marginal tax rates in 1980s. Author considers this development dangerous for society moving it from democracy to oligarchy and proposes 80% tax on high income. He seems to be understands that it would not generate that much revenues, but believes that it is necessary for the sake of society.

15. A Global Tax on Capital
This chapter discusses a global tax on capital. Author seems to understand that it is impossible, but he likes to dream. He does not see global tax as source of revenue, but rather as method of regulation of capitalism. He expands his tax all the way down to middle class just to make sure that everybody get robbed, even if just a little bit. I guess it is just a reminder to people not to get rich. There is quite a bit of technicalities of how to tax, how insure transparency, and so on, but it is beyond the point. The point is that author sees the world as global polity and believes that some equalizing power should control this polity and redistribute wealth the way author sees fit not only from rich to poor, but also from rich countries to poor countries. He also sees immigration as another form of wealth redistribution only instead of wealth it is people who are moving.

16. The Question of the Public Debt
The last chapter is dedicated mainly to discussion of public debt and ways to eliminate it through increase in taxes and inflation. Also in this charter author provided an interesting discussion on Euro and European unification. The Euro being not under control of any specific government seems to provide a relatively stable money supply by limiting governments ability for counterfeiting. However it does not help when one government wants to increase money supply to liquidate debt, while another government in the same monetary union has significant number of this debt holders who do not really want to see their money disappear.

Here author formulates what he sees as central contradiction of capitalism: return on capital is growing faster than rate of economic growth, which leads to the growth inequality between owner of capital and provider of labor. It becomes more and more dangerous for stability of society, especially because owners of capital even if it created by entrepreneurial labor tend to turn into parasitic rentiers completely separated from people who live by labor and see diminishing returns on their effort. Contrary to previous Marxist thinkers he is not calling for revolution or looking forward for day when immoral and unequal capitalist society will be destroyed, but is rather scared that it could happen. The global tax for him is something needed to avoid upheaval with all its cruelties, blood, and totalitarianism that could come from such upheaval.


Majority of reviewers of this bestselling book point out problems in author’s economic analysis and I think in many instances they are correct. However I see it as an honest attempt to prevent over-boiling of envy that proved to be able to destroy wellbeing of millions for long periods of time.

The problem is that author completely missing another source of envy that is caused by much more dramatic inequality between individual in control of “public wealth” and individuals who are in control of only their own wealth. For example if some capitalist is rich enough to fly a small plane to Hawaii at cost of $20,000 while regular person had to fly economy class at cost $200, it is awful, but if high level “public servant” uses 2 huge wide body planes and hundreds of people for weekend golf outing on Hawaii at cost $20,000,000 it is just fine according to author because it is in “public interest” to pamper “public servant”. Somehow consumption ratio of 100/1 seems to author awfully unequal if based on private property, while consumption ratio of 100,000/1 seems to be just fine as long as high-end consumer uses “public wealth” for his consumption. The history shows that this “public” wealth control inequality arrangement is as dangerous as private wealth inequality and could lead to similar cataclysm.

Another problem is not with analysis, but with suggestion of high global property tax remedy. It remains unclear what makes author think that high earners who really deserve extremely high returns will continue to apply effort to produce at the top of their ability. I think it is save to assume that these people are not idiots, so if there is some ceiling of what they can make, they would apply some ceiling on what they produce. Again, history shows that red banner of top producer (big reward in Soviet Union) does not really provide incentive for best effort.

My own suggestion to resolve issue of inequality is to establish equal, unalienable, and marketable property rights on natural resources so individual who use more then average would buy rights to use these resources from individuals who use less then average.

As for the inequality of returns division between employees of profitable private corporations, I agree that it is often result of ability of individuals in control of corporation to write their own checks. However the solution should not be robbery of their property via tax, but rather legislative limitation their ability to write checks to themselves and assignment of this ability to individual shareholders, obviously in proportion to share of corporation owned. If combined with legal requirement to distribute 100% of profit to individual owners even if it is required to go through multiple layers of mutual funds this measure could have significant positive impact on economic growth because it would reward really good producers of wealth rather then really good business office politicians who managed to get control over other people wealth.

20140628 The Storytelling Animal

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The main idea is that humans evolutionally developed into story creating and story telling creatures. Everything is the story: our past, present, future, dreams, and plans. These stories are necessary for humans in order to comprehend reality in their minds, even if only partially, and help to develop strategy and implement actions necessary to survive. The story capability therefore has a great evolutionary meaning and is necessary for humans. This capability served well for last few hundred thousands of years, but leads now to somewhat new direction of escaping away from reality into virtual world.


1. The Witchery of Story
This is about phenomenon of a written story that has power to bring reader into non-existing imaginary environment created by the author. The story exists not only in written book; it is also TV, DVD, Computer game, and any other environment. Moreover, the most popular stories are in our brain – daydreaming, the condition we spend a significant time of our lives in. It also includes an interesting observation of TV sports which is more and more packaged as a story, rather then just a competition. The point is that the story telling has an evolutionary significance because all known people tell stories.

2. The Riddle of Fiction
This chapter starts with children being a natural story telling and story listening entities. After that the narrative goes through the story telling and use of non-verbal expressions with hands, faces, and everything else. Finally the question posted what is a story for? Is it enhancing sexual selection, or just training tool, or an effective method of information packaging? Another opinion is that it is for nothing. The story telling is just a side effect of our brain with no discernable evolutionary benefit. Author contention is that it has important evolutionary benefits, but they are too wide and heterogeneous for simple explanation.

This chapter also includes analysis of stories created by children on simple prompt from the teacher. Most stories include something terrifying indicating that story telling could be a tool to prepare to deal with dangers of the real world.

Finally this chapter includes narrative about Vivian Paley’s book based on her teaching experience. It is about sexual difference with unwilling acceptance of fact that boys are boys and girls are girls and, most important, it is genetic and there is nothing feminism can do with it. Correspondingly the stories they create and live in are different: boys’ stories and girls’ stories.

3. Hell Is Story-Friendly
This is the story of kidnapping vs. non-story of everyday trip to grocery store. In the storytelling the idea of hyperrealism is non-starter, because nobody wants it. The master formula: Story= Character + Predicament + Attempted Extrication. Overall this is about universality of the story and use of story as training tool. It also includes discussion about mirror neurons as a biological tool to support use of a story. The experiments such as with flight simulator proved that simulated training works. So the idea of story telling as simulation of reality does make sense.

4. Night Story
This is about dreams as a story, Freud and his psychoanalysis. RAT – Random Activation Theory – sleep is basically batch jobs of the brain and dreams are just a side effect. Research related to atonia – sleep paralysis shows that if atonia switched off in cats they seems to be playing a problem resolution versions closer to hell than to reality. The same applies to humans. Dreams are more often nightmares than not.

5. The Mind Is a Storyteller
This is about brain being a storyteller. Normally the story helps to manage reality, but in mental cases like schizophrenia it distorts reality so much that person become dysfunctional. Interesting info – 87% of great poets had mental disorders.
The chapter also includes description of Gazzaniga’s experiments with individuals with split brain. Then it provides example of story building from nothing from Sherlock Holmes to Kuleshov effect. It also included discussion of confabulators – individuals living inside invented story without realizing it. Example of conspiracy theorists is provided.

6. The Moral of the Story
This chapter starts with discussion of a religion as a story. It is quite possible that human brain needs explanatory story to function in the real world. Another function discussed is function of sacred stories and moral stories to condition individuals for specific behavior. This is deeply connected to children’s play – training for the real life.

7. Ink People Change the World
This chapter is about the writers and their ideas making deep impact on the world through the stories they tell. It starts with intellectual story of Hitler who was greatly impacted by Wagner’s opera Rienzi.

8. Life Stories
This is about our life stories being partially real and partially fiction. There is plenty of scientific research confirming that what we remember is not exactly what happen, moreover the memory is malleable and could be intentionally changed or planted. One very interesting inference comes out of this discussion: “ The Past like Future does not really exists”. All is just a bunch of stories. From here the discussion is going through self-image that is always complimentary and well-known effect when everybody is above average.

9. The Future of Story
The result of all these stories of the book is a statement that “Humans are creatures of Neverland”. That is the place where all our stories happen and where we spent most of our life. The new technology, TV, computers, and games make our story more and more sophisticated every year. It even become possible to exit real world and spend live inside some computer game.


I am pretty much in agreement with ideas of this book. Humans are storytelling animals living in Neverland. They are at the risk of moving completely out of this world into virtual world. Economically it becomes feasible and maybe even probable because of high level of automation and productivity providing enough food, shelter, and entertainment for mass exodus of individuals not capable to handle real world into virtual world.

However I think that quite a few of capable individuals will prefer boring and difficult real world to virtual world of computer-based fantasy. Moreover I even think that after a while the vast majority of people would learn to enjoy reality more then fantasy because of reality, well, actually being real and therefore capable to give enjoyment unobtainable in Neverland.


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The main idea of this book is to provide relatively concise, but complete presentation of philosophy of Objectivism as it was expressed by founder Ayn Rand not only in her writings, but also in her conversations within the small group of followers.

The key points of this philosophy are:
• The Philosophy is not just important, but it is indispensible part of human existence, so every human being has it. The difference between Objectivist and everybody else is that Objectivist is not only conscious about his philosophy, but has it built on as strong basis as mathematical theory with clearly defined axioms and logically non-contradictory inferences from these axioms
• Objective Reality exists independently from any form of consciousness and is the primary to anything else.
• Objectivism accept consciousness as non-material faculty inseparable from human beings
• Existence is linked to Identity and could not be without it.
• Human beings exist for their own sake and their lives have no other meaning. From here follows morality of individualism combined with individual freedom both economic and personal and rejection of use of force except for self-defense.
• Correspondingly the only acceptable form of society for Objectivist is capitalism with government limited to protection of individual rights especially property rights because these rights are under sustained attack from forces of collectivism.

Finally the point is made that history of civilization is history of philosophical duel between Plato and Aristotle representing ideas of consciousness being primary vs. material and objective reality being primary.


Chapter 1- REALITY
Philosophy is not an abstract knowledge that is possible to go without. Philosophy is the human need that is always satisfied by whatever set of believes a specific human being has. The only real choice is whether this philosophy is true or false in relation to reality, whether it is consistent or contradictory. Objectivism as any other philosophy based on axioms and this chapter reviews these axioms.

Existence, Consciousness, and Identify as the Basic Axioms
The first one: Existence exists.
The second: Humans have faculty of consciousness that equal to perceiving existence.
The third and final axiom: to be means to be something, to possess identity.

After establishing axioms, the text proceeds to demonstrate that denial of axioms is necessarily logically inconsistent.

Causality as a Corollary of Identity
Here text reviews process of human acquisition of understanding of axioms during process of maturity of a child with development of understanding of cause and effect law. Corollary is self-evident implication of established knowledge so according to this postulate, causality comes as corollary of identity.

Existence as Possessing Primacy over Consciousness
Objectivism infers from axioms primacy of Existence over Consciousness, while majority of other philosophies define primacy of Consciousness over Existence.

The Metaphysically Given as Absolute
The meaning of this is that there is no possible or imaginable alternative to the fact of reality. Metaphysically given = exists without human action or influence, such as universe. This notion is opposed to human created facts and realities that also exist, but are not absolute.

Idealism and Materialism as Rejection of Basic Axioms
That Idealism contradicts presented Axioms is self-evident, however it is discussed in details due to popularity of notion of omnipotent God. Objectivism is nicely defined here as a-theism, a-devilism, a-demonism, a-gremlinism, and a-anything-conscious-ism.
More interesting is discussion against materialism. Here Objectivism accuses materialism in denial of reality of Consciousness because it is byproduct of material brain. At the same time it is stated that Consciousness could not be separated from matter. It does not make a lot of sense to me, but I guess it is just an attempt to separate Objectivism from primitive materialism at the most basic level possible.

This chapter is about objectivism’s Epistemology – science of what rules to follow to obtain real knowledge of reality that exists independently of consciousness.

The Senses as Necessarily Valid
The validity of senses comes from the fact that they necessarily caused by existing objects.

Sensory Qualities as Real
Objectivism rejects postulation of sensory quality as choice between “in the object” and “in the mind” approach. Its position: complex combination of both.

Consciousness as Possessing Identity
Objectivism’s approach: Identity is precondition of Consciousness.

A Perceptual Level as Given
Perceptual level is Epistemological primary, but not a Metaphysical primary. It is given and is a foundation of conceptual level.

The Primary Choice as the Choice to Focus or Not
Man is a volitional being who functions freely. However he can use available intellectual ability fully, only if he puts focus on the issue. So the real choice is what to focus on.

Human Actions, Mental and Physical as Both Caused and Free
Free will versus determinism does not make sense because every action defined by complex combination of previous physical condition of all parts and human selection of one particular course of action out of multiple available courses.

Volition as Axiomatic
Volition is the starting point of conceptual cognition and therefore could only be self-evident = axiomatic.

The concept is human ability to build generic representation of the world from specific perceptual input of the senses. For objectivism it is what differentiate humans from animals.

Differentiation and Integration as the Means to a Unit-Perspective
This is discussion of human ability to regard entities as units and then use analysis and synthesis or differentiation and integration as tools to build useful models of reality.

Concept-Formation as a Mathematical Process
This is discussion of use of measurement and mathematics as human developed tools to dramatically improve validity of concepts and their relation to reality.

Concepts of Consciousness as Involving Measurement- Omission
Here the text is going into review of complexity of concepts and correspondingly notion of hierarchy of concepts. The building of higher-level concepts requires consciousness and act of abstraction: measurement-omission that involves two aspects: content and intensity.

Definition as the Final Step In Concept Formation
As such definition is contextual and evolving concept of entity with includes or excludes some parameters as needed for use of this concept. The analog provided is concept as file with related data and definition is as label on this file.

Concepts as Devices to Achieve Unit-Economy
This is discussion of concept as a tool that allow humans to operate in infinitely diverse world by picking up concept identifying features and use previously developed template of how to deal with this concept.

Objectivism defines Epistemology as practical tool necessary to conceptualize reality

Concepts as Objective
This is about integrating concretes into concept, which is possible for 4 categories: perceptual concretes, scientific discoveries, man-made objects, and complex human relationships. The difficult part is to define level of conceptualization so to avoid duplicates or too much of unnecessary specifics.

Objectivity as Volitional Adherence to Reality by the Method of Logic
Objectivism defines knowledge as the grasp of the object through an active reality-based process chosen by the subject. The chosen process should be logical, defined as non-contradictory identification. There is a nice example of logical and non-contradictory statement that is useless because it is not based on reality: “ Apples are razors and oranges are blades, therefore we can shave with fruit salad”

Knowledge as Contextual
Concepts are relational form of knowledge; therefore knowledge is meaningful only in specific context. Action based on statements of knowledge without context does not correlate with reality and often bound to fail.

Knowledge as Hierarchical
This is discussion about hierarchical structure of knowledge and necessity of moving up through integration and down through reduction in hierarchy as required to discover proves of this knowledge. Interesting concept of Ayn Rand’s razor is provided: “State your primaries”. In other words, what is taken as axiom at the beginning of logical construction, may define final result.

Intrinsicism and Subjectivism as the Two Forms of Rejecting Objectivity
Historically 3 theories of concepts: Platonic realism (non-material forms like goodness), Aristotelian realism (form + matter), and nominalism (every existent is unique). All of these reject objectivity. Per Rand: “Objectivity is achieved using logic, including context and hierarchy of knowledge” applied to perceptual data.

Chapter 5 – REASON
Objectivism based on Reason: facility that identifies and integrates material provided by senses.

Emotions as a Product of Ideas
This is Objectivist’s definition of emotions being states of consciousness, with bodily accompaniments and spiritual / intellectual causes. Per Ayn Rand emotions are redundant because they are just consequences generated by reason’s conclusions.

Reason as Man’s Only Means of Knowledge
Reason is faculty of awareness and volition directing human actions. There is no alternative to reason as means of knowledge.

The Arbitrary as Neither True Nor False
Arbitrary claim is claim that has no evidence either perceptual or conceptual to support it. As such it cannot be proved or disproved.

Certainty as Contextual
This discussion is about reason’s ability to lead to certainty. It is somewhat directed against skeptics who believe that doubt is a permanent state because no knowledge can be absolute. Objectivist response is that knowledge is valid in context and doubt is just a temporary state when switching from known to unknown context.

Mysticism and Skepticism as Denials of Reason
In objectivism knowledge is just a grasp of reality achieved using reason. Both mysticism and skepticism deny possibility to achieve knowledge of reality and therefore deny validity and ability of reason.

Chapter 6 – MAN
According to Objectivism a philosophical view of man rests on metaphysics and epistemology, but is not exhausted by them.

Living Organisms as Goal-Directed and Conditional
The main characteristics of living organisms, including man is that its actions are self-directed and goal-oriented.

Reason as Man’s Basic Means of Survival
Objectivism view is that mind and body is an integrated system with reason being the main tool of survival. There are plenty of real live confirmation of this from primitive tribes surviving by their knowledge and skills applied to environment they live in to highest achievement of technology when vast majority of people obtain everything necessary for live without ever doing any direct manual job.

Reason as an Attribute of the Individual
For Objectivism there is such thing as collective reason as there is no such thing as collective mind or collective brain. There are agreements achieved between individuals about coordinated actions, but they are never primary. Nothing is ever created by collective; it is always individuals who create new ideas, concepts, and act upon them. What is called a collective achievement is always just a combination of individual inputs that are always greatly different from microscopic simple action to the great innovation.
On the subject of nature of man Objectivism denies alternative of “nature versus nurture” as false choice, presenting man as an integrated entity with facility of reason.

Chapter 7 – THE GOOD
Objectivist position in regard to values: The ultimate value is life. The primary virtue is rationality. The proper beneficiary is oneself.

“Life” as the Essential Root of “Value”
The only alternative to life is death and that creates context for value-oriented action. The life as ultimate value is the end in itself that set a standard by which all other goals are evaluated.

Man’s Life as the Standard of Moral Value
The human life is continuous whole containing all time lived to the point and all projections for the future. The meaning is everything that required for survival of man as rational being. It does not mean survival at any price, but rather specifically as “rational being” with morality being: “everything supporting such survival is good, everything preventing it is bad”.

Rationality as Primary Virtue
Rationality leads to primary values of life: Reason – Purpose – Self-Esteem.

The Individual as the Proper Beneficiary of His Own Moral Action
This is discussion of value of egoism with reasons for objectivism’s promotion of rational-self interest. The rational self-interest could include practically infinite types of action including risking life for others in some very limited circumstances.

Values as Objective
For Objectivism values, like concepts, are not intrinsic or subjective, but objective. That means it exists independently, but in relation to a man and should not be invented, but discovered.

Chapter 8 – VIRTUE
Objectivism derives additional values from the key virtue of rationality: independence, integrity, honesty, justice, productiveness, and pride.

Independence as a Primary Orientation to Reality, Not to Other Men
Existential independence means supporting oneself in rational field of endeavor by using first-hand approach. Here objectivism divides people into rational creators and dependent non-creators. The first ones create everything valuable and the second type of people at the best supply creators with labor necessary to implement their ideas, or use force to pry results from creators for their own use. The real life interdependency is resolved via market. When buying bread from baker one pays money and therefore is not dependent on baker.

Integrity as Loyalty to Rational Principles
Integrity defined as “loyalty in action to one’s convictions”. Objectivism does not allow lots of wiggle space in question of integrity. One either has it or not. Metaphor is provided of mafia killer who kills on order, but in principle value human life and is true to his principle in 99% of encounters with other people.

Honesty as the Rejection of Unreality
“Honesty” is defined as refusal to fake reality. Especially important is Intellectual honesty because without it to act properly and consistent with reality is not possible.

Justice as Rationality In the Evaluation of Men
Justice is the virtue of judging men’s character and conduct objectively and of acting accordingly. From here discussion goes to problem of non-judgment (it is immoral), to mercy, forgiveness, personal change over time, and such. Interesting point is made on Egalitarianism, which is considered to be a complete repudiation of justice.

Productiveness as the Adjustment of Nature to Man
“Productiveness” is process of creation of goods and services necessary for human life. The productive man is moral man. Correspondingly all other activities like leisure and recreation are subordinate to productive activities.

Pride as Moral Ambitiousness
“Pride” is commitment to achieve one’s own moral perfection. It is discussed in relation to productiveness as in providing the best goods and services for internal satisfaction “self-esteem”.

The Initiation of Physical Force as Evil
The final discussion in this chapter is not about virtue, but rather about vice. This vice is Initiation of Physical force. Important is that vice is not just use of force itself, but initiation of force.

Chapter 9 – HAPPINESS
Objectivist defines happiness, as the good man’s experience of life, achievement of which is the only moral purpose.

Virtue as Practical
“Practical here means achieving desired result. This is a discussion of objectivist principle of harmony between moral and practical. It is also rejection of dichotomy between practical and moral.

