Month: April 2010

I may have already said this, but I think the simplest, most useful definition of propaganda is the substitution of labels for dialogue. If you call someone stupid, or a right winger (or left winger), and think that constitutes a full argument, then you are engaging in polemical rhetoric, which for my purposes is a type of propaganda.

The intent is to create two groups: one which is “in”, and by extension one which includes everyone who does not assent to the labels. Political correctness, as an example, is not a doctrine which permits argument. You either accept the “facts” that judging others is always wrong, that minorities cannot ever be disparaged, and that whatever your friends are angry about is something you MUST be angry about too. If you don’t do this, you are one of “them”.

The purpose of integration propaganda is to make you smug, and the purpose of agitation propaganda is to make you angry and/or resentful.

In the former case, you are told that within your group resides all the goodwill, generosity, intelligence, and every other desirable trait imaginable. Those outside your group are therefore the converse of all of this: they are hateful, selfish, stupid and all the bad stuff.

In the latter case (and obviously the two are connected, but sometimes you want people to sit down and shut up, and sometimes you want them terrorizing people in the street), your task is to portray the “good people” as under attack by the hated others, and to use the energies of anger, self defense, and resentment at the UNFAIRNESS of it all to mobilize people into whatever pathway best suits you politically.

Thinking out loud again. It seems to me the only way you can get deflation is through hoarding. Even money kept in banks is invested, since they have to invest to stay in business. Of course, if they loan the money, and it is lost, then it is gone, too. You have, say, a house that has been built, and the workers and suppliers paid. You lose, there, the excess the bank expected to make, resulting in the loss of the bank. Yet, the excess was retained by those who were paid, so the money is still there.

But if you put money in a mattress, it is out of circulation. This causes a decrease in money, which causes a decrease in prices, which over time causes a decrease in inventories, and an eventual loss of jobs.

In trying to figure out the Depression, you have to figure out where the money went. There may be a simple answer to this. One obvious answer is that the high tax rates Roosevelt charged on investment income, and on income for the rich in general, caused them to in effect put the money in mattresses.

If you have money, though, you also get good deals in deflationary times, so it would be worth finding out who, if anyone, benefited from the Depression, other than the Statist Democrats. What wealth transfer happened, if it did? Perhaps one could argue that wealth was transferred, permanently, from the private sector to the government.

Imagine a table. I put something–say a Chinese teacup–on one side. On the other I put a dollar bill. Now, I have five possible operations: I can add a teacup, I can add a dollar, I can add a teacup AND a dollar, I can take the dollar off the table, and I can take the teacup off the table.

The first case is deflation. I can now buy MORE with the same money. Provided everyone has money, this is a good thing. [Edit: actually, increases in productivity through innovation enable the same thing. This is how wealth is actually generated. You buy more with the same amount of money. This is a work in progress, where I am thinking out loud, and I don’t always think out loud “smartly”, but over time I calibrate]

The second case is inflation. I can now buy the same thing, but at higher cost, than I could before. This is bad.

The third case is called “growth”, so that we carry on as before, but at higher prices. Practically, this never happens in conditions of technical innovation, making scenario one slightly more relevant.

The fourth and fifth cases are related. In Communism, of course, profit is banned. Soviet Russia, for example, made selling things for any amount of money beyond what it cost to produce them illegal.

[Edit: This is perhaps where deflation goes, too, in that if there is no money to chase existing goods, the goods also disappear; this is the problem of liquidity that did so much to cause the Great Depression].

Thus, we now produce, without selling. The correllary is number five, in which we stop producing, and the table is now empty. This is, in effect, how the famines that beset substantially all Communist regimes happened.

(edit: could one call Communism “deflationary”? Money, obviously, is out of circulation. Is it the role of money to foster liquidity? Is the primary value of money over direct barter not the speed and ease of movement? I think this is getting close to the case)

This is, in my view, not a bad heuristic. Still, maybe I will improve on it tomorrow.

Is money not worth what the market says it is, in a free market? If so, when money is “created” by a governnment, can this be anything but inflationary? Money was already there. It had a value, which meant that you could buy x, y and z with some quantity of it.

Bundles of freshly minted bills arrive in a bank. They are now more eager to make loans, since they now have more money. Since they are more willing to make loans, they offer discounts, which puts more money in circulation. Since people can get money more easily, they are willing to pay more for what they want, which in turn causes merchants to raise their prices.

How could this happen if money were never created? I don’t think it could.

I don’t think there is ever any advantage to the expansion of money supply. What we want to grow are goods and services, at the same prices. This is true wealth.

Who benefits from inflation? Bankers? If the economy is growing–which is normally, effectively, to say inflation is growing at x rate–if you can loan money at x+20%, then even though the value of the dollar is decreasing, your actual purchasing power is increasing faster than that.

The foregoing may or may not be right. I need to read more, and ponder more. This is at least a two cigar problem, once I have more data.

William James, in his excellent “Principles of Psychology”, discusses the work of Janet and others in hypnosis. A very interesting finding is that we seem to have multiple “selves”. For example, someone may have lost all feeling in their hands, and consciously feel nothing. Yet, you can touch the hand, and get it to write “I felt that.”

As James puts it: “It is . . . to no ‘automatism’ in the mechanical sense that such acts are due: a self presides over them, a split-off, limited,and buried, but yet a fully conscious self.”

We have, empirically–at least some of us–multiple, aware selves. I wonder, in this regard, if we have a TV self, and a normal self. Certainly, there is ample evidence for something called “state dependent learning”, in which, for example, a drunk can do things drunk they can’t when sober. One example I saw was of an alcoholic helicopter pilot who had, in effect, to relearn to fly when he gave up drinking.

