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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.