Happiness as the Normal Condition of Man
Objectivist view is that Happiness is a state of non-contradictory joy from achieving what is real without guilt or penalty. Moreover it is normal condition of man because universe is “benevolent” meaning has no intentionality toward man therefore if man successful in dealing with reality the happiness is achieved.

Sex as Metaphysical
This is discussion of sex as celebration of existence that should carry no guilt and should be considered a physical capacity in the service of spiritual need.

Chapter 10 – GOVERNMENT
This chapter reviews politics as a normative branch of philosophy defining the principles of a proper social system and government actions.

Individual Rights as Absolutes
Objectivism holds that the basic principle of politics is Individual rights. The fundamental is right to life with major derivatives being right to liberty and right to property. There is also interdependence of the rights: Individual freedom could not exist without political freedom, and political freedom cannot exist without economic freedom: free minds and free markets are corollaries. The Objectivist notion of rights has meaning of rights of Individual to act and be free from adverse action of other directed at individual. It absolutely excludes notion of rights as demand on other people to provide something to individuals. There are only individual rights, the notion of collective rights absolutely repulsive to Objectivism.

Government as an Agency to Protect Rights
Objectivism defines government as an agency that has exclusive power to use force on a given territory. Since without government the self-defense is the only way of protection everybody would be consumed by it with no time left for productive work. However as most powerful violent organization government should be under strict control and the only way to achieve it is to have democratically elected government of laws, not people.

Statism as the Politics of Unreason
Objectivism differentiates statism from proper government. The proper government exists to protect individual rights, while statism suppresses them. This difference is discussed in the view of dispute between old left and the new left. Old left saw statism as apex of human development when wise government scientifically manages economy, individual lives, and everything else. This vision failed after being implemented in Soviet Union in the form of International Socialism and in Germany in the form of National Socialism. New Left came up after this failure with idea of mixed economy when they agreed to allow some economic freedom, but as little as possible.
An interesting discussion about Liberal and Conservatives as subjectivists relying on mind-body dichotomy in their philosophy with liberals limiting economic freedom, but expanding personal freedom, while conservatives limiting personal freedom, but expanding economic freedom. Ayn Rand noted that each camp wants to control what they consider most important: for conservatives it is human mind and liberals human body (economics).
Interestingly enough both camps true to their philosophy only as long as they are out of power. As soon as they get power liberals happily suppress personal freedoms, while conservatives not less happily suppress economic freedom.

Chapter 11 – CAPITALISM
This chapter provides philosophical analysis of capitalism.

Capitalism as the Only Moral Social System
Capitalism is the only known system that recognizes all human rights: life, freedom, and property and therefore it is the only moral system for Objectivists. It does not need justification as more effective and efficient system then any other. This is given by just about everybody left, right, and in-between. Objectivist justification for capitalism is different because it is done on the philosophical and moral basis.

Capitalism as the System of Objectivity
Capitalism does not accept notion of public good achieved at the expense of individual because “public” always consists of individuals and therefore it always means sacrificing one individual for the benefit of other. Very important discussion is provided to repudiate notion of economic power as something of the same type as political power in the tradition of FDR’s “economic royalists”.

Opposition to Capitalism as Dependent on Bad Epistemology
The main idea of this part is that the decline of the capitalist society when it occur happens because people fail to develop proper philosophical approach to problems of their life and as result fall victim to all kind of political manipulation which typically results in dramatic decrease of quality of life for majority with correspondingly dramatic increase in power and wealth of politicians who exploit this philosophical defenselessness.

Chapter 12 – ART
This chapter relates to Objectivist esthetics view of the art as the last branch of philosophy making it a complete philosophical system in addition to view of the universe (metaphysics), view of the knowledge (epistemology), view of value (ethics), and view of society organization (politics and economics).

The chapter discusses the following issues:
• Art as a Concretization of Metaphysics
• Romantic Literature as Illustrating the Role of Philosophy In Art
• Esthetic Value as Objective

The Duel Between Plato and Aristotle
The epilogue is about philosophy as the main engine of human history when ideas developed by a few individuals find place in the minds of intellectuals who propagate them through art and education throughout the whole of population until they become a force defining actions of majority of people.

In view of this approach the history is looked at as duel between two set of ideas: one generated by Plato that defined consciousness and primary force, and another one by Aristotle that defined objective existence independent of consciousness as primary. Ayn Rand’s Objectivism is contemporary restatement and expansion of Aristotle and Kant is correspondingly contemporary restatement of Plato.

The final thought is that Objectivism is an American philosophy and being country without precedent America may eventually embrace it creating prosperity much greater the ever before.


Philosophically my views are close to Objectivism more then to any other philosophy that I know about and I agree with about 80% of ideas presented in this book. However there are some areas that I am not agree:

• Non-material character of consciousness – as far as I know consciousness is nothing more then result of electric activities in human brain based on network of neurons that are constantly changing their electric parameters as a consequence of these activities. There is a huge history of medical research and natural experiments confirming this view.

• Another problem I have is with constant paeans to rationality and reason. Objectivism seems to assume that it is always obvious what is rational and reasonable and what is not. I do not believe that it is correct. I do not believe that it is that simple. Reasonability is not obvious, but is rather subject to test. Here it goes to philosophy of science and I am big time adherent to Karl Popper’s falsification idea. Anything reasonable is so only if theory based on it has clearly stated a falsification criterion that was not falsified.

• Despite being individualist myself, I cannot fully accept Objectivist ideas of unabridged individualism. We humans are social animals and therefore our evolution works at the two separate levels: level of individual organism and level of the group individual organism belongs to. In order to survive human had to have two things: good enough body to survive whatever challenges presented by environment from bacteria to tigers; and belong to strong enough group that is capable to overcome whatever challenges presented by other group competing for resources. This thing – human survival stands on two pillars and would fall if any of them undercut.

• I agree that capitalism is the best of what we had come up with so far, even if it never ever been used in its ideal form without severe government intervention. However it carries within itself a destructive feature of perceived unfairness of property allocation that from time to time leads to explosion that is usually followed by move to some form of socialism with significant deterioration of quality of live at the best and significant loss of lives at worst. I believe that it could be corrected by implementing equal and marketable rights for natural resources, which would give everybody really unalienable property by removing persistent quest of propertyless to confiscate property from those who have “too much” of it.

In short if I would have to put label on myself, it would be label of “objectivism” rather then anything else. However since I do not have to be labeled, I would not call myself so.

20140614 Penguin and Leviathan

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Main Idea:

The main idea is that current economic and political system built as combination of market economy based on self-interest (which is BAD) and government coercion (which is not very good, but at least not based on self-interest). This structure should be substituted by selfless cooperation because it is natural for humans – idea promoted originally by Rousseau and Kropotkin. The way to raise Penguin (selfless cooperative society) is to apply contemporary psychological research to modification of human behavior through number of “levers”:
• Communications;
• Framing, Fit, and Authenticity;
• Looking beyond ourselves:
• Empathy and Solidarity;
• Constructing Moral Systems: Fairness, Morality, and Social Norms;
• Reward and Punishment;
• Reputation, Transparency, and Reciprocity;
• Building for Diversity.


CHAPTER 1: The Penguin vs. the Leviathan
This is all about contest between Penguin that represent human empathy and cooperation and Leviathan, which contrary to it usual designator for government (per Hobbs), here represents selfish interest. Actually Leviathan here is paired with Invisible Hand of Adam Smith: both are promoters of selfishness, while Penguin is all about empathy and cooperation with roots in writing of Rousseau, Kropotkin, and Hume’s moral sentiments.

Cycles of Leviathan and Invisible hand
Here history is viewed as cyclical process when big government takes turns with Invincible Hand of market in domination of society with less then satisfactory results. Author sees an alternative in cooperation without compensation as it occurred in multiple Internet based development such as open software code, Wikipedia, and such. The motivation comes from common sense of purpose.

Why has myth of self-interest persisted?
Author’s answer:
1. It is Partially truth, but mostly idea of self-interest is wrong.
2. History – selfishness is just a very old idea.
3. Simplicity – simple people love simple explanations to complex world.
4. Habit – people are socialized into believe in selfishness and competition.
However author knows the way out – we just need to overcome incorrect assumption of self-interest and move to the better world of selfless cooperation that we all striving to achieve.

Why now?
Because we are in the middle of great disruption in all areas of live: business, ideology, technology, and everything else. Especially important is Internet that produces successful examples of “social production” when people do great things without being paid.

CHAPTER 2: Nature vs. Culture: The Evolution of Human Cooperation
Author presents “Nature” side of polemic as Social Darwinism with strong surviving at expense of the weak. This follows by presentation of E.Q. Wilson’s Sociobiology as neo social Darwinism in contest with “Culture” side presented by ideas of Franz Boas, Steven Gould, and Richard Lewontin.

What is the “Selfish Gene”?
This is reasonably correct presentation of ideas of Richard Dawkins with “Selfish gene” being not equated with selfish person. In short- cooperation makes evolutionary sense.

Drowning siblings: Reciprocity
This piece is about cooperation via reciprocity on many levels including even cooperation between different species. Example provided badger and coyote cooperation in hut on squirrels.

A Letter from Ben Franklin: Paying It Forward.
This is about Cooperation via reciprocity extended in time. It is also a bit about decline and contemporary revival of group selection ideas.

Soldiers and Voters: Cooperation and Coevolution.
Group selection related work of Rob Boyd and Pete Richerson describes two modes of group selection: cooperation as in group of soldiers with cultural adaptation to the group and coevolution as in a group of voters acting to elect group leaders even at high expense if compared to the level of influence on outcome of election. In both cases it is genes that have significant influence on behavior, but culture is as powerful, so it seems to be wash overall.

CHAPTER 3: Stubborn Children, New York City Doormen, and Why Obesity Is Contagious: Psychological and Social Influences on Cooperation
Here straw man of selfish economy raises his head. This time to be rejected by nuanced psychological and social models. The models reviewed here are related to motivational structure starting with Maslow’s ideas.

We see the World through the Frame
This piece is about situational framing. Nice example of framing with use of Wall Street vs. Community designation of group in the game.

Social Capital, Reputation, and Social Contagion
This one is about accumulation of information about person that allows getting better returns in encounters with other people. Nice example of doorman in New York –job obtainable only via social network of doormen. However social network could also be somewhat dangerous for individual if adaptation requires some risky and/or unhealthy moves. Example – obesity that seems to be having much higher probability if it is common in individual’s social network.

CHAPTER 4: I/You, Us/Them: Empathy and Group Identity in Human Cooperation
This discussion is about empathy and recent discovery of mirror neurons that provide necessary hardware in the brain. One interesting thing that not often mentioned is that it is quite different from “group solidarity”.

Stand by me: Solidarity and Social Identity in Cooperation.
This is description of experiments demonstrating that solidarity alone is enough to sustain cooperation in public goods game. On the dark side of solidarity is separation of people into in-group and out-group with out-group being outside of empathy. Some interesting dynamic of change between others and ours during American political election process when others during primary become ours after party candidate is defined.

Praying on Street Corners
This is discussion about community policing movement as example of solidarity.

CHAPTER 5: Why Don’t We Sit Down and Talk About It?
Typically people believe that talk is cheap, but this is discussion about value of talk as a way to set up rules for cooperation and resolve issues that prevent it. As example discussion about elections article in Wikipedia is provided. An interesting link provided for MEETUP.com where people cooperate in all conceivable areas.

Motorcycles and Mediators
Here is example of creative net based on Chine motorcycle industry. It includes a bit more details on mediation as a tool to support cooperation.

Cooperation and Framing
Parameters of successful cooperation: Empathy, Solidarity, Moral Norms, Fairness, and Trust and Leadership; all depend on communication. Examples of shared interest and reciprocated services based on Internet are provided.

CHAPTER 6: Equal Halves: Fairness in Cooperation
These issues are reviewed based on experiments with Ultimatum game. Conclusion: the equal share works best.

Fairness of Outcome and Intentions
This is discussion about fairness meaning different things to different people at different times. Examples are provided from California mining codes to anthropological research with different results for ultimatum game in different cultures. The interesting thing – Western democratic culture people prefer equal division and reject unequal breakdown even if they benefit more.

Lotteries, draft, and lines
Research seems to demonstrate that people care more about fairness of process then of outcome.

Defining Fair Play
Research reviewed of wages comparison as defined by market based versus flat structure. Surprising result was that performance dependent more on company consistency in applying announced method rather then method itself. Most important result of research: fairness is an independent motivational factor.

CHAPTER 7: What’s Right Is Right–or at Least Normal: Morals and Norms in Cooperation
This chapter is about cultural norm and standards. It starts with cultural rejection of a tip in Europe and then follow through discussion of “order without law” when individuals act according to group standards rather then according to formal law.

Music downloads: The power of combining fairness with conformity
This is example of music download site with voluntary payments.

Spanish Farmers and Lobster gangs: (un) Tragedy of Commons
This is a description of research of real commons that contrary to economic thought did not fail, but seems to be working just fine. Author seems to expect commons to prosper in XXI century and property rights kind of withering away.

Wikipedia’s Neutral Point of view
This is discussion about how to establish workable norm for community, based on author’s experience with Wikipedia. Here is an important result: the cooperation is highest when rules self-developed by community. Interestingly enough right after that author goes into discussion of successful internalization of norm imposed from above based on New York ban on smoking.

Moral Commitments and Principled Action
This is a discussion of role of Morality in human actions as usual for this author in contrast to action in self-interest.

CHAPTER 8: For Love or Money: Rewards, Punishments, and Motivation
The chapter starts with description of Carr-Benkler wager, which web site would attract more people: one where contributors pay or the voluntary contribution site. Author believes that he won, but so is Carr. This follows by discussion about intrinsic versus monetary compensation.

Putting a Price on Blood
Author compares British healthcare with American trying to prove that British system is better based on quality of blood supply. The point is made that voluntary donations provide better quality and quantity of blood. Eventually USA also stopped paying for blood with results being more blood donations. The main point here is that material compensation could crowd out voluntary donations.

Software developers, University professors, and Overpaid executives
The point here is made that we cannot go around without market so we need both intrinsic and extrinsic type of motivation working in tandem.

“Free as in “Speech”, not as in “Beer”
This is discussion of phenomenon of open source software development and its complex patterns of motivation and compensation. The second theme is executive compensation that despite exponential growth seems to be failed to deliver proportional growth in returns for shareholders.

The Punishment Puzzle
The other side of reward – punishment is discussed in the same vein of superiority of intrinsic punishment. Example with Israel kindergarten reviewed when fine resulted in increased violations.

At the end of chapter a very reasonable inference provided: both intrinsic and extrinsic motivation should be included for system to work in the best way. Another reasonable point is made that motivational system could and should be included within framework of market.

CHAPTER 9: The Business of Cooperation
The chapter starts with review of two business cases: failed due to incompatibility of cultures GM-Toyota plant in California, and success of unusual business practice with high level of employee autonomy of Southwest airlines.

What Toyota Got Right
The idea expressed that Toyota on its plants provided high levels of autonomy, while GM was highly controlling. Success comes from treating people as at least somewhat independent entities who are trustworthy and trusting at the same time.

Why Open Source Works
The short answer is because it combines free software with payable services built around it, providing necessary cash flow for both development and support.

The Sounds of Music
Similar story for music downloads and records industry attempts to cope with it.

Changing the Face of Politics
This is about political impact of social networks and advantage of left over right during Obama election in 2008. Review of 155 political blogs at the time demonstrated that left wing sites provided more freedom for authors while right wing were significantly more controlling.

CHAPTER 10: How to Raise a Penguin
This means society of individuals who cooperate selflessly and generously to common good. Somehow author sees cooperation as contradiction to both the Invisible hand of market and Government coercion of Leviathan.

Designing for Cooperation
Here author stated the “Design Levers” of cooperation that he suggests to implement in order to “raise a penguin” (build a better society). These suggestions would lead to better human systems that should somehow substitute existing systems build on self-interest, suppression of bad actors, and low levels of trust.

My Take on It:

Nice recount of some contemporary social and psychological research, but way too much of wishful thinking and unrealistic ideas about human nature. Especially touching is designation of self-interest as “myth”. I would love to see rejection of this myth by author if his professor’s salary would be decreased by order of magnitude to janitor’s salary in the name of empathy and self-less cooperation. Somehow I think that myth of self-interest would quickly turn into undeniable reality.

Jokes aside, I think that all voluntary cooperation is based on self-interest of participants, as well as all coercive activities of Leviathan are based on self-interest of individuals in control of this creature. Actually as soon as self-interest viewed broadly as whatever individual believe is his/her self-interest at the moment, it becomes just impossible to imagine any other way of action for human being other then in self-interest. Even a monk starving himself to death for his religious believes acts in self-interest, as he understands it at the moment: raise his spirit closer to god by suppressing his lowly body.

From my point of view all this countering of self-interest against cooperation is just meaningless, and so are attempts to build cooperative society in denial of self-interest. What is meaningful is attempt to modify society in such way that individual were able to pursue their self-interest not at the expense of other people, but by helping other people pursue their self-interest. Actually we know such system – voluntary market exchange. The only thing that we need to make it work for everybody is to make sure that everybody has something valuable for exchange. Then nobody will be left in the cold, even if human nature stays the same and everybody’s self-interest remains intact.

20140607 What Government done to our Money

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Main Idea:

The main idea is that only commodity money such as gold could support robust economy. All other forms of money from bimetallism to paper fiat money undermine economy bringing inflation and other problems.


I. Introduction
This introduction is about the nature of money as government-controlled tool versus natural equivalent of goods and services used in free market without government intervention.

II. Money in a Free Society
1. The Value of Exchange: Money is unit of measure for exchange of incomparable goods and services differently valued by participants of exchange

2. Barter: This is direct exchange good or service A for B

3. Indirect Exchange: This is two-step exchange Good A for money M for good B

4. Benefits of Money: This is about money being medium of exchange – the most liquid commodity around.

5. The Monetary Unit: Since money is commodity, usually gold or silver is the natural type of money with unit of money being weight of commodity.

6. The Shape of Money: The shape is irrelevant, but coins are more uniformed and easier to count, but need some work so they are more valuable.

7. Private Coinage: This chapter is in support of private coinage. Actually intervention of government into coinage was the first step of taking control over money.

8. The “Proper” Supply of Money: This is discussion about what should be proper supply of money. The inference is that it should be defined by free market as everything else.

9. The Problem of “Hoarding”: Contrary to usual perception hoarding does no harm to economy. It is just maintenance of cash balances by individuals regulating available money supply.

10. Stabilize the Price Level? The stabilization of price level is making no sense in free market economy. Since money is just a medium of exchange their value in relation to other goods is bound to vacillate and there is no problem with it.

11. Coexisting Moneys: This part is about multiple types of money serving as medium of exchange. Again since money is just another commodity, this would cause no problems on the free market.

12. Money Warehouses This is discussion about simplification of commodity money when banks and their notes just represent gold in bank warehouse and provides for more convenient use of money.

13. Summary: The free market could run money supply as well as it runs supply of any other commodity.

III. Government Meddling With Money
1. The Revenue of Government: The government is basically a violent organization designed to transfer resources from producers to bureaucrats. The two main methods are taxation that being always quite obvious is unpopular and money counterfeiting: the case when government establishes control over money supply and tend to oversupply money creating inflation.

2. The Economic Effects of Inflation: This chapter is review of consequences of inflation, the most important being a distortion of business calculations that in case of hyperinflation could bring economy down.

3. Compulsory Monopoly of the Mint: This is a short review of historically initial step in government counterfeiting of money – control over the mint.

4. Debasement: The second step is debasing – progressive decrease of gold content of the coins

5. Gresham’s Law and Coinage: Simple formulation: the bad money pushes out good money from the market.
a. Bimetallism: The changing market ratio between 2 metals causes less valuable to push out more valuable.
b. Legal Tender: The definition of some forms of money either commodity money or just paper money that government enforcement of contracts will use

6. Summary: Government and Coinage: The government’s counterfeiting of money is limited as long as commodity money are used. The switch to fiat money frees government to inflate money infinitely.

7. Permitting Banks to Refuse Payment: The options of refuse payment in specie given to banks by government caused crises of 1819, 1837, and 1857 and provided for banks initiative to `encourage inflation.

8. Central Banking: Removing the Checks on Inflation: The monopoly on notes issue granted to central banks removes any limitation on inflation of these notes.

9. Central Banking: Directing the Inflation: The Central Bank controls inflation via demand to regular banks to maintain a specific reserves. This moves money supply away from economic area to political area since decisions of central bank are in hands of politicians.

10. Going Off the Gold Standard: This is description of steps that moved world economic system away from gold standard.

11. Fiat Money and the Gold Problem: Coexistence of gold and fiat money at the same time expose value loss and inflation very clearly making government to strive to remove gold out of circulation.

19. Fiat Money and Gresham’s Law: The Gresham law when gold is forbidden works through currency exchange so the more reliable currency is going into savings with less reliable circulating on the market.

13. Government and Money: Free, commodity based money make people nervous because nobody in control, so they demand government control of the money. The history demonstrates that it is wrong and in reality it is government that causes chaos in money supply leading to crises and inflation.

IV. The Monetary Breakdown of the West: This was written in mid 1970s when USA went into stagflation with drastic reduction in the value of paper money and dissolution of Bretton Woods’s system. It goes through history of government takeover of money supply

1. Phase I: The Classical Gold Standard, 1815-1914: Slightly idealized period of international gold standard as related to prosperity.

2. Phase II: World War I and After: The reason of moving away from gold is need to finance war that was beyond economic ability of governments causing them to use inflation.

3. Phase III: The Gold Exchange Standard (Britain and the United States) 1926-1931: The temporary system was establish when USA remained on real gold standard while Britain moved to pseudo gold standard with exchange allowed only with large scale gold transactions.

4. Phase IV: Fluctuating Fiat Currencies, 1931-1945: everybody inkling USA for going away from gold standard to fluctuating exchange of currencies. However it was limited so gold still was used and moved to US.

5. Phase V: Bretton Woods and the New Gold Exchange Standard (the United States) 1945-1968: The after WWII system was established when currencies were linked to dollar and dollar to gold.

6. Phase VI: The Unraveling of Bretton Woods, 1968-1971: Accumulation of dollars abroad eventually overcome amount of gold in USA leading to stress on Bretton Woods system

7. Phase VII: The End of Bretton Woods: Fluctuating Fiat Currencies, August-December 1971: The final period of Bretton Woods.

8. Phase VIII: The Smithsonian Agreement, December 1971-February 1973: The clearly doomed attempt to base currency exchange on rigid system of government pledges. Obviously, it could not possibly work.

9. Phase IX: Fluctuating Fiat Currencies, March 1973-?: This is current system of free exchange of fiat money.

Preface: The short review of the first part.
Case for the 100 Percent Gold Dollar: Rothbard states his disagreement with majority of supporters of gold standard who would like to go back to 1932. He would like to have completely 100% gold standard.

Money and Freedom: The money is basis of economy, therefore free economy could not exist if money controlled by government. The stricter such control, the less freedom economic system has.

The Dollar: Independent Name or Unit of Weight? : All money names originated from units of weight used in gold-based transactions.

The Decline from Weight to Name: Monopolizing the Mint: The decline from weight to name occurred as result of government intervention and debasement of money. The government coins weighting a lot less then pound of gold in weight had to be considered as pound because government said so and is capable to bring force to the table to assure acceptance of this statement.

The Decline from Weight to Name: Encouraging Bank Inflation 100 Percent Gold Banking: This is discussion of fractional reserves banking. The fractional banking means that money issued by bank is only fractionally convertible which is pretty close to cheating and, therefore should be prevented by government.

Objections to 100 Percent Gold:
1. Banks would not be able to make profit – Response: they just should charge for services
2. Inadequate money supply for growing economy – Response: money supply does not matter because monetary units automatically are adjusted to needs of the market. The stability of prices is not relevant.
3. Money value could not be fixed and should not be fixed. Use of commodity money would allow fixing money’s real unit of measure – weight.

Professor Yeager and 100 Percent Gold: The problems of deflation, national reserves, and exchange rates are caused by fractional-reserve banking. They would not exist if whole world were on 100% gold standard.

The 100 Percent Gold Traditions: The 100% gold standard is original American position ably supported by both Jeffersonians and Jacksonians.

The Road Ahead: This is just in case somebody listens: 6 steps program of establishing gold standard.

My Take on It

All things being equal I would agree that gold standard would be the best form of money. However things are not equal and not static. They are changing all the time so my first concern would be that unchanging money supply would be falling behind demand for money because of growth in economy and need in money to support this growth. In theory it does not matter that one’s labor today is worth $10/hour while yesterday it was $100/hours if one can buy with $10 today the same as with $100 yesterday. In practice it does matter because this number also represents evaluation that individual receives on the market and therefore has impact on psychological wellbeing. People hate to loose anything and this immaterial loss in number has real impact. This is only one of many reasons why maintain gold standard would be tough due to inevitable deflation if economy and population is growing while amount of money remains the same.

Even more important is fact that money is not exists outside of system of coercion necessary to maintain contracts, avoid cheating, stealing, and other economic malfunctions. It is not conceivable that people on controlling side of this coercion would easily give up control over money that allows them to access a lot more resources that they would be able to without such control.

Finally there is an inherent flow in any kind of commodity money including gold – new technological discoveries could dramatically change availability of any commodity sending economy in tailspin and chaos.

I think that the best way would be free fluctuation of all types of money people could come up with including gold, but with one significant caveat – an independently elected economic agency not part of other government organizations providing easily available money, probably in form of transaction records with limited amount of money units maintained at such level that inflation of this unit against wide range of constant goods would be minimal. It would be important that this set of goods was constant, unchangeable, and minimally improvable. Something like gallon of gas, KW/Hour of electrical energy, pound of food of specific type, pound of gold, and similar unchangeable things. With wide range of money / goods equivalents it would be possible not only control money supply overall, but also control it at the lower resolution level preventing inflation bubbles for specific goods whether tulips or housing.

20140531 The Great Stagnation

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Main Idea:

American society developed using low hanging fruits of industrial development and human capital which is not there any more, so it went into pretty deep crisis now being not able to meet usual requirements of population. The crisis was also aggravated by mistaken believe that society had more resources that it actually had, leading to overstress of financial system with consequent deep plunge into Great Recession. The salvation could potentially come from outside due to development of consumerist society in populous countries like Chine and India, creating higher demand for goods and services and support for continuing economic expansion. Another potential help could come from more effective marketization of technological achievements and increase of prestige of science leading to development of more human capital. The downside of new technologies may be its destructive capability in hands of future dictators.


Chapter 1 – The Low-Hanging Fruit We Ate
American society is in the crisis economically, financially, and psychologically. The reason for this crisis is that system as it is, was not designed to handle complex processes because it was formed and functioned during especially good condition of Low-Hanging Fruit available to it. The Low-Hanging Fruit consist of:
1. Free Land
2. Technological Breakthroughs
3. Smart, Uneducated Kids

Chapter 2 – Our New (Not So) Productive Economy
New and not very productive American economy is built on 3 major areas outside of normal market economy: Government, Healthcare, and Education. This chapter reviews all 3 areas demonstrating quite convincingly that dramatic growth in expenditures in all 3 areas produced very little, if any, improvement.

Chapter 3 – Does the Internet Change Everything?
The point of this chapter is that new technological breakthroughs like Internet did not have dramatic positive economic impact even if it created lots of valuable services that were unimaginable before.

Chapter 4 – The Government of Low-Hanging Fruit
The government provided goods and services that have the same dynamics of Low-Hanging Fruit as overall economy. These Low-Hanging Fruits where government intervention was both effective and efficient: Transportation, Industrial Production, Electronic Communications, and Scientific management had changed so much lately that they do not lend themselves to such use by government that it would be beneficial for population. The technological changes made government intervention harmful even when it is done in these areas.

Chapter 5 – Why Did We Have Such a Big Financial Crisis?
This chapter provides a charming answer to a very hot question and it is: WE THOUGHT WE WERE RICHER THEN WE ARE. This simple explanation goes like this: everybody expected 3% growth and made plans and build assets based on this assumptions, but when real growth was much smaller there were no money to pay for this, so economy crushed. The impact of these incorrect assumptions in financial area was growth of leverage ratio from 1:12 to 1:30 and higher. Obviously the mortgage industry collapse is another example.

Chapter 6 – Can We Fix Things?
This chapter is a review of favorable trends that could help overcome this crisis and unfavorable trends that should be handled. The favorable:
1. Interest to science and engineering in China and India combined with hope that they will become as consumerist society as US is.
2. Internet will generate more revenues eventually
3. Pressure from American electorate to move education to school choice and would cause dramatic improvement in human capital
4. Obvious for author idea: Raise social status of scientists. The example of Norman Borlaug provided as father of green revolution that nobody knows.

The potentially unfavorable listed is future technological development that could cause trouble in hands like Hitler’s in XX century.

My Take on It:

I do not agree with the whole concept of low-hanging fruits due to the simple fact that this fruit was hanging as low as it was in XIX and XX century for all previous history of humanity without any significant progress for a very long time. Much more important is organization of society and psychology of its members. These were the factors that moved Europe and America into industrial revolution creating consumerist society in the place of sustenance and robbery societies. The one most significant fact that led to it was temporary weakness of government that is forces of robbery due to process of switching from aristocratic robbery blessed by god(s) to bureaucratic robbery blessed by “forces of history” and “common good”. I believe that neither growth of consumerism around the globe nor raise in prestige of science would help to overcome this crisis. The only realistic way to do it is to find a way to dramatically decrease the scale of bureaucratic robbery and promote expansion of free markets based on Equal and Marketable rights to natural resources that would provide everybody with something to sell and therefore eliminate support for bureaucratic welfare state.

20140524 American history is not what they say.doc

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Main Idea:

The history as we know it, is not a real, more or less complete collection of facts with simple one-dimensional interpretation that bound to be close to reality, but rather complex ideological construct build on careful selection and/or omission of facts by ideologically conscious individuals in order to support and promote their ideology. The analysis of historical semi-fictional literature of American authors of XX century: Ken Roberts, John Dos Passos, and Gore Vidal confirm this idea. The similar confirmation could be found in works of professional historians: Charles Beard, Harry Barnes, and James Martin.
The overall direction of American history representation went over the last century pretty much from “America the noble and beautiful” selection of facts and interpretations to “America the ugly and imperialistic” selection and interpretation. This is plentifully demonstrated by review of literature about American wars.
This reinterpretation of history was aggressively applied in both entertainment and education and pretty much become a new paradigm of American history in education of young generation. However counter force of new understanding of history with notion of “America the beautiful despite all its warts especially if compared with everything else known to humanity” is growing leading to historical textbooks wars between interpretations by Howard Zinn, Eric Foner, Thomas Woods, and Michael Allen.
The main inference – objectivity is not really possible, so the quality of historical writing should be evaluated based on completeness of facts included and even-handedness of interpretations.


ONE: The Art of History
I. Objectivity in History
This chapter is pretty much about impossibility to achieve ideal of “objective history”. Since the main sources of history are written documents created by contemporaries they all and especially newspapers are not really reports of facts as they occur, but rather selectors and compilers of facts used to create a narrative to support preexisting ideological views of authors and their readers.

II. History and Fiction
This chapter is a review of historical narrative as growing out of fiction. It used to be that everybody including authors considered history as literature. An example is provided of Bancroft’s 10 volumes “History of United States”. The expression of this point of view is Roy Child’s definition: “ History is a selective recreation of past events according to historian’s premises regarding what is important…”

III. The Historical Fiction of Kenneth Roberts (1885-1957)
This chapter is a review of historical fiction by Roberts. His writings were about American Revolution, but from a very specific side – detailed and sympathetic narration of Benedict Arnold story. While not very popular as books, these writings made their way into public conscious via movies and seems played a role in swinging American attitudes towards Britain before WWII into Anglophile direction. This story used as illustration of intellectuals or “secondhand dealers in ideas” (Hayek’s definition) managing to change attitude of previously isolationist majority.

IV. The Historical Fiction of John Dos Passos (1896-1970)
This chapter is about another author of historic novels while not very popular, but influential among intellectuals. The road traveled: pacifism as reaction to WWI, isolationism before WWII, patriotism in WWII, and disappointment after WWII with fear of nuclear war eliminating civilization.

TWO: The Historical Fiction of Gore Vidal: The “American Chronicle” Novels
The part two dedicated to Gore Vidal and his representation of American history, which was nontrivial, but well documented.

I. Burr and Lincoln
Books discussed “Washington DC” (1967), “Burr” (1973),”Lincoln” (1984), Empire (1987), Hollywood (1990), and “Golden Age” (2000). Taken together it is kind of alternative history with Washington supporting strong government in order to defend Mount Vernon and Jefferson supporting state rights in order to get votes. In this alternative history founding fathers are petty, cowardly, violate laws as needed and so on. The same treatment applies to Lincoln.

II. 1876. Empire and Hollywood
This is description in Gore’s novel of period of Grant administration and elections of 1876 pretty much in the same spirit of disparaging traditional narrative. Then it going on through the end of XIX century and American attempts to build empire in Pacific

III Hollywood and The Golden Age
The same representation of American history continues throughout remaining books chronologically all the way until end of WWII at the end of which American imperialism started cold war against Soviet Union.

THREE: The Story of American Revisionism
The story of revisionism of American history includes not that much discovery of new historical facts as reinterpretation of well-known facts from the new and changing ideological positions. Part three of this book goes through a century of consequent reinterpretations of American history.

I. The Birth of American Revisionism and the Rise of Harry Elmer Barnes
This chapter describes the first reinterpretation of history as process driven by economy and technology. The main works are Beard’s “An Economic Interpretation of Constitution” and Barnes’ “History of Western Civilization”. Special attention assigned to revision of WWI history that was a key event for people of this generation.

II. Charles A. Beard and William Appleman Williams: From Progressivism to the New Left
This is about history of progressive anti-war revisionism with initially successful attempt to support isolationist movement in US that eventually failed after Pearl Harbor. The key works were Barnes’ “Perpetual war for Perpetual Peace” directed against Roosevelt’s international policies and Williams’ “The Tragedy of American Diplomacy”. It was a critic of American policy of “open doors” when USA actively tried to open doors of other countries for American goods and ideas. Despite this critic serious historians did not move too much to the left and maintained their distance from anti Vietnam movement.

III. Harry, Elmer Barnes and James J. Martin: From Progressivism to Libertarianism
This chapter adds another historian to the list: James Martin who considered himself not revisionist, but rather “additionist”, adding new knowledge to existing narrative. Martin’s work popularizes libertarianism and another promoter of such ideas – Tucker.

IV. James J. Martin: Historian and Pamphleteer
This is continuation of the story of libertarian historian James Martin in relation to Rampart College and Freedom school. The core formula of this kind of libertarian attitude goes back to Washington’s foreign policy: “Stay home and don’t interfere in other people’s business”.

V. The Libertarian Historians and Their Colleagues on the New Left
This chapter is about interaction between new left and libertarian historians. Lots of references with the most interesting being work of Gabriel Kolko demonstrating that anti-monopoly government intervention into economy was initiated by monopolies in order to restrict competition.

FOUR: Some American Wars–Both Hot And Cold–Through Revisionist Eyes
I. The U.S. Civil War-the Revisionist View
The revisionist view is that Civil War was not about slavery, but about whether US is one perpetual state or relatively loose confederation of states. It was initiated and conducted by Lincoln in response to constitutionally legal intention of South to ceded. It was conducted with complete disregard to constitution and Bill of rights. The chapter includes a short review of work by DiLorenzo.

II. America in the World Wars–A Revisionist Perspective
This is based mainly on works of Barnes and comes down pretty much to putting guilt for war on American anglophiles: first Wilson in WWI and then Roosevelt in WWII. They both worked to provoke Germany and later Japan, creating eventually conditions when wars become inevitable. Obviously they did it in violation of constitution.

III. A Revisionist Look at America in the Cold Wax
This is another example of attitude of “blame America first”. According to revisionists the cause of Cold war was insistence of American leadership on leading role of USA in the world.

FIVE: The Polities of the American Revisionists
I. “Left” and “Right,” “Conservative” and “Liberal,” Differentiated Historically
This is description of 3 main ideological movements behind historical revisionism. An interesting discussion about Left and Right with Libertarians assigned to the Left.

II. The Decline of American liberalism–the Early Years
“Decline” is a book by Arthur Ekirch arguing that from relatively liberal beginnings America moved consistently in direction of more centralization and concentration of control at the expense of freedom. This chapter also includes the story of Whiskey rebellion and its interpretation by Murray Rothbard.

III. Conservative Republicans and Liberal Democrats in 19th Century America
This chapter is review of revisionist’s interpretation of XIX century political developments with 40 years of Jeffersonian party following 12 years of Federalists and then followed by Wigs until Civil War.

IV. Teddy Roosevelt, Woodrow Wilson, and the Triumph of Conservatism
This chapter is continuation of historical review through progressives of early XX century from Teddy Roosevelt to Wilson. An interesting look provided at Wilson as individual who tried implement liberal ideas by conservative methods.

V. Herbert Hoover’s New Deal
Revision of Hoover administration to state that it was actually Hoover who started New Deal era of rapidly increasing government.

VI. The Myth of the “Old Right”
This revision is about actual New Deal implemented by FDR. FDR presidential run in 1932 included promises to decrease government expenditures, balance budget and provide sound currency. The actual actions were exactly opposite. The loose group of intellectuals resisting Roosevelt’s New Deal was designated “Old Right” when in reality they were mainly a bunch of classical liberals defending market and small government rather then “Law and Order” conservatives. Another revision is about role of New Deal as promotion of big business at the expanse of free market.

VII. The Goldwater Anomaly
This chapter is about new look at historical development from point of view of struggle between classical liberalism of free market vs. conservatism of big government. Before New Deal these were two forces competing for political power. From Roosevelt until Goldwater it was basically 2 anti free market party since both Republicans and Democrats supported corporate state with big business and big government working in tandem.

VIII. The Reagan Fraud–and After
The Goldwater’s run is considered anomaly because Republican Party of Reagan only used rhetoric of free market remaining the supporting force of corporatism in its actual actions.

SIX: The New American History Wars
The final part of this book is about importance of history teaching that forms views of young people and through their action impacts reality in the way consisted with these views. It goes through a number of authors and textbooks that had a serious impact in last half century.

I. Why Textbooks Matter
This chapter is review of history of textbooks use in American schools as main source of historical information. It traces use in textbooks stories of early XX century stress on common ancestry and culture with British. This may explain at least to some extent American support for entry in WWI on the side of British. Starting in 1960s the left applied a very serious effort to promote their views in historical textbooks. They were mainly successful in these efforts.

II. The Breakdown of the Consensus-the Case of Howard Zinn
This chapter contains story of Howard Zinn writings based pretty much on his communist ideology that become widely accepted in American colleges.

III. American History According to Eric Foner
Eric Foner is another history author who while being “red diaper baby” wrote with somewhat more traditional understanding of history then revisionists. In his books Lincoln is quite a positive hero and WWI and WWII were not entirely adventures of American Imperialism.

IV. Thomas E. Woods. Jr. vs. Larry Schweikart and Michael Allen
These authors are a bit more right wing and it is interesting that their books are widely read by students outside of official curriculum.

V. History, Fiction, and Objectivity—Some Concluding Observations
The final word is praise to Gore Vidal and his novels that should be considered a legitimate historical writings and overall conclusion that objectivity in history is not possible if construed as an absence of any ideological influence, but it is possible if construed as even-handedness and fairness.

My Take on It:

I am petty much agree that complete objective historical narrative is not possible. However I think that Cliometric that is narrative based on documented historical facts especially numerical facts such as demographic and economic statistics is the best way to achieve something close to objective analysis. Such objective numbers based analysis is badly needed after nearly a century of left-wing big socialist government supporters’ controlled historical narrative in American educational systems causing formation of new generation brainwashed into believing in all this junk.
Interestingly enough that people of my generation brought up in conditions of totalitarian Soviet Union, when interpretation of history had to be supportive of ideals and objectives of Communist Party with facts changing or being created as needed, were inoculated from this socialist intellectual disease by reality of everyday life under socialism with its deficits of everything, special supply system for communist elite, and attempts of communist to control any intellectual activity. Here is my great hope that the seemingly overwhelming dominance of left wing statists in education is not really final. As it always happens, the reality tends to penetrate whatever ideological walls are built by propaganda in the minds of people, opening these minds to other explanations of the events when reality of decrease in economic quality of life hit home.
I think that the ideological conquest of American minds that led to triumph of left in form of Obama administration is about to fall apart due to consequences of actions of this administration in both economic and political areas. With no real ability to suppress dissent on par with abilities of KGB or Gestapo, the American left will not be able to continue their inhumane experiment for 70 years, as was the case of USSR.

20140517 Difference

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Main Idea:

The main idea of this book is not only that diversity or difference in skill sets, knowledge, attitudes, and other human qualities is important and beneficial in achieving objectives, but that it is more important then individual ability. In addition to this interesting idea author also brings in commonly used political meaning of diversity as diversity of skin color, religious believes, and ethnic background, arguing that all these differences provide for different approaches and therefore improve performance.


Prologue: How Diversity Trumps Ability
This statement based on computer based experiments when two groups of people were selected to solve some problems. One group was selected randomly and therefore diverse while another included best individuals performers. The counterintuitive result was that diverse groups were consistently superior in problem solving than groups of superior individuals. Additional reference demonstrating the same idea is provided from “Wisdom of crowds” and other literature.
Introduction: Unpacking Our Differences
The two examples of successful use of diversity are provided: Eli Lilly web site seeking solutions for posted problems; and WWII decoding success of Bletchley Park by collection of diverse individuals. From these examples comes the Diversity Conjuncture: DIVERSITY LEADS TO BETTER OUTCOMES.
The logic of book implemented in 5 parts:
1. Review of five different types of diversity
2. The Benefits of Diverse tools
3. Diverse values
4. Formulation of diversity benefits claims:
a. Diverse perspectives and tools enable collections of people to find more and better solutions
b. Diverse predictive models enable crowds to make better predictions
c. Diverse fundamental preferences frustrate the process of making choices
5. Application in real world.
This introduction also puts a very unusual twist on hot issue of affirmative actions: they make sense as long as different identities correlate with cognitive diversity. This correlation is taken as given, but it is not necessarily so.

1. Diverse Perspectives How We See Things
The perspective framework is provided: A perspective is a map from reality to an internal language such that each distinct object, situation, problem, or event gets mapped to a unique word.
Examples: perspective of mathematician vs. chemist; various perspectives on quality of ice cream. Very interesting presentation of the same simple game Tic Tac Toe from different perspectives making it unrecognizable.

2. Heuristics: Do the Opposite
Definition: A heuristic is a rule applied to an existing solution represented in a perspective that generates a new solution or a set of possible solutions.
Example “Do the Opposite of what you initially wanted” provided from Seinfeld episode as “successful” heuristic for George Costanza.
Heuristics reviewed:
• Traveling salesman heuristic
• Topological heuristics
• Gradient heuristics
• Error allowing heuristics
• Population heuristics

3. Interpretations: Our Own Private Flatland
An Interpretation is a map from objects, situations, problems, and events to words.
Projection interpretation ignores some dimensions of a perspective.
A clumping interpretation creates categories of similar objects that are not simply projections of attributes.

4. Predictive Models: Judging Books by Their Covers
A predictive model is an interpretation together with prediction for each set or category created by the interpretation. Simple example of predictive matrix is provided.

5. Measuring Sticks and Toolboxes: Calibers for the Brain
This chapter adds measurement to previous discussion of tools: Perspectives, Heuristics, Interpretations, and Predictive models. The measurements discussed based of multiple IQ measurements and their use.

6. Diversity and Problem Solving: Darwin’s Brass Tacks
The rule of diversity trumping individual superiority for problem solving restated and explained as following: the best individual perfumers tend to be similar and therefore are looking for solution in the same place achieving local optimization. Diverse problem solvers are looking for solution all over the place including areas of absolute optimum, which often is outside scope of best performers. The rule is not absolute. It requires fulfillment of four conditions:
a. The problem is difficult. No individual problem solver always locates the global optimum
b. All problem solvers are smart enough to recognize solution
c. Any solution other then the global optimum is not a local optimum for some nonzero number of problem solvers
d. The initial population of problem solvers must be large
A very interesting idea comes from Darwin: selection reduces diversity. In other words by selecting the best and brightest to solve problems we actually cutting off all possible solution that could come from not the best and brightest.

7. Models of Information Aggregation: Mindless Signals
This chapter about wisdom of crowds and conditions when it happens: different individuals have knowledge of different parts of solution while various errors distributed randomly and therefore cancel each other.

8. Diversity and Prediction: The Crowd of Models
For predictions the diversity matters as much as ability. Not less and not more. From here comes the Diversity Prediction Theorem:
Collective Error=Average Individual Error – Prediction Diversity
The potential downside: madness of the crowds. People in the crowd conform to prevailing views and suppress non-conformist opinions. The result is dramatic decrease in diversity or even its change to negative value in formula.

9. Diverse Preferences: Why Tapas
Notions defined of Fundamental Preferences (about outcomes) and Instrumental Preferences (how to get there). Preferences are different from choices. They are ordering of alternatives rather then selection of alternatives. Example fundamental preference: reduce crime first and care about better housing second. Example of instrumental preferences: try to reduce crime by increased policing first and by education second.

10. Preference Aggregations: Four (Not So) Depressing Results
Here is an important mathematical results going back to Kenneth Arrow:
• Collective preferences may fail to exists
• Unconstrained voting process may result in arbitrary choices
• People may have incentives to manipulate the choice process
• Common resources (public goods) may be underprovided

I personally love Arrow’s theorem so much that I have to include it: “No complete, transitive collective preference ordering based on individual preference ordering exists that satisfies unanimity, independence of irrelevant alternatives, and nondictatorship if all possible preferences are allowed.
Also provided other mathematical analytics confirming the main result: no collective objective could be defined without manipulation and/or dictatorship or at least suppression of minority objectives.

11. Interacting Toolboxes and Preferences: Go Ask Alice
There is complex interaction: Diverse fundamental preferences produce diverse values and different sets of possible solutions. The effects of interaction: diversity begets diversity; diverse predictive models create diverse instrumental preferences.

12. The Causes of Cognitive Diversity: Family Vacations, College, or identity?
Summary so far:
• Cognitive diversity produces benefits
• Fundamental preference diversity creates problems;
• Collections of people with diverse cognitive toolboxes and diverse preferences have higher-variance performance.
Causes of diversity: DNA, Training and Experience, Identity, finally and very important – Serendipity.

13. The Empirical Evidence: The Pudding
This chapter is about proper collection and analysis of data. Example provided of hypothetical experiment to define if bike is faster transportation then walking. The result really depends on user having skill to use bicycle.

Here are the areas were diversity hypothesis is supported by facts: Predictions and Problem Solving. The confirmed Formula: Net Benefits = Gross Benefits of Diversity – Cost of Diversity.
The overall empiric results:
Cognitive diversity always improve collective performance
Identity diversity performance impact is not clear. Sometimes cost of identity diversity is too high when groups fight each other.

14. A Fertile Logic: Putting Ideas to Work
This chapter contains more or less detailed recommendations for effective use of diversity:
• Move beyond stock portfolio analogy in building diverse groups by taking into account superadditivity of diverse tools
• Contain multitudes (Whitman) by not being afraid of contradictions
• Bring in and listen to dissenters
• In politics encourage diverse citizens
• Encourage interdisciplinary efforts
• When building groups distinguish the Fundamental from the Instrumental
There is also a sub-chapter about use of diversity in hiring and admissions.

Epilogue: The Ketchup Questions
This epilog is pretty much call to invest necessary effort not only into tolerance of diversity, but go farther and embrace diversity because it would help to solve problems and improve lives.

My Take on It:

The term “diversity” is pretty much spoiled for me by its use to justify racial preferences, or support for illegal immigration, or refusal to reject intolerance, or even expression of sympathy to historical grievance or religion motivated terrorism.

However I agree with thesis of this book and I think that application of recommendations provided in it would be very beneficial for everybody’s wellbeing and prosperity. The only thing that I believe did not get proper treatment is tolerance. I think that if society to survive diversity, it should be extremely tolerant to everything except of intolerance of actions. Somehow people get excited when somebody said some stupid thing about race, but find it wonderful to have official race discrimination in college admissions. I would much prefer opposite attitude: everybody ignoring with contempt stupid talks by individuals and get excited and seriously fight all forms of race, religious, and any other form of discrimination.

As to the problem of people not getting proper treatment in childhood and schools, I am all in support for additional training to close gaps that prevent such people from competing on equal basis. I am completely against of having different criteria for anybody. Somehow in sport nobody suggests that athletically not very proficient people participate in Olympics running shorter distances or getting some seconds shaved off their time. The real consequence of this is not advance of disadvantaged, but cultivation of resentment resulting in inevitable increase in cost of diversity to the point of negative consequences.

20140510 The Average is Over

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Main Idea:

This is nicely analyzed and documented description of change in market labor requirements due to automation. This process allows automate medium complexity tasks and correspondingly eliminate middle earners with average skills who do these tasks. What left is top and bottom: the top skill and top earnings individuals whose labor cannot be automated: entrepreneurs, senior level professionals, managers, and scientist on one hand and low level low skills and low earnings jobs that are not easily automated: personal services, retail sales, and similar jobs. It would lead to significant changes in American politics, wealth distribution, and class relationships. The expected outcome is increased taxes, decrease in rents, decrease in consumption, and decrease in upward mobility due to difficulty of getting to the top.


PART I Welcome to the Hyper-Meritocracy

1. Work and Wages in iWorld
This chapter is pretty much description of the new brave iWorld where computers and related technology takes more and more tasks that used to be done by humans, leaving the young generation, even with the college level education, unemployed.

2. The Big Earners and the Big Losers
This is analysis of market scarcities and abundances that leads to high returns for individuals in possession of scarcities and correspondingly low returns to individuals in possession of abundant resources.
Scarcities are: natural resources, Intellectual property especially new ideas, and Quality labor with unique skills. Abundant are: unskilled labor and monetized wealth. Correspondingly winners are: Individuals in control of natural resources from American superrich to Russian oligarchs; innovators and individuals with unique marketable skills.
Identified areas of growth and prosperity: Marketing and Finance due to increase in value of effective resource allocation, Managers due to increase in teamwork, top level individual workers due to high dependency of results on individual actions and uniqueness of high level skills.

3. Why Are So Many People Out of Work?
The explanation provided is simple – majority of people have average skill set and demand in it is going down dramatically. An interesting analysis based on chess game that underwent invasion of chess computers. The chapter includes review of unemployment impact of great recession and phenomenon of freelancing.

PART II What Games Are Teaching Us

4. New Work Old Game
This is a small chapter about use of computer in games, specifically in chess.

5. Our Freestyle Future
This is continuation of discussion about chess, computers, and human interaction as Freestyle operation – probably future of work.

6. Why Intuition Isn’t Helping You Get a Job
This part is about human intuitive decision-making versus computer-based decision-making. It comes with an interesting set of rules:
• Human strengths and weaknesses are predictable
• Be skeptical about elegant intuitive theory
• It is harder to get outside of your head then you think
• Revel in messiness
• We can learn

7. The New Office: Regular, Stupid, and Frustrating
At first it is about new work environment saturated with computers and technology. Then author is describing movement to use this technology to grade humans with example of FICO score expanded to multiple other areas, providing foundation of multiple fears of computers going wild or at leas making errors that humans would not make.

8. Why the Turing Game Doesn’t Matter
This is discussion of human versus machine and the fact that at current level of technology when computer consistently wins over human, the Turing’s criterion is not applicable any more. However the main thrust is to demonstrate that we are moving to human/computer combination in all areas of our lives.

Part III The New World of Work

9. The New Geography
The new geography of work is based on technology that allows instant communication and selection of who to communicate with. It also provide for easy movements leading to people sorting themselves out into groups. As example a statistics is given of dramatic increase in variance between the most and least educated cities. Similar geographic segregation is going on around the world.

10. Relearning educations
This is about dramatic changes in education when things like Khan academy, TED lectures, and such dramatically expand availability of best teaching methods and programs to everybody in the world. There is also a new understanding of learning processes developed based on computer games. It is self-directed and self-controlled processes when instead of grades student just plays until enough skills are mastered to move to the next level. The point is also made that there is plenty of space for human face-to-face teaching, but it comes as support for computer based self-learning.

11. The End of Average Science
The disappearance of average also fully applies to science. 3 reasons are given:
• Scientific problems become more complex
• Individual knowledge and contribution become more specialized
• AI computer could do research on their own
This process in its current status reviewed based on example of author’s area of expertise – economics.

12. A New Social Contract?
The typical reasons for coming dramatic social change are listed here: fiscal problems caused by generational entitlements of developed world, growing income inequality, huge populations of India and China are joining civilized world.
An interesting note about academic life as related to entitlements: the same professor who would defend unlimited safety net, would be pretty strict in his application of meritocratic attitude and demand for work ethic to his students and assistants.

Generally author’s forecast is stated like this:
a. Taxes will raise for top earners
b. Medicaid will be cut, but not Medicare
c. Fiscal shortfall will be taken out wage earners income through hidden cuts in benefits and additional burdens and mandates
d. Real estate rent will go down because people move to cheaper housing
e. Generally consumption expenses will decrease especially for junk.

The political changes per author are not expected to bring anything really dramatic such as revolution. America is still very rich country with one of the highest qualities of life even for relatively poor people. The political division expected to go three ways: high earners leaning democratic and low earners divided into two groups. One group that is living off government transfers would support big government democrats, and another one that is living off the relatively free market would support republicans.

There is also an interesting observation about division between high earners and high prestige groups. There is tension and a little bit of fight between them about what is more important: status currency of money or status currency of intellect.

The final word: do not expect dramatic changes in American polity, but dramatic changes in technology and environment are coming fast and it is both scary and exciting.

My Take on It:

Generally I agree with trend described in this book. However I do not think that average is over, it would rather change and quite dramatically. One things that got missing here is role of government not only as redistributor of wealth to the poor, but also as creator of meaningless and even harmful, but well compensated jobs for significant number or maybe even future majority of population.

The government jobs by definition have no value outside of legitimate government function of dealing with violence. These jobs produce something that nobody would buy on the free market. Actually author sees the future with government playing the decisive role in accommodation to changes described. I, on other hand, due to my half-life experience of living in USSR see another danger – it is danger that government redistribution of wealth could not prevent. This danger is boredom and loss of interest in producing something that people need and would buy and increase in interest in obtaining higher position in bureaucracy and better access to constantly diminishing pool of quality goods and services.

The only way out of this is to make sure that everybody had something to sell on the marked independently of demand for labor. I suggest equal rights for use of natural resources with individuals using less then average being able to sell these rights to individuals using more. This would eliminate dependency on labor sales or government loot for existence as long as one accepts life with somewhat below average use of natural resources.

20140502 Revolt Against Masses

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Main Idea:

This is a review of history of liberalism in USA as a product and political movement of self-conscious intellectuals directed against widely based democracy of uneducated and unrefined masses. This history starts a bit earlier then usual dating of progressive / liberal movement – not at the beginning of XX century, but a couple decades earlier when ideas of natural intellectual aristocracy start taking hold over minds of educated and semi-educated individuals.
The movement‘s objective was and is to overthrow “dictatorship of middle class” in America and establish rule of “the best and brightest” defined as individuals who successfully achieved accreditation from institutions accepted by other “intellectuals” as qualified to grand such accreditation: universities, especially ivy league universities, high brow publications, bureaucratic organizations of government, and all kinds of evaluation institutions created specifically for this purpose such as Oscars for cinema art, Pulitzers for journalism, Nobel for just about everything, and such. Since this accreditation in normal market economy does not necessarily could be easily converted into wealth, the paramount objective of the movement is to obtain control of violent machinery of the state and force transfer of resources from unwashed masses that created resources in the first place to control of “intellectuals”.
So far the movement was very successful, tremendously increasing size and role of government in American life. However this success was paid for by dramatic decrease in vitality of American economy and, consequently, levels of prosperity of American population. It seems that lately it got pretty close to achieving a tipping point when American Middle classes either rise to fight this enemy of their prosperity or will be destroyed by increasingly powerful bureaucracy that will inevitably will lead to additional and probably dramatic decrease in wealth and quality of life for vast majority of people including low level accredited “intellectuals”.


1. Progenitors
The beginning of contemporary liberalism came after Civil war massive industrialization that created the new rich. These new rich moved to the national scene in mass, but they were deeply resented by old gentry who was running country before. It took a few dozen years to produce forefathers of the movement: E.L. Godkin – founder of “Nation”, Henry Adams son of John Quincy and author of “Education of Henry Adams”, H.G.Wells author of Science fiction books, Herbert Croly founder of “The New Republic” and author of “The promise of American life”, Randolph Bourne author of “Youth and Life”, and Henry Mencken who made his name with books about plays of Bernard Shaw, and, obviously, Bernard Shaw himself.
All these individuals had similar world view saturated with contempt for regular people and hate to America as country where these contemptible regular people had power to live their lives the way they wanted and use resources they produced for their own purposes – the arrangement that severely limited intellectuals’ ability to direct development of society. Interestingly enough, this hate and contempt to democratic America was combined with admiration for Bismarck’s Germany, the country of all conquering bureaucracy that controlled society and provided social services appropriate for masses.

2. 1919: Betrayal and the Birth of Modern Liberalism
The idea here is that modern liberalism was born after WWI as rejection and even betrayal of progressivism. The progressives were aiming to improve democracy by reforms, while liberals rejected democracy as inappropriate form of government for contemporary world. The second term of Woodrow Wilson and red scare that actually was well justified, provided background necessary for this change. The milestone in change from improvement of America to contempt for America was collection of essays “Civilization in United States” written by elite Harvard graduates.

3. “Randolph Bourne Writing Novels” About Main Street
Bourne was a poet who hated America. This chapter is about a very popular novelist Sinclair Lewis and his novels saturated with the deep hate to American Bourgeois Middle Class, specifically the most famous of them “Main Street” and “Babbitt”.

4. Three Trials
These were: trial of Loeb and Leopold – two kids from rich Jewish families who killed a boy just from boredom and to prove their superiority after reading Nietzsche; Monkey trial about legality of teaching evolution; and Sacco and Vanzetti trial of two anarchists killing and robbing payroll guard. The point is made that intellectuals promote their agenda by using all three trials to prove that ideological complain can override the simple fact of each case: in Loeb case it was reasoning that killers were actually victims of society so their lives should be spared; in Scopes Monkey trial the whole case was intentionally initiated to reject ability of traditional society to maintain control over educational system; and in Sacco case the real fact were successfully overwritten by strife to make these two man into martyrs of labor movement.

5. Giants in Decline
This chapter traces fate of founding fathers of movement. Croly was disappointed with prospects of western civilization and eventually moved to support Mussolini and fascism before dying in 1930. Herbert Wells rejected both fascism and soviet communism, but for amazing reason of both these system being too democratic, that is having support of majority. Wells’ own ideas presented in “Open Conspiracy” were quite traditional – naturally born class of elite intellectuals ruling masses without any limitations whatsoever.

6. The Red Decade
It was decade of 1930s when western world was struggling through depression while intellectuals found example of bright future build in the Soviet Union with plan and control economy being superior to chaos of markets. The chapter brings in a number of Soviet supporters, propagandists, and enablers in USA who worked hard on behalf of Soviet Union as paradise for workers dutifully covering up truthful information about real Soviet Union as murderous totalitarian regime. Interestingly enough the common name for them at the time was “Penthouse Bolsheviks” that sounds a pretty close to contemporary “Limousine Liberals”.

7. The Passing Glory of the Vital Center
This is review of the next historical period of liberalism – post WWII development. It is mainly about Arthur Schlesinger and his ideas expressed in the book “Vital Center”. This strain of liberal / progressivism thinking was directed to distance itself from previous products of intellectuals – totalitarian Communist and Fascist regimes.

8. How Highbrows Killed Culture and Paved the Path to the 1960s
This is a story of 50s and liberal’s successful attack against American mass culture and consumerism. Two books from 1930s played a significant role in this attack: Aldous Huxley’s “The Brave New World” and Jose Ortega y Gusset’s “Revolt of masses”. Especially interesting is account of how mass culture moved to merge with classical culture through series of Great Books, TV performances of classic plays, and other attempts to bring high culture to masses. These attempts ended when intellectuals start mocking the combination of middle class with high culture and made a significant and successful effort to devalue such high culture in order to avoid any intellectual equalization with middle class.

9.Not a New Left but a New Class
This chapter is about 1960s when intellectuals moved to the next step of their battle against middle class using their prevalence in education to indoctrinate young generation move away from traditional values into tender hug of New Left. Galbraith provided the ideological foundation in his book “The Affluent Society”. In it intellectuals found their place as class of managers and technocrats superior to entrepreneurs and small business owners. It was also the time when pseudo scientific bureaucrats massively moved into politics first in Kennedy and then in Johnson administration. There is also an interesting reference to Eric Hoffer who identified this movement as the New Class aspiring to substitute old aristocracy and put themselves firmly on the top of masses.

10. From Jim Crow to Crow Jim
The point in this chapter is made that liberalism of 1960s was simultaneously statist and libertarian. It was striving to expand big government run by technocrats / bureaucrats and remove racial and cultural barriers. This went through a brief period of general agreement on colorless society, and then moved on to the new racism this time with superiority of black skin and inferiority of white. Paradoxically well-established white liberals for whom it seems gave license to expand government and correspondingly their power over middle class enthusiastically supported this switch.

11. McGovernized
This is review of tumultuous period of 1970s from initial far left liberal push of McGovern complain through republican big government of Richard Nixon who created a bunch of new federal administrations and such a pearl of liberalism as affirmative action, crash of Nixon administration in Watergate and return of one party rule of democrats with Jimmy Carter and completely democratic congress. 1970s was a time when failed rebels of 1960s got older and moved in mass into government, technocracy, and education. The big government supported businesses especially finance and other areas where many of intellectuals could find secure returns on their education relatively isolated from market. During these years leftists consolidated their views around ideology of big government and big business isolated from market and prepared foundation of their future massive offensive with objective to transform America into some kind of semi-socialist paradise where the best and brightest would make decisions in common interest and on behalf of everybody and where this contemptible middle class would be finally put in the low place where it belongs.

12. Progressives Against Progress: The Rise of Gentry Liberalism
This small chapter describes development of alliance between traditional liberalism and environmentalism that kind of provided “scientific” foundation for restrictions on growth of prosperity of middle class.

13. “The Philosophical Crisis of American Liberalism’?
This is description of philosophical transformation of Democratic Party from party of saloonkeepers, segregationists, private sector unions, and middle class workers with objective to provide protection and support to these groups within framework of market capitalism into party of government employees, public sector unions, and big government-protected businesses with objective to maximize control over all generated resources in hands of government leaving remnants of free market only in areas which government has problem to handle. At this point in late 1980s middle class was still too strong so technocratic liberal Dukakis went down to defeat due to damage inflicted on the middle class by liberal law non-enforcement politics, but philosophical framework for contemporary liberal / progressive ideology was pretty much settled down.

14. The Clinton Interregnum
Small chapter on Clinton years when liberal white house managed to accommodate republican legislature providing for relatively calm and prosperous period of economic prosperity. It also helped a lot that USSR fall apart so there were no serious external challenges.

15. Gentry Liberals and Public-Sector Unions to the Fore
This is a little bit more detailed description of formation of alliance between Democratic Party and Public employees Unions.

16. What Are Our Convictions?
This is an interesting question. In 2000s the left liberals of Democratic Party consolidated on mainly negative platform of opposing Bush II administration. With economy doing relatively well and Bush promoting republican version of expansion of big government, the main point become failure to limit wars in Iraq and Afghanistan. Financial crisis caused by big government intervention into financial markets ironically opened way to power for truly Leftist technocratic liberal wing of Democratic Party.

17. Conclusion: Obama Versus Main Street
The final chapter is about Obama, his administration and personality. Quite a bit of space dedicated to Obama’s successful reelection complain of 2012 when he won despite poor economy and lack of success in anything that he tried to do except for growth of government power. The conclusion seems to be that bureaucratic version of social democracy remains the only one of all isms of XX century that is still standing and there is no visible alternative to this arrangement.

My Take on It:

After a century of struggle BUPs (bureaucrats and politicians) finally arrived. With successful reelection of Obama administration, its nearly complete control over Democratic Party, and, despite Republican Party’s control of Congress, American liberal totalitarians seems finally have an opportunity to transform America in what they want it to be – docile government employees, protected against risks and prosperity of the free market, diligently working to implement great visions of the Best and Brightest. Fortunately it is not going to happen.
The one thing that inevitably comes with BUPs (bureaucrats and politicians) taking control over economy and/or any part of it is dramatic decrease in quality and quantity of goods and services generated. We can see it in every one of parts of American economy taken over by BUPs over the last hundred years: railroads, communications during AT&T monopoly, air travel during Aeronautics board control, education, home mortgage industry, and now healthcare services.
It is not obvious, but I think that we are on the brink of dramatic changes and real transformation of America because of a simple fact that this country populated by people who do not like and do not accept long term decreases in their quality of life. They already feel that exactly such decrease is happening now and they are becoming restless. Eventually, and probably pretty soon the young activist part of middle class will overcome remnants of educational indoctrination they were subjected to in schools and colleges and turn against people who brought this plaque of big government on them – liberal intellectuals and their Democratic party.
It’s going to be fun to watch.

20140426 Intuition Pumps

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Main Idea:

Intuition pump is a thinking tool used as a short cut to understand some issue or situation. This book is kind of collection of intuition pumps provided by professional philosopher. The samples of such pumps like Descartes coordinates, probability theory, or Bayes’s theorem are abound and Dennett demonstrates application of quite a few of them.
The list includes not only general thinking tools, but also specifics tools for thinking about Meaning, Evolution, Consciousness, Free will, and big discussion about computers, their software, and intelligent use of these machines.


I Introduction
II A Dozen of General Thinking Tools

1. Mistakes
Making mistakes is one and only way of making progress. One of the main processes when mistakes are indispensible is evolution. Basically every step starts with mistake or more precisely variation in copying DNA that provides for sometimes improved chances of survival in constantly changing environment. Making mistakes seems to come naturally to everybody, but I guess it does qualify as philosophical tool.

2. Reductio
This is a standard method in any discussion – reduction to absurdum. Good example of counterattack with Chomsky: if idea you are criticizing is so absurd, why waste time to go through critic of obvious? Another method – grasping the nettle and indorse conclusion. Example: J.J.C. Smart – “Yes, my theory of ethics leads to conclusion that is is sometimes ethical to frame innocent man”

3. Rapoport Rules
Anatol Rapoport author of winning Tit-for-Tat strategy for prisoner’s dilemma come up with the rules for successful critical commentary:
a) Re- express target’s position as clearly as possible to obtain confirmation of correctness
b) List all points of agreement
c) List all lessons learned from opponent’s position
d) Only after that provide critic of points of disagreement

4. Sturgeon’s Rules
Si-Fi author Ted Sturgeon’s law: 90% of everything is crap so concentrate on main points

5. Occam’s Razor
Do not multiply entities beyond necessity

6. Occam’s Broom
Sidney Brenner’s definition: “Removing facts not consistent with theory”

7. Lay audiences as Decoys
Disputes between experts should be conducted with lay audience that would require clarification for everything they do not understand. This prevents expert from talking pass each other.

8. Jootsing
Doug Hofstadter’s definition: Jumping out of the System

9. Goulding: Rathering, Piling on, and Gould Two-step
Steven Jay Gould: Rathering – slide out of false dichotomy; Piling on – use of “nothing could be farther from bla-bla-bla; Two-steps: Step one create a straw man. Step two – refute it, but state that opponent moved away from your straw man only under your attack

10. “Surely” Operator
Use “surely” as the way to dismiss opponent’s position without argument

11. Rhetorical questions
When encountered try to come up with non-trivial response

12. Deepity
Deepity is proposition that seems to be true, important, and profound mainly due to its ambiguity

III Tools for thinking about meaning
13. Murder on Trafalgar Square
The something obvious idea that the same event (Murder) would get represented similarly in the brain of different individuals regardless of how it got there – via different languages, communication tools and such. At the same time all these individuals could have a separate property – intentionality of this event.

14. An Older Brother in Cleveland
Meaning of statement is interconnected with multiple other representations in brains. The simple statement about brother in Cleveland could represent reality or not and be just a consequence of brain dysfunction.

15. Daddy is a Doctor
This is another example of statement by child without full understanding of meaning of doctor’s profession. The notion of sorta is added here.

16. Manifest image and scientific image
The manifest image – trivial and perceptual image of the world, while scientific image is image built according to rules. However the attention here is on ontology – the things that exists. Their images are built by evolution – perception and manipulation of such images help us to survive.

17. Folk Psychology
Folk psychology presented as a set of ideas that all humans have about themselves and other people’s knowledge and behavior. Especially important in this is the human propensity to find an agent in everything that is happening. This is the logic of “No stone moves without somebody moving it”

18. The Intentional Stance
This is extension of Folk Psychology – assignment of intention to all occurrences. It could be broken into 3 stances: physical stance – an entity complies with laws of physics, design stance – the entity is consciously designed and will work in accordance with design; intentional stance – entity has volition.

19. The Personal/Sub personal
This is the idea of division of person into personality and subsystems. The sample: “your brain does not understand English, you do”

20. Homunculi
This is an idea that human personality is at least theoretically subdivided into sequentially less complex subsystems – progressively more stupid homunculi.

21. The Sorta Operator
This is a notion of not complete understanding or action, but good enough for limited purposes. The sample: “ I Sorta understand theory of relativity”.

22. Wonder tissue
In short that there is no Wonder tissue means that out neuron despite whatever miraculous thinking produced by them seems to be are not “real miracle”, but just a specific types of materials working in full compliance with the known laws of nature.

23. Robot control room
This is a description of person in control room of giant robot that he should control without understanding of how exactly available controls work. After some trials and errors more or less competent management is quite possible. In short it is a case of competence without comprehension.

IV Interlude about computers.
24 – 27 Skipped because of triviality for me, as professional working with computers for 40 years.

V More tools about meaning
28. Redheads
This is about stereotyping. A sample stereotypical believe: For all X if X is a redhead Y is TRUE.

29. Wandering Two-Bitser
This relates to original intentionality – something about us that is not derived from our action, but intrinsic to us. To provide distinction the best way is to put examples of original versus derived intentionality such as:
Two-Bitser: Vending machine, which recognize US quarter as original intentionality and Panama coin as derived.
Twin Earth: Everything exactly the same only instead of horses there are schmorses with only difference hidden in DNA. Individual transferred to twin earth would call them horses mixing original and derived intentionality.
Robot designed to maintain comatose body in good shape for a long time would require self-programming to meet all environmental changes. In this case original intentionality of maintaining body initiate a huge tail of derived intentionality. Same situation happens with chess playing computer.
It is kind of similar to “selfish gene” logic. The original intentionality is for gene to maintain its code in perpetuity; the animals are just derived intentionality machines to do it.

30. Radical Translation
This is about Quine’s principle of indeterminacy of radical translation: given task of designing translation between completely different languages with no commonality and individuals familiar with both, result would be completely different translation manuals, but no factual confirmation which one is correct.

31. Semantic Engines and Syntactic Engines
This is about human brain. It designed to produce model of future and correspondingly direct actions of body. It is defined as semantic engine. In fact being material and working in accordance with physical and chemical laws, all parts of human brain are just syntactic engines.

32. Swampman and Cow Shark
This is a pump about instant replica of a person that somehow maintains some characteristics, but looses others, for example could not recognize friends. More precisely internal conditions remain intact, but knowledge of external world disappears. Cow shark is entity with all atoms and appearances of shark, but with cow DNA.

33. Two Black Boxes
This is a model with two connected black boxes: one with controllers (buttons) and another with presentations (lights). It provides for discussion about complexity of communication and difficulties of learning code from external presentations. The system could contain all the possible truths, but it would not be thinking system.

VI Tools for Thinking about Evolution
34. Universal Acid
This is an acid that would dissolve everything. The challenge is how to save it. Darwin’s idea of evolution is similar – works on just about everything.

35. The Library of Mendel
This is comparison of imaginary library of Babel that contains all conceivable books in all languages with all conceivable combinations of DNA.

36. Genes as Words and Subroutins
This is DNA comparison with computer program.

37. The Tree of Life
This is imaginary tree of all DNA sequences ever existed built as tree with branches and everything

38. Cranes and Skyhooks
This is discussion of complexity of life and evolutionary explanation of it. The representative image provided is construction by using cranes that was build from the bottom up versus skyhook coming down from the sky. The logic of evolution shows that skyhook is redundant. Everything could be built with cranes

39. Competence without comprehension
The infinite sequential loop of transfer with change – trial – approval / rejection, and transfer of approved design to the next generation does not require any comprehension whatsoever, but is very competent in achieving results.

40. Free-Floating Rationales
This is about human tendency to find intention where none exists. Comparison of termites and architecture coming up with similar design, but termites with no intention to do it

41. Locust and Prime numbers
This is an application of human logic of evolution to the reproductive cycle of cicadas that occurs in the years equal to prime numbers. It seems to be linked to cyclic appearance of predators.

42. Stotting
Stotting is prey’s demonstration of high level of fitness to the predator like gazelles jumping higher then necessary while running from lion. The message: “I am fit and you are not going to catch me, so let’s not waste resources on this pursuit”

43. Prime Mammal
This is chicken and egg dilemma. If every mammal had mammal parents where the first mammals came from?

44. When does Speciation occur?
This is about speciation – generation of the new species from old one. It is very rare event. Intuition pumps: geo separation of specie members one from another that leads to independent development over time.

45. Widowmakers
This is not that much about widow makers as about mitochondria DNA that allow to trace female line of inheritance and human individuals being a collection of various organisms to such extent that cell with non-human DNA outweigh cell with human DNA Another interesting thing – 99% of all organisms that ever lived left no offspring.

46. Cycles
This is a discussion about cycles and evolution as cyclical process with small changes accumulated during repetitions. The idea is that non-biological cycle create condition for initial start-up of bio evolution

47. Frog’s eye
This is the use of characteristics of frog’s eye to identify flying small object as food to present notion of exaptation – use of existing property for new environment. Example is provided of frog catching pellets from people in zoo instead of real flies.

48. Leaping through space in the Library of Babel
This a bit of discussion about science versus art: Newton if replaceable, while Shakespeare is not.

49. Who is the author of Spamlet?
This is about author issue: if Frankenstein created robot that wrote a play. Who is the author of the play? Other examples are from the real life – computer chess and music.

50. Noise in the Virtual Hotel
This is ac comparison between real and virtual worlds. The virtual hotel is cheap, but does not have any intrusions that are typical for real world. Then it goes through computer modeling of evolution and creativity. The key here is that virtual world is a lot simpler then real world.

51. Herbs, Alice, and Hal
This is a pump about humans. Herb and Alice make a child Hal, but not in usual way. They sequence and splice their DNA in tube. Then speculation what if humans have different sequences for different communities, they would not be compatible.

52. Memes
This is about MEMES as another conduit of evolution, only this time it is a cultural evolution.

VII Tools for Thinking about Conscience
The question here is if it is possible to comprehend conscience

53. Two Counter-images
So the images are kind of negative. Conscience is not the top and it is not media as TV. The interesting suggestion is that conscience is like a fame or “cerebral celebrity”.

54. Zombic Hunch
This is inability to accept that robots can have conscience even if it is typical to assign it to just about anything in cultural artifacts. Zombies do the same as humans and there I no behavioral differences, but they are not human.

55. Zombies and Zimbos
This is a funny discussion about ability to conceive staff. It goes to bring in Zimbo that is Zombie with ability of self-monitoring.

56. The Curse of Cauliflower
This is about notion of Qualia – term for way it seems to us, or specifics of individual’s perception unknowable for other people.

57. Vim = Money
This is discussion of Qualia with use of notion of real money to measure all other types of money. The vim is used as non-material characteristic of real money.

58. The sad case of Mr. Clapgras
This starts with idea that “Qualia are what makes life worth living” and goes through philosophical discussion of two pathologies: prosopagnosia (inability to recognize faces) and Capgras delusion (believe that close person is impostor). The derivative is produced –Mr.Clapgras whose perception is normal, but emotional attachments are screwed. For example usual emotions for blue color are attached to the yellow.

59. The Tuned Deck
This is about complex problems of conscience. Complexity illustrated by card trick – the tuned deck when magician claims to be able to hear where the each specific card is in the deck. The trick was presented as very complex, but was really very simple. The key was to make people to look for complexity.

60. The Chinese Room
This is about experiment to show that strong AI is impossible. The strong AI is computer program capable to explain human cognition. AI computer in the room uses Chinese language. Researcher outside the room does not understand and could not translate. Infer – there is no understanding of Chinese in the room.

61. The Teleclone fall from Mars to Earth
This is about question of material identity: is teleported person is the same as original?

62. The Self as Center of narrative gravity
This is thinking about difficulty of defining self. Self is not part of brain. The notion presented of self as immaterial mathematical point of gravity of a person.

63. Heterophenomenology
This is a combination of third-person and first-person view of self. More precisely it is the third-party scientific analysis of conscious representations by first-party of events and experiences that he believes to be true, regardless of third-party knowledge about correctness of this evaluation. As example the sighting of UFO could be used.

64. Color Scientist
This is mental experiment about color scientist who is able to see only in black and white. The scientist uses wavelength to recreate representations of color. Does switch to color TV for data collection change anything? Believe is that it does moves us beyond physicality.

VIII Tools for Thinking about Free Will
65. A truly nefarious Neurosurgeon
Neurosurgeon tell patient that he implanted control box in patient’s brain. The claim is that it removes responsibility.

66. A Deterministic Toy
This is pump about toy (grid of cells) to think about determinism – the idea that current status conclusively defines all future statuses of the system.

67. Rock, Paper, and Scissors
This pump is contrary to determinism- unpredictability of winner when pairs selected randomly. For this one there is a good advice: be unpredictable.

68. Two Lotteries
This pump is about two lotteries: one with winner defined before and another after ticket distribution. In the first one winner predetermined in the second winner is random.

69. Inert Historical Facts
This is pump about facts that may or may not be true like piece of gold one has used previously beloning to Caesar. From here it goes back to discussion about determinism

70. Computer Chess
Another pump about determinist thinking – is chess computer moves predetermined or not? Then it goes into funny discussion about changing the future.

71. Ultimate Responsibility
This is about responsibility: one does something because the way he is, but he did not make himself, so he has no responsibility for what he does.

72. Sphexishness
This is a term for rigid robotic mindlessness. Applied to animal with defined pattern of behavior, but could be also used as intuition pump for determinism versus free choice.

73. The boys from Brazil
This is about law being impossible without assumption of free will. The pump goes to scientist from Brazil who clones little Hitler.

IX Philosopher
74. Faustian bargain
This is a bunch of choices for philosophers between achieving intellectual objective to solve the problem, or get fame forever by incorrect but popular theory.

75. Philosophy as Naïve Auto-anthropology
This is a view at philosophy as discipline that negotiates traffic between manifest and scientific images.

76. Truths of Chmess
This is about the higher truth versus simple or practical truth. The example from chess – it is common knowledge that it is not possible to checkmate with a lone knight and king. However there is a position that is shown when it is possible. The Chmess is an invented game just like chess where king can do two steps, disabling the shown position.
Burton Dreben: “Philosophy is garbage, but history of garbage is scholarship”

77. 10 percent that’s Good
The idea that 10% of philosophy contains the truth and worth effort to develop, even if 90% is garbage.

So it comes down to use of tools trying to answer unanswerable questions: meaning in material world, how life evolved, how consciousness work, and if there is a free will.

Some intuition pumps that where left out: “Where am I”, Darwinian spaces, and many others.

My Take on It:

General Thinking Tools: A very nice set of intellectual tools. In addition to ones that I know, use all the time, and love such as Occam razor I highly appreciate addition of Occam Broom and Rapoport rules. I think it is a great systematization that allows recognizing quite a bit of malicious ways to avoid meaningful discussion. I guess if one encounters an opponent spewing lots of “Deepity” type of arguments or “Surely” operator, it is a good sign that discussion is not based on search of truth and therefore in most cases just meaningless. On other hand if conducted in a fight for hearts and minds of relatively open-minded audience the knowledge of these tools could help.

Tools for thinking about meaning: the most important for me here is a contrast between manifest and scientific way of thinking. It happens all the time especially in politically acute discussion. The clear understanding of manifest thinking is absolutely necessary in order to remove mask of scientific truth from ideas that have not a smidgen of science in them from scientific communism to global warming.

More tools about meaning: the additional piece on meaning is somewhat overcomplicated, bringing many hypotheticals like swamp man and cow shark. It goes way to deep into contrast between materiality of brain and idealism of its activity. I have difficulty in accepting it as some kind of controversy with semantic engine of brain’s predicting future and syntactic engine of brain – its material structure. As far as I am concerned it is simple and relationship of chemical molecules of the human brain and chess moves generated by this brains is no different then relationship between computer chips’ chemical molecules and chess moves generated by computer. The philosophical difference between those two is not in the process itself, but how each of these two systems came to the point of playing chess. One system – human came there as self organizing and self-directing system that was developed over long years of growing up and in process changing structure of its brain through continuing encounter with environment, while another one – computer was externally designed and programmed to use logical and mathematical processes to define the next move. The actual chemical foundation of the system is just irrelevant.

Tools for Thinking about Evolution: I really struggle to understand why evolution seems to be difficult for many people to understand and causes such a controversy. As far as I am concern it is just universal process that occurs every time when self-directing systems are involved. It is not only biological systems with genes transferring information, but also cultural evolution with memes transferring information. Moreover just about every human nontrivial activity involving learning something new could be viewed as process of evolution when every attempt that failed to achieve objective leads to change of approach (mutation of meme) until objective is achieved and new meme settled down in the head of the human who worked on it.

Why it is so difficult to see the commonality of evolutionary process in everything that biological systems do with results somewhat hardened in what they are is beyond me.

Tools for Thinking about Conscience: I find notion of Qualia introduced here very useful in presenting uniqueness of experience and reaction of every bio system. Again, as with many other things in philosophy my simple mind makes it difficult for me to understand why a conscience is such a difficult thing to understand. In my humble opinion it is just an ability of self-directing biological system to behave at higher level of complexity by identifying itself as a separate entity from environment, and by doing so to dramatically increase effectiveness of its actions.

Tools for Thinking about Free Will: The whole discussion about determinism, free will, and responsibility seems to me being totally over-connected. In my opinion these 3 things have nothing in common if looked at not from academic point of view of how it is, but rather from practical point of view what to do. From this point of view it does not matter if somebody done something because it was predetermined or because he had free will to do it. What does matter is what to do about it. The experience shows that if properly incentivized (meaning this widely, including beyond limited material incentives), people would do things or not in accordance with incentives.

Besides, complete determinism is not possible and we know this for a while from quantum mechanics. We are now learning that even DNA code as deterministic as it seems, in reality does not work the same way in all circumstances. So with full determinism out of picture the choice between different courses of action becomes domain of free will, however it may be limited.

The final thought is about philosophy. I pretty much agree that it is 90% garbage, but I still think it is important because this garbage always accumulates in the mind of human beings and make them act in very specific and often unpleasant way like theories of race superiority which are the garbage if there is one. It would be nice to limit this accumulation to at least benign forms.

20140420 Bringing Power Back Home

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Main Idea:

The big central government is way too far away from real people to be efficient supporter of collective needs of community. At the same time low-level local governments are too low on resources to do the same. The most effective way is to create more or less standard government units optimized to be small enough to be close to human level and big enough to have necessary resources. In short the thrust here is not against government per se, but for optimization of size of the government.


Bringing Power Back Home
Interestingly enough it starts from reference to history, specifically to Machiavelli as expositor of Florentine republican ethics of “civic humanism”. It stated that to maintain immortal republic the following should apply:

1. Widespread distribution of power and thus property
2. Citizen must be participant in civic life
3. Every able-bodied male should serve in militia to protect against invasion

The discussion goes to size and level of localization of government necessary to meet these requirements. The obvious conclusion is that contemporary American society moved far away from these requirements.

The solution offered is to create shires – government bodies with sizes between 2,500 and 60,000 people in which participatory democracy is possible. These shires would be the main governing body that will transfer very limited power to superior government bodies at the state and federal level only to the extent necessary to conduct functions that are impossible at the local level such as defense, diplomacy, regulation of trade, and such.

The short expression of idea is: “Bring Government home”.

My Take on It:

Since I do not see government or any collective for that matter as thinking, feeling, and acting entity, but rather as more or less organized hierarchy of individuals, I do not believe that change in size would matter that much. There are plenty of examples that even such minimally conceivable unit of government, as homeowners association becomes a petty tyranny hell bound on stepping on individual rights and transferring other people wealth to functionaries of government.

I believe that the only real solution is not to tinker with the size of government, but drastically decrease role of government to areas of its competence which is limited to areas where use of violence is necessary and justified. All other areas where government involved in now such as wealth transfer from rich and poor, regulation, and such would be taken care of by individuals and joint or separate market exchange between them as long as all individuals have something significant enough for sale. The core of this something in my opinion should be equal, unalienable, and marketable rights for natural resources supplemented by individuals’ ability to produce marketable goods and services.

20140411 Vienneese Waltz

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Main Idea:
This book, at least partially, written to contradict the idea of Random Walk and Efficient Market. It based on the ideas of Austrian school of economics, which views market as representation of human actions and even if these are actions of multiple humans with different, often contradictory ideas, it still subject to human behavior including mob behavior and therefore is far from being completely unpredictable. Austrians and especially von Mises saw economy as the field of human actions susceptible to analysis, but way too complex for mathematical analysis. In short Skousen sees market as a dance – definitely not random movement along dance floor in accordance with some rules and esthetics. However it is quite fast dance: Viennese Waltz which is not easy to trace and difficult to predict.


Part I
1. What is the Austrian School?
This is a short 2 pages opening describing Austrian school as foremost defenders of free market economy and place of its birth – Habsburg’s Austro-Hungarian Empire. From this point follows the review of personalities and their input.

2. Carl Menger (1840-1921): Subjectivism and the Marginalist Revolution
Principle of Subjectivism – Prices defined by consumer’s subjective demand not by costs or labor value. There is no intrinsic value.
Marginal Revolution – Price defined by the utility of last (marginal) unit of profitable sale.
Time value – depending on amount of time from inception to final product and utility to consumer goods and services divided into lower (consumer) and higher (producer) order goods and services. Implies greater price volatility in lower order goods.

3. Eugene Bohm-Bawerk (1851-1914): Saving, Interest Rates, and the Theory of Capital
Importance of Savings – increase in level of roundabound method of production increases productivity and output. In other words savings directed into expansion of base of higher order (producer) goods and their quality.

4. Friedrich von Wieser (1851-1926): The “Great Man” theory
The Creative Entrepreneur – high importance of human individual who creates new sometimes break through products and services. In definitive text of “The Theory of Social Economy” he defined terms of “Marginal Utility”, Economic Planning”, and “Opportunity Cost”.

5. Ludwig von Mises (1881-1973): Human Action
Cause and Effect – Human actions are always purposeful and rational therefore if actors are known and understood, their actions and results could be predicted including future prices and market movement trends, but not details such as timing.

People are Different – Humans are too complex and understanding of their action requires completely different science – praxeology. That is science of purposeful actions different from science of purposeless processes of unanimated objects (Dualism). Overall humans are unpredictable and therefore quantitate methods could not possibly work. The economics as science is valid only at qualitative level.

Socialist Calculation Debate – Socialist planning is meaningless because without prices defined by competition efficient economy could not work. The market is process of discovery of what humans really want and what value they put on different goods and services. Without such rediscovery of constantly changing needs and values socialist economy is bound to overproduce some things and under produce others.

6. Friedrich von Hayek (1899-1992) The Austrian Theory, of the Business Cycle
Austrian Business Cycle Theory – Business cycle of boom and bust caused by government intervention into money supply via change in interest rates for credit. When government decreases cost of money below natural level it causes unhealthy expansion because cheap money encourage inefficient investment that will results in production of overpriced goods and services causing inflation. Eventually either government had to drastically decrease interest rates causing bust, or inflation will run out of control that would also lead to even more painful bust. The bust liquidates inefficient investment and businesses until money supply contracts to the level when only most efficient investment is justified causing start of next round of expansion.

7. Schumpeter (1883-1950): The Creative Destruction
The Creative Destruction – The great entrepreneur comes up with new revolutionary product or service that satisfies human needs much better then previously existing methods. The new product destroys existing businesses that use outdated methods or products.

8. Kirzner (1930- ): The Discovery Process
The Discovery Process – Entrepreneur as scientist discovering new products, services, processes, and even human needs those never existed or were latent before.

9. Murray Rothbard (1925-1995) and the Hard-Money Movement
The Cause of Stagflation: Price of consumer goods tend to rise faster then price of producer goods with prices realigned during recession caused deflation. With government pumping money into economy deflation is not occurring so prices could not be realigned causing stagnation and inflation at the same time.

The Origin of Banking and Money: Manifesto of hard money movement. Main idea is that government is inherently corrupt and therefore the only way to stable money is gold standard.

10. The 2008 Financial Crisis: Austrian Response to the Chicago School of Milton Friedman (1912-2006)
This is review of differences between Austrian school and Chicago school of economics. While both are supporting free market economy the Chicago school emphasize government monetary policy that it deems inevitable, while Austrian school insists that only gold could provide for good monetary policy.

The big work of Friedman was proving that government’s monetary policy caused the great depression.

Differences between Chicago and Austrian school in regard to crisis of 2008:
Chicago: 4 factors: 1.FDIC; 2. No gold standard; 3. Automatic stabilizers; 4.FED determination; combined prevent depression. In short – drastic monetary expansion prevents depression. This view puts Chicago monetarists on the same side as Keynesians.
Austrians: monetary expansion is inevitably leads to structural imbalances and eventually to inflation. Government manipulations with statistics such as not counting discouraged workers as unemployed or playing with inflation calculation method does not make depression disappear.
Austrian Alternative: Posit restricted money supply to M1 as only one true money supply measure – AMS (Austrian Money Supply). Also puts high importance on interest rates, but does not provides method of dealing with imbalances.

Part II – Various essays
11. Murray Rothbard As Investment Advisor
This is the review of overall ability of economists to forecast market movements with a reasonable conclusion that this ability is quite low.

12. What every Investor Should Know About Austrian Economics and the Hard-Money Movement
Philosophy of Hard-Money movement – circumvent effects of government monetary interventions by adhering to hard money (gold and silver) in their investment analysis and decisions. This essay is detailed description of hard money approach to investment.

13. The Economist as Investment Advisor
Another shot at economist as investor. The idea is that economics does not provide for valid investment advice in details, but it allows predict high level trends caused by government interference. This provide for imperfect knowledge of future that conceivably could be converted to decent returns.

14. Keynes As a Speculator
Review of Keynes performance as investor – overall very successful, but far from perfect with significant losses in some years. It is also unclear how much of his success could be attributed to insider knowledge.

15. Who Predicted the 1929 Crash?
The answer is very few and mainly sound money supporters based on their estimate of 20s as inflationary spiral. Austrian school Mises and Hayek anticipated the crash, but could not be precise on timing.

16. Financial Economics
Another essay on market predictability with the same conclusion: it is not predictable at the detailed mathematical level, but quite predictable on the high qualitative level where Austrian economics operates. Unfortunately this level highly dependable on political events those in turn are not very predictable at all.

17. A Tale of Two Dollars
The tale of inflation told via fate of two dollars in 1960: one silver and another paper. After 50 years the difference for silver was 18/1 while for paper 0.1/1. However the interesting thing is not inflation per se, but rather silver price variation. The silver dollar of 1960 went up to $5 and down back to $1 that kind of indicates that history commodity based money is far from perfect. The new technology of gold / silver extraction or production could cause crash in value any time.

Part Ill. – Information sources
18. Austrian Economics: Newsletters, Books, and Services
The final couple pages are reference to websites and newsletters that specialize in investment advice base on Austrian school of economics.

My Take on It:

I am an admirer of Austrian school and its thinkers. I believe that it is the most realistic approach to economics especially comparative to other schools such as Marxists or Keynesian. The only quarrel I have with this school is it’s over appreciation of commodity based money such as gold and silver. I think that money is construction of human action consistent of two equally important parts: government violence and human trust between individuals represented by credit. I also think that a missing part in analysis of Austrian school is analysis of property rights not just as necessary and mainly benevolent foundation of sound economy, but rather as another human construction based on government violence. Without proper attention to violent components of human society economic analysis of Austrian school while valid and useful, does not provide tools necessary to improve economic performance of society.

As to contest between Efficient Market theory with its Random walk and Market predictability to extent of predictability of human action, I am with Austrians. I believe that market could be predicted, but only to very limited extent when some human actions clearly go beyond economic rationality.

As far as Marxism and Keynesianism, I think that Marx’s theory of total government control as effective economic organization proved to be false by history and explained very well why it is false within framework of Austrian economy. The same pretty much applies to Keynesianism that was explained as mainly false by Austrians and currently is in process of final historical confirmation of its falsehood.

The only thing I would add is that typical Keynesian analysis of aggregate supply and demand misses one important thing – it is that artificial government-created demand in reality means that individuals who produce something valuable that other people are willing to pay for are bound to receive less and less in real terms for their effort and on the long run (however not that long – well before we are all dead) would respond to this by decreasing level of their effort and consequently level of production of valuable good and services. The abundance of bureaucratic goods and services of 0 value could not be a good substitute for this loss.

20140405 Triple Package

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Main Idea:
The main idea is very simple: the prosperity for groups and individuals comes from combination of three factors: superiority complex, insecurity complex, and impulse control. All these three factors are combined in the “triple package” provide for very good explanation for high level of prosperity for some of minority groups in USA. At the same time lack or weakness of any of this factors makes individuals and group fail. It is also important that the high level of achievement is identified as somewhat limited to simple things like power, money, and other forms of worldly success. Another important point is that triple package made America what it is – the most prosperous and powerful nation in history, but it tend to decay overtime making next generations to lose important components: insecurity and impulse control creating lazy and stupid people with high self-esteem living on welfare.
Description of triple package with examples of successful minority groups that possess these qualities ispades: Mormons, Cuban Americans, Indian Americans, Nigerian Americans, and, most obviously, Jews. The dynamics of achievement is presented as follows: Superiority complex and Insecurity generate drive to achieve, and Impulse Control provides for ability to maintain continuous effort necessary for high level of achievement.
More detailed review of high achievement groups: Mormons, Cubans, West Indian and African immigrant groups, Asians, especially Chinese, Jews, and Iranian / Lebanese immigrants.
Review of sources of superiority complex for each of these groups: Jews and Mormons as chosen people, Cubans as former elite of Cuban society, Chinese and Iranians (Persians) as members of greatest ancient civilization. Conversely the group consistently pressured into accepting their inferiority – American blacks developed complex of inferiority that in many cases prevents them from achieving. African black immigrants who have none of this inferiority complex like Nigerians doing just great. Also provided are some results of psychological research and experimentation that demonstrate significant dependency of level of achievement on level of expectation and self-evaluation.

The second component – insecurity reviewed not only as applied to immigrants, but also as inherent trait of American culture that was created after all by very insecure immigrants from second sons of English nobility to religious decedents. It is more then obvious that such insecurity applied too and at the much higher level to immigrant groups with minority racial and religious background.
The impulse control review starts from classical “marshmallow experiment” to demonstrate scientific prove of value of self-control for success and then goes through detailed review of superior impulse control development methods of Chinese and Jewish families.
This chapter is something unusual for a book about sources of success. It reviews cost of the success. The live within triple package culture is not easy. In exchange for constant drive, hard work, and high achievement it brings not only power and money, but also high levels of stress, psychological and emotional problems, and, sometimes substance abuse in attempts to decrease pressure. There is also an interesting discussion about Chinese Confucian culture’s based pathologies with extreme forms of compliance to authority versus Jewish individualistic god-fighting culture’s based pathologies with extreme forms of challenge of authority.
This is a review of achievement or lack thereof of various groups with detailed look at underachievement of Appalachian white Protestants. It seems to be demonstrates that lack of one component of triple package causes failure to achieve. The missing component for Appalachians is the superiority complex. The American culture controlled mainly by coastal elites treat Appalachians as retarded hillbillies and by doing so instilled in them feeling of intellectual inferiority which prevents them from achieving success.
There is also interesting take on the most successful group – Jews. They are seems to be in process of loosing their insecurity in America. One of consequences of loosing this component is drastic decrease in academic performance of American Jews. This brings us to IQ question. Ashkenazy Jews have notoriously high IQ by all accounts. So dramatic decrease in insecurity accompanied by dramatic decrease in academic performance seems to be indicate that Triple Package is more important for success then pure IQ level. The fact is that individuals with lower IQ, but higher level of drive clearly outperform individuals with higher IQ and less drive.

The final chapter is dedicated to America that, as culture, was build on the Triple Package, but after a century of incredible success is loosing these qualities. One of the most important parts – insecurity is becoming less relevant. Moreover contemporary American culture of “everybody is a winner”, and artificial self-esteem movement, combined with welfare state nearly completely eliminates insecurity from American life.

Another important part – impulse control had never been the strongest suit of typical American. A very interesting idea is expressed that Declaration of Independence was typical expression of American rebellion and inadequate impulse control, while Constitution established a framework for impulse control through checks and balances of different branches of government.

The final recommendation of this book is to work on restoring and expanding Triple Package in American culture in order to assure continuing success and prosperity of this country.
My Take on It:
I find the theory of Triple Package being a good explanation for raise of different groups within society. However one thing more or less left outside of discussion is that only in capitalist society the raise and success experienced by different groups described here is possible. More important only in capitalist society like America this success is based on doing something that other people need, buy. This way it increases quality of life for everybody, including unsuccessful individuals and groups. In all other societies known to history success of any group typically achieved at the expense of other groups leading to stagnation of society overall.

As to regard to America’s loosing its Triple Package, I would not worry about it. Americans are always in the state of insecurity whether because of the rise of some other country (China now and USSR, Germany, Japan in the past) or threat from some ideological phenomenon (Islam now and Communism, Catholicism in the past).

I think this insecurity will not go away at least until the whole world will become something like idealized America – free, democratic, and capitalistic society, where individuals have opportunity to pursue happiness any way they want.

20140328 Time on the Cross

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Main Idea:
The main idea of this book is pretty simple: to use actual raw historical documentation to understand real condition of slavery in American South. Instead of emotional fiction written by people who really did not know what they are writing about, as was the case with majority northern abolitionists, the sources of the book are emotionless church records of births and deaths, accounting books of profits and losses from cotton or selling and buying slaves or doing any other activities. Important sources of information also were diaries of multiple individuals of what was a pretty literate society of South. These records where not created to convince anybody in anything or to create positive narrative for future historians. These were everyday records used to run business and trace events of live and therefore they are the best source to recreate what this society was really like.
While authors go out of their way to stress again and again that they are completely detest slavery and racism, the documents create much more complicated picture than one taught in American colleges and schools.


Prologue. Slavery and the Cliometric Revolution
The prolog is a short description of Cliometric method and its application to the history of South.

One. The International Context of U.S. Slavery
The review of slave trade brings some not exactly expected facts. One of the most interesting is that slave trade in America was very unevenly distributed along the continent. The number of slaves imported to US was just 6% of total, while Brazil had 36% and Caribbean 17%. However survival rate was so different that black population of United States continued to grow even after all slave trade stopped while population in Latin America was barely supported by continuing import. The share of foreign-born slaves in US went below 50% sometime in 1710s and by 1860s it was close to 0. The process of emancipation of slaves started in England when in 1772 Lord Chief Justice ruled slavery not supported by English law. It started nearly immediately in USA with Society of Friends in Philadelphia banning it for its members in 1772 and completely abolishing in 1865. The last country to abolish slavery in America was Brazil in 1888.

Two. Occupations and Markets
Unexpected data came from comparative analysis of professional activities of slaves versus total adult population. While majority of all adults were manual laborers as expected, % of artisans and semiskilled workers was pretty much the same between all adults and slaves. Even more unexpectedly was to find out that about 7 to 8% of slaves worked in managerial and professional positions. Obviously it was within constrains of plantation, but nevertheless it puts and interesting twist on racial attitude variation between white individuals who were familiar with individual slaves and whose who were not. The southerner exploiters of slave labor often knew and appreciated real capabilities of individuals and used their ability in the most effective way they could come up with, while northern abolitionists fought slavery on moral grounds while firmly believing in inhering inferiority of black people.
Another interesting fact is that slave trade did not play significant role in business amounting to less then 2% of slave population in any given time. According to documents it also contained disproportional number of young individuals and seldom included families either whole or broken. Studies of Maryland slave trade show that about a half of all sales was due to bankruptcy or from estate of deceased planters. I guess humans are not a very profitable if used as merchandise.
Also an analysis of migration patterns shows that slave migration usually occurred as part of planter’s movement to new land, rather then slaves movement via trade.

Three. Profits and Prospects
The analysis shows that slavery was profitable, but only in very complicated way related to human life cycles. Based on age/price variation the pick returns from slave labor was in the age 25-40 years, but in order to achieve it the investment in childbearing and upbringing was necessary before labor extracted from a slave would allow breakeven between cost of slave maintenance and returns on slave labor. Interestingly enough prices for old slaves did not fall to 0 until age of 70+ signifying that even at this age return from slave labor was profitable. The data also reject notion of slave breeding for sale. Analysis of prices for cotton and other products of plantation show that slavery was economically viable system. Moreover analysis of slave employed in cities as artisans often on their own making money and paying taxes to owner demonstrates that cities did not kill slavery, but rather provided additional venue for its use.

Four. The Anatomy of Exploitation
This is detailed review of documented information about live of slaves and level of satisfaction of their needs. It reviews food, shelter, medical services, family live, and also exploitation with punishment and rewards used to extract maximum returns. Not surprisingly it confirms notion of tangible advantages over hired unskilled hands in all these areas. More strikingly is to find out that life expectancy of slaves in USA was only slightly lower then free whites and at the same level as for population of France.

Five. The Origins of the Economic Indictment of Slavery
This chapter is not about slavery, but rather about slavery related writings and how attitude to the slavery created familiar narrative about slavery being economically inefficient system regardless of real facts on the ground.

Six. Paradoxes of Forced Labor
After review of myth creation, the detailed review of actual economic performance paints quite a different picture. This picture includes a set of data supporting a number of notions that authors considers as paradoxes:
1. Slavery based agriculture was more efficient then fee labor based agriculture
2. Quality of slave labor was much higher then it is commonly perceived
3. The black low level managers (drivers) and middle managers (overseers) were quite competent in their job, often more competent then white overseers hired from outside.
This chapter also provides an interesting discussion about economic significance of property rights in man. The proposed notion of difference between slave owning and free society as difference in who has title to human capital rather then who controls it. In free society the title on human being is not separated from this human being, while title on slave belongs to slave owner. Paradoxically it could mean that free man would rent out himself at a market price, which depends on supply and demand for labor that could lead to extremely low price at the level of minimal subsistence. Slave owner on other hand owns this particular individual slave as capital good with significant investment and therefore amount of resources allocated to slave’s subsistence could be significantly less depended on market fluctuations. Net result is higher level of subsistence available to a slave comparatively to free laborer.

Epilogue. Implications for Our Time
The epilog provides a short review of what happened next after emancipation. The picture was not a pretty one. The South economy significantly deteriorated for all population, but it was especially bad for former slaves. While getting title on themselves they did not get main source of subsistence – land. Without land they had to sell their labor and price for this labor went as low as it gets. Overall statistical information shows a drastic decrease in all measures of well being such as life expectancy for former slaves.

My Take on It:
Free man curries his own cost so his market price could be marginally lower then slave’s because slave owner carries cost of raising slave and has to include this investment costs in his calculation. Based on statistics collected and analyzed in this book the slave’s life was not significantly worse then life of free laborer in terms of food, shelter, housing, and, consequently, qualitative parameters such as life expectancy. However humans are not machines and they tend to put a very high value on self-control and self-direction. This value could not possibly be matched by improvement in material wellbeing because these are incomparable apples and oranges.

Too bad that vast majority of Americans especially young does not know details of slavery history provided in this book and mistakenly believes that slavery means materials deprivation. It makes them blind to real nature of promoters of big democratically elected government and welfare state. They fail to notice that such welfare state is slavery under other name because it would deny them options of self-control and self-direction the same options that slave owner denied to well fed and sheltered slave.

However I am very optimistic about future because we have overwhelming prove of inability of centralized welfare state to produce goods and services that people want and therefore being inferior to laissez-faire capitalist society.

Southern slaveholding capitalism was economically effective and therefore stable. Welfare state is not economically ineffective and therefore is unstable. In its most murderous communistic form it could last for a few generations by killing all opposing individuals. In its relatively benign social-democratic form it would not last beyond running of other people’s money.

20140321 Citizen’s share

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Main Idea:
The main idea of this book is simple: widely distributed property is necessary for existence of democratic state. The authors make case that moving from more or less equalized distribution of land as main productive asset at the time to highly unequal distribution of wealth and financial assets now jeopardizes continuing existence of democratic form of government and so the property should be democratized and redistributed much more equally then it is done now. The tool for such democratization of property is property sharing when employees own a significant share of company and get corresponding returns.
1. An American Vision
This chapter reviews founding father’s vision of America as land of property owning farmers self-sufficient in application of mainly their own labor to the land they own. In addition to founding father’s writing authors review Homestead Act as attempt to maintain this ideal of independent farmer. In the last part of this chapter they argue that substitution of land by corporation as main source of production make corporations a new land, subject to more equal distribution of property rights in this new land.
2. Examples
This is a set of examples of corporations that more or less widely distribute shares or profits to their employees. Examples include: Google, Procter & Gamble, Southwest Airlines and a bunch of smaller enterprises.
3. Citizen Shares in the United States
This is a review of current status of employees’ stock ownership with results of survey showing that 47% of American workers have some capital stake in their companies and/or profit sharing plan. The conclusion is that broad-based capitalism is pretty common in USA.
4. How it Evolved
This is a historical review of how such wide participation in corporate ownership developed. It starts with artisan small businesses as propertied class versus wage earners as propertyless class; goes through history of railroad ownership and than through the list of individual entrepreneurs and then corporate organizations that promoted broad-based capitalism as counter measure against class war between labor and capital.
5. Evidence
In this chapter authors report results of several studies of companies that use various forms of profit and property sharing. Overall results are positive in term of higher loyalty, higher level of involvement and effort, and better working conditions. Significant attention in studies was allocated to the problem of free riders – workers who, while receiving equal share, tend to minimize their input. As it could be expected, in such situations profit sharing increased social pressure on free riders making them to increase level of efforts.
6. The Road to Increasing Citizen’s Share
Authors see road to expansion of broad based capitalism in very typical for academician’s way – top down political pressure with National Goals and Objectives, government incentives and progressive taxation on capital gains. It also includes wide government supported program to educate population and businessmen in advantages of broad-based capitalism.
Here author restate their vision of Citizen’s Share and Broad-based capitalism as the way to assure political and economic success of United States.
My Take on It:
I agree with necessity of Broad-Based capitalism, as the only reliable way to achieve economic and political prosperity and even survival of American Society. However I have a problem with profit sharing and distributed ownership as main tools to achieve results. The problem of both these method is an absence of control over property for participating individuals except for top-level managers. These methods allow workers to get some share of return, but do not make them real owners of anything. By real owners I mean individuals who have both parts of ownership – title and control. Besides these methods leave outside everybody not employed in some business that would be more and more common even with advance of automated production of goods and services

My solution – to separate title (rights) to natural resources and actual control (decision-making) with rights being equal and marketable when users of more then average buying rights from users of less then average would make everybody equal owner of nature with owners of companies and capital being sole owners of their property. This way natural resources and related property rights are equally distributed, while human created resources belong to individuals who created them and / or to the most capable to combine human created and natural resources to produce goods and services in the most effective and efficient way as defined by market where such individual would be able pay more for use of natural resources then less efficient users.

20140313 Random Walk

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This is basically affirmation of week form of efficient market theory. In strong form theory states that all existing information is immediately incorporated into pricing of securities and therefore it is not possible to beat market. Based on empirical evidence collected over last couple centuries it does not sound as correct statement. The week form of the theory does not claim market perfection; it rather limits itself to claiming market unpredictability. Again based on empirical evidence and unaccountable numbers of individuals who lost money trying to predict market movements, it sounds like a pretty correct statement.

In addition to review of different approaches to securities market: castles in the air and bubbles; technicians and fundamentalists; risk / reward ratios; this books provide quite commonsensical advice on investment in securities market correlative with individual’s life cycle and objectives.
Investing is a necessary part of life for everybody who does not want to lose wealth to inflation at minimum or is capable to increase wealth at maximum. A very nice table is provided to illustrate this thesis by comparing prices in 1962 to prices in 2010 (average increase 10-15 times). Two types of investment theory reviewed – firm foundation which states that securities have intrinsic value based on fundamentals of underplaying businesses; and The Castle in the Air theory which states that all depends on perception of investors and securities prices moved by passions and human psychology.
This chapter dedicated to review of long history of investment bubbles confirming validity of the castle in the air approach. It starts with famous Tulip bubble 1633 – 1637 and ends with stock market bubble preceding great depression of 1922-1929

The bubbles review continues with review of New Issue / Growth stock craze of 1960s when in 3 years 1959-1962 more new issues were created then ever before. The next was Conglomerate boom of mid 60s when conglomeration of various companies allowed increase shares price / earnings evaluation by bringing up lower priced parts of conglomeration to the level of higher priced. After crash of conglomerates the next magic was created by “performance” this time representing mutual-fund investment into “concept” companies, which really did not produce anything real, but represented a great idea of something. The pick of this phase was achieved in 1968. The next was psychologically well-motivated return to “sound” investment in Nifty-Fifty big specialized companies such as IBM or McDonalds. As usual even with if these companies did produced real goods and services it was quite possible to pump enough money into them to go through High up / Low down bubble cycle. For example McDonalds P/E was 83 in 1972 and 9 in 1980.
From 1983 it were High-tech stocks going through IPOs especially in Biotechnology in the mod 80s and Internet in mid 90s. In between in was boom/bust cycle in Japanese Yen and Land.
This chapter starts with Internet crash that wiped out $8 trillions in market value quickly substituted by housing bubble that duly crashed in late 2000s. All this history of bubbles makes a great illustration of irrationality of market in the short run, while its efficiency on the long run. But the core lesson is that it is unpredictable at any given moment so if an investor reasonably shorts a crazy growing stock of company that is bound to crash, he still stands a good chance to loose money because it did not crash fast enough.

This part reviews more in details how professionals divided into two main groups –technicians and fundamentalists play the game.
Definitions and examples provided for technical analysts who do not care about companies’ business, but mainly about their securities movements trying to find pattern to predict future movements; and fundamentalists who are not that much concerned with charts of previous movements and patters, but trying to predict future movements based on parameters of company business and markets it is in. The experience shows that both methods do not work reliably so author comes up with quite reasonable rules:
1. Buy only companies that expected to have 5+ years of more then average growth.
2. Never pay more for the stock then its firm foundation of value
3. Looks for the stock with good stories so investors would build castle in the air for them.
It is the review of technical analysis that leads to conclusion that it basically useless.
The functional analysis fares a bit better but not that much. There are 5 different reasons why fundamental analysis mostly fails.

Overall conclusion for Part Two is that the best way is the middle of the road – analyze market trying to find the bigger fool, the guy who buy your stock when market going to crash and you getting out and sell you stock when market is at the bottom and about to go up. One does not need to know when exactly top a bottom going to happen. It is good enough to figure it out before the other guy.
This theory mathematically links risk level / direction and price of securities in such manner as to achieve optimum combination of risk and returns with stress on diversification.
This is a similar exercise with stress on risk control. Represented by Capital Assets Pricing Model (CAPM). This thing produce some Nobel prizes, but pretty much failed in reality.
This one is not really theory, but rather result of research of human behavior of identifying and formalizing all irrationalities that human action prone to. This chapter provides quite good list of specific behaviors to avoid.

This is a list of critics of efficient market theory. Funny, but can be easily refuted by stress of weakness of efficient market and real life data of professional investors dismal results.

The whole Part Four is detailed investment advice that could be very useful for novices.
I am pretty much in agreement with very weak form of efficient market. I would only add a lot more of behavior analysis and I definitely do not trust all mathematical models because of my education and lifetime experience in computer science. This experience tells me that level of simplification unavoidable in models could not possibly represent reality with enough precision necessary for effective investment.

20140307 Inventing Freedom

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Main Idea:
The freedom and democracy both, as ideas and as contemporary structure of government was developed by English speaking people of British Islands. From there it was brought out to the world through military and trade expansion. The freedom had deep roots in Anglo sphere, but has difficult time in other places including even continental Europe. This freedom, rule of law, and notion of private property created contemporary capitalism and consequently tremendous growth of prosperity. However this freedom had destroyed the existing equality of misery at the bottom of society. It also destroyed believes in god given and protected superiority of the top of society. Consequently equality before the law and property rights created huge inequality of results due to obvious inequality of abilities and luck. The resulting wave of envy and resentment against prosperous led to successful attacks against original culture of Anglosphere elsewhere in the world which currently is succeeding in undermining this culture even in the place of its origin.

Introduction: The Anglosphere Miracle
This is initial description of idea of Anglo sphere as cradle of freedom starting with comparison with culture in Peru where author come from originally.

1 The Same Language, the Same Hymns, the Same Idols 2 Anglo-Saxon Liberties
Review of common features of Anglo sphere: language, religion, and ideals with stress on origination from England.

2 Anglo-Saxon Liberties
History tour of where England came from starting with Romans, Anglo-Saxons, and up until Norman Conquest.

3 Rediscovering England
Story of Norman Conquest and interplay between Norman (French) aristocracy and original population resulting in development of parliament.

4 Liberty and Property
Unusual and highly interesting discovery that exceptional among people English did not have period of common ownership of land by community and extended families, but at least since earliest known sources had individual ownership of land. This exceptional way of live was enforced by primogeniture which maintained numbers of aristocracy limited and pushed second sons down into lower classes where they brought higher levels of literacy and culture, leaving first sons at the top to run undivided and therefore more powerful estates.

5 The First Anglosphere Civil War
This is the story of long war between kings and parliament with special attention to movement of levelers who are presented as first libertarians. Lots of details about the struggle which ended with creation of “Crowned Republic” contrary to outcome of similar war in Europe from France to Russia which mainly ended with defeat of parliaments and establishment of absolutism.

6 The Second Anglosphere Civil War
The American Revolution and war for independence are treated as the second Anglosphere civil war. The history of the war, as it is described, presents it not only as civil war between American Tories and Patriots, but actually as 100% British civil war with division between supporters and opponents of American cause going all the way across Atlantic with significant number if not majority of people in Britain supporting Americans up until France’s entry into the war turned it from British civil war into World war giving birth to the new political entity – United States of America.

7 Anglobalization
This is review if British colonial history with stress on mostly privately driven colonial expansion of Englishmen in search of wealth with a lot more trade deals and political alliances with local elites, than purely military conquests. The case is made that expansion was only supported, but not directed by government’s power. Another thesis is that this expansion was much more cultural and technological than human movement. Except for America there were no mass movement of people from England to India or other colonies around the world. The typical process was a minuscular colonial administration setting up governing structure with majority of officials coming from local population transplanting cultural and technological mores and making country part of Empire.

8 From Empire to Anglosphere
This describes the next step – conversion of from Empire to Anglosphere with colonies one after acquiring independence mainly without any significant military struggles.

9 Consider What Nation It Is Whereof Ye Are
This is an interesting take on contest between English tradition of territorial localization when, while possessing the same cultural background, people move power to as low local level as possible; and European, Asian, and all other imperial tradition of concentration of power at the top. It is very interesting and contemporary discussion concentrating on the staff the author knows best – EU versus independent European countries.

Conclusion: Anglo sphere Twilight?
There is clear concern here that tremendous improvement in human lives brought in by democratic culture and capitalism developed in Anglosphere is being destroyed by people like Barak Obama who rejected the cultural values and democracy of self-reliant, property owning, and independent people. Such people as Obama use freedom and democracy to undermine both. Their vision is the same mix of great leaders moving compliant masses to prosperous future using coercion and violence to any individual who fall out of step. They seem to be succeeding bringing down Anglosphere and its cultural values.

My Take on It:
I pretty much agree with historical review of development of contemporary democracy from English culture. I also share concern about its retreat before forces of demagoguery and big government. However I am much more optimistic due to the simple fact that these forces have one unavoidable feature which shows again and again in its full force as soon as they start winning. This feature is complete inability of big government and demagoguery to provide good life for anybody except thin layer of functionaries at the top. Unfortunately for them the ideas of god given ruler ran out of steam about 2 centuries ago while ideas of great all knowing supreme leader able to bring prosperity via coercion and violence that where tried extensively in XX century proved to be a spectacular failure. Therefore I believe that a current bunch of seemingly winning demagogues and clowns from Russia to America are nothing more than a small hiccup on the way to complete switch of humanity to the way of live developed in Anglosphere and based on property freedom, and limited democratic government.

20140228 Focus

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Author of Emotional Intelligence decided to look at Focus as in paying attention and Distractions. He does it in 7 steps:

1. The Anatomy of Attention. The baseline here is that attention is a limited resource and should be used sparely. This follows by analysis of bottom up and top down mind closely following Kahneman’s ideas about thinking fast and slow. Quite a bit of attention assigned to a centipede’s problem: if one starts thinking how he does something, he could not do it efficiently anymore. Very interesting and something unusual is deviation to appreciate value of the mind adrift. It seems to suggest that daydreaming has significant value producing unexpected solutions. Overall as everything else the balance is required to achieve success.

2. Self-Awareness. This step about awareness of one’s body, mind, and attempts to learn how to see self through the eyes of others. An interesting discussion about self-deception and groupthink. The recipe for self-control provided: control over attention will allow control over mind.

3. Reading others. This one goes back to part of EQ that emphasized empathy.

4. Attention in context of systems. This is pretty much about looking at the world as a system, including as much as possible of small pieces of information to create an adequate picture. An interesting example is Mau sailor capable to find way in the ocean using small patterns of environment. Here is a wonderful idea, which as trivial as impossible to implement – focus on the big system and future consequences. I guess it is an inherent failure of liberal intellectual’s mind – a weird believe that it is possible to understand big system in primitive terms. It comes with lack of real world experience of getting things done. Such experience teaches humility and understanding that we are lucky to get correctly a small part of the big system and achieve a baby step positive results. Academic experience of dealing with other human beings either teachers or students teaches arrogance of believing that one can easily understand big system either healthcare in USA or climate of earth and improve this big system with some crude and primitive tool like ObamaCare or forced decrease in using fossils.

5. 10000 hours and games as training for the brain. Here is an attempt to deny veracity of achieving perfection after 10k hours of deliberate exercise. I think that idea is true, but the problem is with deliberate part. It is not always possible to implement while just repetitive exercise would not do much good.

6. Use of control over attention as tool for control over people (leadership). Same as above – liberal minds need leaders, self-reliant individuals don’t.

7. Big picture of the last chapter turns out to be a primitive environmentalist’s rap about stupid people not understanding that good life today inevitably leaves future generations without resources. It seems to be does not matter that year after year and, actually century after century human ingenuity overcomes predictions of doomsayers and provides more and more resources to consume. The most disgusting however is this search for great leaders who would force stupid people to cut down on their consumption.

20140221 Life at the speed of Light

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Craig Venter is the first person to sequence human DNA and now he seems to be the first person to create artificial life from human designed DNA.

It is not a small achievement and it seems to be opening an infinite opportunities to use human designed organisms to meet whatever needs humans have.

The discussion starts with chemical synthesis as prove of understanding of biological issue. As soon as it is achieved, the next step is to develop digital model of life, which comes down to pretty much sequencing of DNA because all life is build with DNA. As soon as DNA sequence for new organism defined on computer as blueprint, the necessary sequence could be generated from base pairs.

Obviously as everything else in the world it is a lot simpler as idea on paper then actual implementation in reality with all real life complications, but it actually was done and we now on the brink of incredibly powerful technology that will give us power to add self-replicating and self-developing organism / machines to our existing non-organic technologies.

At the end Venter looks at possibility of biological teleportation which seems to becoming real possibility, but I would not bet on it just because I do not think it would be possible to get snapshot of living organism which is changing constantly and then send and reassembly it flawlessly. However all other possibilities are more then exciting.

20140214 Knowledge and Power

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True to the name this book is about knowledge and power. More precisely it is about what kind of knowledge leads to power and how it is done. The first came a theory. The knowledge comes from information as it is defined by original Shannon’s theory of information communication, which stated that information is not just flow of data, but rather new and unpredictable piece of data. The human mind combines new information in often-unexpected way and creates knowledge to allow humans to deal with real external world much more effectively then any other animal can.

It is kind of interesting how ideas of deeply religious Gilder mirror ideas of deeply atheistic Ayn Rand. Both are at awe of real world and both are accept that it exists outside of human mind and is not limited to simple material forces. However Gilder sees in it absolute necessity of superior being, while Ayn Rand just uses notion of human consciousness as additional factor missed by both materialists and spiritualists. I guess I am philosophically with Ayn Rand, but I am afraid there is no logical justification for this except that I brought up an atheist and therefore have default assumptions formed at early age. If I were brought up in religious home, I would probably prefer Gilder’s assumptions. However I do not agree with these guys that it is important. I think that as long as science is accepted as 3 steps process a-falsifiable theory, b-practice / experience / experiment, c- theory rejection / revaluation / expansion; everything is fine and philosophical ideas are not really relevant. The problem happens when actions are based on philosophy rather then science, especially when these are violent actions. Then we have lives destroyed and price to be paid for deviation from science.

The second part of the book is going through financial crisis with correct in my opinion evaluation that it was caused by government intervention. With usual conservative idea that there are superheroes – entrepreneurs who made life better and create wealth for all other bums who would not be able to survive without these superheroes. Obviously it is also relates quite closely to Ayn Rand’s ideas. I for one only partially agreed with these ideas because with all due respect these superheroes normally did not do it alone. Society and yes, government just have to assure such arrangements that “superheroes become recipients of wealth created by efforts of multiple individuals many of which are not less hard working, often a lot smarter, and generated produce more ideas. So I think we should find better arrangement so everybody could apply maximum of his or her abilities and obtain benefits of results. Meanwhile until we found such arrangement, existing capitalism with wealth sticking in hands of entrepreneurs beats the heck out well-known alternative of transferring wealth into hands of bureaucrats and politicians.

The final chapter unsurprisingly dedicated to the future which is going to be bright because entrepreneurs eventually win due to simple fact that only entrepreneurial capitalism proved to be able creating constant improvements in human lives and any repression of capitalism would lead to decrease in wealth and consequently quality of life. I could not agree more.

20140214 American Guns and history

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It is a nice little book about 10 guns that had impact on American history. They are:

1. American long rifle. This rifle was more of a hunting gun then fighting weapon. It was shooting farther and more accurately then military musket, but it was more difficult and time consuming to reload. As result in traditional pitched battle between two military forces it would produce inferior volume of fire. However if tactics change from mass movement of formations typical for battles since ancient Greeks to “pick up high value target, shoot, and run” – new tactic of American voluntary military of war for independence, it become a powerful tool with significant advantages. Not the least of which was ability to take our commanding officers, bringing British and German military formation into confusion and disarray. This weapon did not win the war, alliance with France did it, but it was instrumental in victory and formation of American culture of independent actions.

2. The Spencer repeater. This was one of the first weapons with magazine that significantly increased firepower. Author believes that it had a significant impact on Civil war victory.

3. Colt single action revolver. Another example of fast reloading weapon. Starting from 1844 it gave American decisive advantage in Indian wars against people armed with bows and arrows.

4. Winchester 1873 rifle. Well known as “gun that won west”. It was not a military, but rather civilian self-defense weapon. It was rifle of choice in after civil war fight between settlers and Indians that obliterated remnants of independent Indian tribes.

5. M1903 Springfield rifle. As many bolt rifles of early XX century it was made from pattern provided by the Mauser design. As a main American weapon of WWI it was not that different from rifles of other countries, but its place in American history is warranted by being the weapon of mass of conscripted American soldiers in WWI.

6. Colt .45 M1911 Pistol. This weapon is special for two reasons. First it was typical American tool of American soldier. The pistol in other armies of the world was weapon of an officer. In American army regular soldier carried it also. The second reason is its design. This gun was designed so well that it lasted for nearly a century.

7. Thompson submachine gun. This weapon was designed to be a trench warfare tool, but wind up as mainly civilian criminal gun for bank robbers. I guess its value is not so much military or historical, but rather as cultural amulet of American gangster. It looks great and makes a lot of noise – perfect for movies.

8. M1 Garand – the main American rifle of WWII. Being semiautomatic weapon it provided American soldiers with superior power against German troops armed with bolt-action rifles and submachine guns. As it is always with American weapons accuracy was pretty high.

9. .38 Special police revolver. This gun was for a long time weapon of American police and detectives. As with Thompson gun it had more of cultural then historical value.

10. Finally M16 – American high tech response to Soviet AK47. As it is typical in match between Western and Soviet weapons nearly at all levels from handguns to tanks and jets it has superior technology at high price put against cheap mass production of lower technological quality, but high reliability. The experience of Vietnam war was – a cheap AK47 that nearly any Vietnam soldier would have that would always work, but would not hit a target against expensive, light weight and accurate M16 which would not always work, especially if not taken enough care of. After some modification M16 won military contest, but AK47 won cultural contest in third war becoming a symbol of fight against civilization and found its place even on flags of a few terrorist organizations.

Overall it is an interesting professional angle on American history.

20140207 John Galt – The world of Ayn Rand and contemporary America

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The main idea of this book is to compare heroes of Ayn Rand books and real people in America of early XXI century. It turns out that there is a lot in common so the pairing goes like this:

Howard Roark – undefeatable architect of “Fountainhead” is paired with Steve Jobs founder of Apple.

Mad collectivist Ellsworth Toohey – evil enemy of Roark from the same book is paired with Paul Krugman – NYT columnist and consistent promoter of collectivism and left wing of Democratic Party in our reality.

John Galt – initiator of creative and productive individuals strike from “Atlas Shrugged” is paired with John Allison former CEO of BB&T bank who seems to become an effective promoter of libertarian ideas among young people.

Parasitic businessman James Taggart incapable to run his business effectively and living off the government support if paired with Angelo Mozilo former CEO of Countrywide – Mortgage Company that was using government to give out mortgages to individuals who could not possibly pay them back.

Henry Rearden – superman quality inventor and businessmen courted by John Gult paired with Bill Gates in his struggle against big government.

Wesley Mouch – the evil central planner and regulator who is destroying economy in “Atlas Shrugged” with Barney Frank who did the same in real life, thou somewhat less successful.

Farncisco d’Anoconia the rich man who inherited both wealth and many talents and used them to create prosperity is paired with T.J. Rodgers CEO of Cypress Semiconductor.

Robert Stadler a brilliant scientist in “Atlas Shrugged” who gives government powerful weapons is paired with Alan Greenspan – the libertarian who became top government financial regulator and was instrumental in creating real estate bubble.

Finally Hugh Akston a superior philosopher from “Atlas Shrugged” is paired with Milton Friedman – real life economist who did more then anybody else to promote libertarian ideas in economics.

Obviously comparing fiction with reality is not an easy task. Fictional heroes have no negatives and fictional villains have very few positives, while real people are a bit more complicated. The same applies to actions and their results. Actions are bold and results are obvious in fiction, while actions a subdued and cautious in real live and results are not obvious and subject to the spin. Nevertheless these comparisons are pretty good and quite consistent with real life results.

20140209 Israel Test

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The main idea of this book is that Israel being the one and only real democracy in the middle of Muslim word’s dictatorships and kingdoms needs and deserves full support of Western world. The effectiveness of this support is the real test of viability of Western democracies and their ability to meet challenge of savagery and theocracy and win.

The book goes through Bell Curve narrative of statistically superior intellectual abilities of Ashkenazy Jews notable only because of one interesting remark. It is that among enemies of Israel who are most effective in ideological attacks there is a disproportional number of individuals who are actually born Jewish. It is a cute note that Jews so good in all intellectual endeavors that they even succeed in Anti-Semitism.

I am not sure that western world will pass Israel test. The history gives plentiful examples of how western intellectuals not just supported, but initiated bouts of Anti-Semitism always harmful and sometimes murderous. I would not count on support and defense from anybody including United States, in which Jewish influence is on decline, leaving alone countries like France or Russia where Anti-Semitism always was a part of national identity. My hope is that contrary to all previous situations Jews have their own state and therefore access to resources to develop all technology they could come up with. This technology could make such a huge qualitative difference that numerical inferiority of Jew could become insignificant in any military contest even if it contest against whole world united in hate against Jews. Obviously it is limited to situation when such hate would not become suicidal. In case if it does become suicidal it could be a Samson option for humanity.

20140202 – Conversational Intelligence

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Ever since Daniel Goleman came up with “Emotional Intelligence” new and new forms of intelligence get discovered all the time. This time it is “Conversational Intelligence” – an ability to effectively communicate that separate unsuccessful people from successful in all areas of human activities from business to marriage.

This intelligence has 3 levels: Level 1 is just a communications necessary to transact business and share information; Level II – positional conversation when individuals state their position and try to influence positions of counterparts; Level III – the highest level when conversation turns into joint effort to shape reality according to mutually agreed form.

As help in achieving level III of conversations a mnemonic of STAR SKILLS is provided:
1. Build Rapport
2. Listen Actively
3. Ask smart questions
4. Dramatize message
5. Reinforce success

Also significant attention is allocated to emotional side of conversation. All this is supported by references to experiments using fMRI technology to analyze process of conversations.

The book is divided into tree chapters dedicated to 3 topics:
1. Why we need conversational intelligence?
2. How to raise you own conversational intelligence
3. Getting to the greatness in conversations
All this is supported by real life experiences and examples of improvement in conversational intelligence leading to success in achieving some business or personal goal.

I am not sure it could help anybody, but it is an interesting reading for communicationally challenged individuals like me.

20140126 Against Fairness

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The main idea of this book is valid, but it runs against great many things that we all get indoctrinated with from early childhood. It is not just restates such platitudes as that life is not fair, but it also states that it makes a lot of sense and that we wood be worse off if somehow it would be otherwise.

One of the most interesting points is that big and famous “humanists” like Gandhi are really inhumane because they often put some ideal of abstract humanism higher then real and concrete human beings they are dealing with. So somehow it becomes not only acceptable to hurt real humans in the name of great idea, but even necessary and justifiable to do so.

Luckily unfairness is so deep seated in us that it is more often then not overcomes abstract indoctrination and makes us to be unfair often without even recognizing it.

Here are some points made in this book:

Biological favoritism – the idea that some human being could be equally impartial to their own children and to children of strangers contradicts our real life experience, even if it is supported by many philosophers and ethicists. The book provides a nice tour on biological mechanics of why it is so. Obviously process of evolution would probably filter out individuals who have problem prioritizing limited resources they have by allocating these resources randomly instead based on genetic closeness.

Uniqueness of Western culture, which somehow overcame, at least to some extent, this biological favoritism and puts high value on equality before the low and kindness to strangers. Interesting point is made on artistic representation of reality. In Western culture at some point the correct perspective started to be used making various figures proportional so king would not be bigger in size then regular person. It seems to be correlated with development of capitalism and appearance of wealthy commoners.

After spending a bulk of book on interplay between western egalitarian culture, author goes through review of Chinese, Indian, and other non-western cultures.

The remaining part is most interesting by attempt to accommodate two contradictory forces: fairness with more good for most people and favoritism with helping keen first. The final result presented by thought experiment of utilitarian philosopher William Godwin when one have a choice of saving chambermaid who happens to be his mother and archbishop. Godwin insists that to save archbishop is more important because of his value for humanity. Stephen Asma insists on saving his mother. I completely agree with him and I even think that it is much more humane and even more reasonable from utilitarian point of few because utility of once mother is known to this person, while utility of archbishops for anybody is always questionable.

20140119 Seeing like a State

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The book is about case of State against people and nature. It starts with observation that state is somehow always against “people, who are moving around”. This analysis led to understanding that main functions of state: taxation, conscription, and prevention of rebellion are successful only if people are easily found, their wealth is easily assessed, and, most important they could be easily robbed.

From here comes the most common functions of the state – creation of identification system in the form of last names, standardization of measures, creation of cadastral surveys, and population registers. In short the state and its bureaucracy creates conditions necessary for population control by bureaucracy with consequent confiscation and concentration of resources to achieve whatever objectives bureaucracy wants to achieve.

The book reviews real life examples of state projects, philosophy behind them, and catastrophic results of violent implementation of different visions of bureaucracies in different countries and places.

The projects reviewed are:
• Forest management in Germany
• Artificial cities build from the scratch like in Brazil and/or existing cities modernized by bureaucracy like Paris by Napoleon III.
• Creation of surnames
• Implementation of standard national language
• Centralization and restructuring of traffic

The book is reviewing history and logic of authoritarian high modernist visions, which are nothing more then different forms of socialism developed in Europe and implemented to various degrees around the world. Two visions are analyzed in details one architectural – Le Corbusier and his “Radiant City”, and another one – political – Lenin and his new type of Revolutionary party.

Bulk of the book is dedicated to history of 3 sad examples of application of high modernist visions using bureaucratic power of state: Soviet Collectivization, Viligization in Tanzania, and modernization of agriculture in the third world. The disastrous character of the first two is well known. However agricultural change is not that easily defined and author admits that it led to dramatic increase in agricultural production, even if it was done not in the best possible way.

The somewhat unusual approach to all this consists in analysis of bureaucratic intervention as conflict between simplified view of the world developed and used by educated bureaucrat with little to none practical knowledge who lives and dies by getting resources from other people using coercion versus complicated and nuanced view of uneducated farmer who survives by constant experimentation and interaction with nature where resources are obtained from by accommodation and use of natural processes.

The main lesson here is that the more power bureaucracy has, the more damage it could cause by implementing its high modernist visions. In countries with powerful bureaucratic traditions this damage is in millions of human lives. In courtiers with relatively limited bureaucratic tradition and strong democratic traditions the damage come just as significant decrease in quality of lives for millions of people.

If only enough people were able to learn these lessons, the power of bureaucracy would be suppressed and the lives of these people would be significantly better.

20140112 The Fourth Great Awakening

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The main idea is that America throughout its history periodically undergoing a significant change via religious-political movements – Great Awakenings. These movements are based on interplay of two egalitarian principles that are foundation of American Culture – Equality of Condition and Equality of Opportunity. Robert Fogel identifies 4 such Great awakenings when one of these two principals was moving upfront pushing away another one only after achieving significant improvement in lives of Americans and then to be pushed aside by the next Great Awakening, which moves upfront another egalitarian principle.

Here are these four Great Awakenings:
The First Great Awakening religious phase started in late 1730s with theological movement to undermine position of church leaders by accusing them in corruption and calling on people to trust their own judgment and experience. The political ascendancy phase run from 1760s through 1790 and included revolutionary movement against British monarchy resulting in formation of new United States of America. The political coalition of evangelicals, deists, farmers, artisans, and slaveholders that brought in this development lasted until 1820 when it broke apart due to difference in economic and ideological interest of these diverse groups.

The Second Great Awakening began in 1800 overlapping the late part of the First Awakening and bringing new religious fever to mainly secular country. It featured new religious leaders who were seeking to achieve God’s kingdom on earth, defining it as the America’s mission. By 1840 it morphed into anti-slavery and anti-alcohol movements. The political phase that started in this period lasted until 1870 and included struggle for union and Civil war that lead to abolition of slavery. It ran out of steam by 1880s so Southern states partially reconstruct prewar political structure in form of segregation. However it established formal equality of all people of all races and at the far end it even won political war against alcohol by establishing prohibition, even if it was a pyrrhic victory.

The Third Awakening began in 1890 and featured labor conflict and struggle between traditional American culture of equal opportunity and religiosity against modernist, mainly secular, somewhat socialistic movement for equal outcomes. This movement pretty much won in 1930s when big government policies they advocated brought economy to great depression on the watch of progressive republicans which progressive democrats successfully used to decidedly win ideological war, at least for the next 50 years successfully establishing welfare state. This victory, as it always happens in America due to the culture of democracy, could not possibly be final and planted seeds of its own demise by consistently decreasing quality of life for majority of Americans.

The Fourth Great Awakening started in 1980s and initially included significant religious movement of evangelicals. However main thrust of the movement moved to reestablishment of American creed of self-reliance and opportunity at the expense of diminishing size of government and welfare state.

The book was written in 1990s so RF did not deal with counterattack of big government progressives which again successfully used failure of big government republicans to deal with crises caused by big government policies, but at least for now it look like this counterattack, by allowing massive expansion of big government among population that does not like big government, will end up in dramatic defeat for progressives. This defeat will open a huge opportunity for expansion of American free civil society at the expense of contraction of big bureaucratic government.

Overall despite of aging process inevitable for any politico-philosophical work Robert Fogel’s book is still very interesting and provides significant insights into American history and culture.

20130825 Evolving Self

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Csikszentmihalyi has a difficult name to remember and the great ideas to follow. He is a man who is famous for developing notion of FLOW – the condition of human being at the moment of submergence in meaningful activity, which is perfectly realigned with ability of this person to handle the activity, and provides immediate feedback on progress allowing on the spot correction. This realignment provides for feeling of achievement, happiness, and fulfillment that would be impossible if the activity’s demands were above person’s aptitude (failure leading to frustration) or below person’s aptitude (low level of challenge leading to boredom). The notion of flow was developed from experiments based on random checks of correlation between psychological condition and activity at the moment.

This book is going way beyond psychology into quite interesting review of human condition, history, and potential for future. I think it worth to check all 10 specific themes discussed in this book’s chapters. MC defines objective of this book as analysis of forces that shaped humanity, review of ways to free humanity from “the dead hand of the past”, and suggestion of how to improve quality of life and achieve “joyful involvement”. So here it goes:

The idea I am fully agreed upon with MC is that we are formed by evolution, future is unknown, incomprehensible, and subject to chaotic changes represented by butterfly effect. MC presents a very interesting idea that evolution is a buffer between deterministic forces and human actions. I think it is a great idea except that I would not limit it to humans only. We are animals and not only humans, but all complex animals define their future by their actions which in turn defined not only by biology, but also by patterns of behavior acquired from surrounding animals through process of socialization and skill acquisition whether this process happens to be in Harvard or in the herd of antelopes.

There is an interesting discussion about good and bad in human nature, but it is kind of beyond the point. Humans act trying to achieve whatever objective they have either it is successful hunt or building house. The result of actions in specific environment leads either to passing of some genes on to the next generation or not. The complex machinery of brain includes multiple semi-independent systems, which create representation of environment based on current sensory input, rules learned during socialization, and previous experience. This machinery is based on genes, but actually a lot less then car is based on blueprint, because genes get expressed or not depending on environment and timing of external signals. In short, human’s developed self that is always unique even if compared with self of another human with the same set of genes (twin).

In this regard a very interesting idea of MC is that animal without self needs reproduce only the information in its genes, while person with self will want to keep and spread information in his or her consciousness as well. MC believes that the fate of humanity depends on kind of self we are creating. Evolution is not guarantied human continuation and whether life exists or not depends on humans’ understanding of their place in the nature. I think in a little bit different venue. I see humans as part of nature and evolution as force not that much different from gravitation so we hardly have option to stop it. Actually whatever we’ll do is a part of nature and if we changing wild forest into the city this city is a part of nature not any less then ants colony. What I do agree with MC is that kind of self that we are developing has a huge implication for the kind of lives we are going to have.

The discussion presented here in regard to brain-mind mechanism is kind of difficult for me to comprehend because I do not see any difference between brain and mind. The congestion that we need conscious control over our mind because it is limited by evolution and has lots of imbedded biases is completely valid. However the idea that our educated in university and highly conscious reason is in any way deprived of biases seems to me completely ridiculous. Both gut feelings of unconscious and well-reasoned inferences of conscious include biases, misrepresentations and errors. There is one and only one method that works was discovered so far – science based on experiment and falsification of theories. This and only this invention gave us all technology that we have and gave us incredible opportunity to go through live without starving and fighting other people for survival. Actually we and other animals in possession of brain used this method from the very beginning as long as we’ve got brain via evolutionary process. As far as I am concern brain is just another organ, which give its processor valuable advantage in strive for survival – instant accommodation to constantly changed environment based on accumulated patterns of past events either obtained via experience or via communications with other animals. Since this organ is highly self-programmable it is obvious that this advantage is big enough to justify long period of growth and programming and high consumption of energy required by the brain. So, I guess my answer would be – nobody controls the brain, it just runs its program changing it on the fly as needed to accommodate to environment.

Veils of Maya expression come not from America, but from Hindu and means illusion. MC goes through discussion of multiple levels of illusions that populate our mind/brain. It created by our genes, our culture, our environment, and by self and he comes to conclusion that reality is eminently elusive. I could not agree more, but I do not think it matters. We had to understand and accept that our theories are always either completely wrong or ruefully incomplete. So what? The only thing that really count is that they are at least partially work and allow us predict future from weather tomorrow to behavior of new airplane before it took off. The problem is that we way too often refuse to accept our limitations trying to act based on reasonable theories that are simply speculation like changing behavior based on weather prediction for 100 years from now.

This part is about external obstacles humans encounter that come from interaction with other people. This is another level of evolutionary process when we deal with predators and parasites: two types who try to prosper at our expense – predators by taking all our resources and annihilating us in the process, while parasites just milking out some resources leaving us alive so we could continue to provide for them. MC provides quite interesting discussion along these lines about exploitation and power plays between humans. I would just look at the two examples: cannibals as predators who would kill and eat us and bureaucrats and politicians as parasites who live by sucking out our resources.

Next comes memes versus genes discussion. Meme being cultural equivalent of gene that carries unit of cultural information while gene carries a unit of biological information. The main idea here is that memes go through the same process of evolution as genes only much faster. I am completely agreed with it.

The main idea is that process of evolution is unstoppable and humanity needs to direct this process, rather then passively allow it to go its own way without control. MC states 7 rules of evolution build around energy consumption that do not make a lot of sense to me. The key difference is rule 3 where MC stated that each organism would try to take as much energy from environment as possible. I do not think this statement is supported by reality. I would rather state that each organism try to obtain as much energy as required by its internal structure in order to obtain state of satisfaction.

MC infers from this rule inevitability of self-destruction due to over consumption of energy, unless some more complex type of live externally limit this consumption for a less complex organism. So his solutions for preventing self-destruction by over consumption are: control of population and Eumemics – limiting reproduction of memes. I should say that MC deserves respect for not suggesting something like Chinese one child policy to control population and censorship to implement Eumemics, but he gets pretty close to it. What is obvious however is that he is looking for “collective” actions for resolution of these problems. Since I do not believe in existing of “collective” as thinking and acting entity, I think all this would be naturally resolved by voluntary individual actions.

The main idea is that FLOW is an evolutionary tool that make human much more evolutionary fit by increasing complexity of their behavior and providing innate rewards for correct behavior. I could not agree more.

Here MC is bringing notion of Trascender or T-person – the person whose psychic energy is joyfully invested in complex goals. It is a funny part of the book because MC provides examples of T-person and goes into some weird staff about “something in our mind that is more than the sum of the individual neurons that make up the brain”. Since I think that we all are just a bunch of connected neurons, this “something” makes no sense to me whatsoever. However it is fun to read anyway.

MC also allocates lots of space to creation and maintenance of images including self-images and collective images and this part actually does make a lot of sense.

In this part the discussion of history turns into discussion of “good society” MC goes through short analysis of French revolutionary ideals vs. American ideals and eventually comes to definition that “a good society is one that helps each individual develop his/her genetic potential to its fullest”. This is the statement I fully agree with. However MC’s extension to “ It must take into account differentiation and integration beyond the needs of individual human beings, and of humanity as whole. It has to be a system that recognizes the law of nature as well as laws of men”. Here is difference – I believe that as long as individual is taken care off, everything else will be fine even if “laws of men” are corrected. As to the law of nature, I have no idea how one could not comply with them. It is just not possible. What we need is just a better understanding of such laws and consequences that these laws cause in response to our action. We actually have a good tool for this – science, that is system of methods of processing information that allows limited correct predictions of the future conditions arrived to as consequence of action.

When I got to the final part of the book about creating “Fellowship of the Future” – that is informal community of individuals moving world to better future as MC understands it, I somewhat unexpectedly found that I pretty much agree with his tenets on which to base the work of such fellowship. Here they are:
a. You are part of everything around you: the air, the earth, and the sea; the past and the future
b. You shall not deny your uniqueness
c. You are responsible for your actions
d. You shall be more than what you are – the self is a creative construction.