If you look at the prominence of the TV in most homes, it is the altar. It is where we direct our attention, for hours of every day. How does it affect us? Do we acquire one type of sense of self while watching TV, which then disconnects when we move on?

How is it that pscyhologically normal people CHOOSE to watch the most grisly, macabre scenes for hours every day? Is it perhaps not the case that some part of them is NOT psychologically normal, and that this is not obvious since that deficiency is in some respect state dependent?

I think that is an interesting question.

I typed a long post this morning, and Microsoft, apparently, did a forced reboot without warning to process some updates, so I lost it all. I wasn’t upset, though. From past experiences of that sort, I know that whatever I follow up with will be better, or at least different, taking me into new territory.

And so it has happened. I locked down an idea that was inchoate, which will be in the following post.

Never copy yourself. Never look to what you have done and thought as a guide to what you should do and think in the future. If the principles guiding you then were solid, then moving forward you will recreate something very similar, but also in the process incorporate the possibility of unexpected innovation.

This is just me thinking out loud, but could we think of money, per se, as limited, but the potential wealth it can buy as unlimited, with “wealth” proper being necessarily the result of innovation? It is industrialization–mechanization and specialization of labor–that has brought us such an increase in our standard of living. Through inflation, clearly, the cost of a ham sandwich has gone from, say, a nickel 80 years ago to $2.50 or more (depending on where you eat). We say that wealth has been created in that period, but have we really done anything but revalue our money? Would we not be just as wealthy paying a nickel for that sandwich and feeling rich on $20,000 a year? Is our real wealth not due to more efficient allocation of labor and resources made possible by better technologies?

The truest measure of economic growth–and this is the point made by Henry Hazlitt, in his book “Economics in one lesson”–is how much we can buy with our money, not how much money we can make. We see Unions whining that wages are stagnant. This is a stupid complaint, since it is not wages but purchasing power that matters; and clearly, cheap labor in China and Mexico and elsewhere has enabled us to own much more than we otherwise would have been able to. They enable cheap TV’s, computers, digital appliances, and many other things. My cordless drill was made in China. Had it been made here, it would have likely cost twice as much. That money, once spent, would not then have been available for me to have several nice meals, and Home Depot would not have realized any profit had I not bought it at all.

On this reading Capitalism, per se, is not an engine for wealth creation, per se, but of innovation. Having innovated, it is merely the most efficient system for the translation of an idea into reality. It does not lay down unnecessary barriers, whereas all other systems do.

Actually, I looked up Gross Domestic Product, and it is just an aggregate of the prices charged for everything. Likewise, inflation is measured by the Consumer Price Index, which is just a list of items, where they look at changes in pricing.

How, I wonder, would you measure the rate of increase in CAPABILITIES? For example, there would be no way for the CPI to show that for the price of one type of old TV, you can now buy a flat screen TV. For the cost of one type of car, you can now get On-Star, or backing up cameras, and other features.

And how do you measure things that are NOT commodities? For example, cordless drills? What if one day you couldn’t afford it, and now you can? Prices on those sorts of things are constantly dropping, but we don’t see negative inflation.

I have my morning routine to take care of, but the larger point I am working towards is a more general examination of the Federal Reserve. Does it serve primarily as an agent of inflation? This is pretty out there speculation, and I may well back off that statement, but more research is needed on my part.

I have been working on a piece on Socialism. If you study history, you have empires, where people physically take other peoples stuff by force. They are followed, in the West, by Mercantilism, which is basically economic extortion, backed by military force. Crown favorites are given monopolies; subject populations are told what they can buy and sell, and to whom.

Capitalism plainly favors those with money, but as a system which sponsors and rewards innovation, capital can take the form of ideas, that cost nothing.

In what we might term the Robber Capitalist period, the government was used to prohibit strikes and organization by workers. This is contrary to the doctrine of free trade, which permits workers to create what amounts to a counter-corporation to balance the possibilty of collusive practice on the part of business owners.

But plainly, the balance was in favor of those with money.

Socialism inverts this, by favoring workers, at the expense of Capital. Since those with money are those who create things, and workers those who consume them, this system is very poor at wealth creation.

In the middle is what I call Liberalism, which has as its goal the maximum amount of freedom possible. Practically, of course, this means that some liberties have to be curtailed–such as the freedom to murder or commit other crimes–because their use constitutes an abuse of others.

In the realm of economic activity, it means contracts are enforced, violence is banned between all economic entities–especially between labor and capital, broadly understood–and trusts both of Capital and Labor are prohibited. Trusts are de facto power accumulation, and are thus anti-competitive, even though individual companies like AT&T might be innovative. Had AT&T not been broken up, one wonders if the internet would have evolved as it has. I don’t see how it could have. Much of what drove our bandwidth explosion was competition.

Always, the fear is that of accumulated power. In our Constitution, the Federal Goverment is balanced by the States. The executive is balanced by Congress and the Supreme Court. No one balances the Supreme Court, which is a problem. The right to gun ownership balances the prospective abuse of police power (only criminals have guns in Mexico, and many of the criminals are cops).

Any straying from this basic idea is Illiberal. Fascism is illiberal. Communism is illiberal. Mercantilism is Illiberal.

I wanted to find a word that encompassed all these realities. This might be it, and I might change my mind.

It is my increasing sense that as you get older, your name matters less. I don’t mean that identity ceases to be important, but that it is less necessary to view the world through a prism; rather, you can see it as it is, without comment.

Clearly, doing evil is bad, and being the victim of evil is often bad, but not necessarily. It can facilitate growth. Yet, in both cases, what is seen is motion, in a direction. If you can move in one direction, you can equally choose to move in another. Nothing is fixed.

So much of life is beyond our control. We can tell people the truth, and be ignored, or misunderstood. We can be ignorant, and think we are wise. The extent of what one can do, really do, is really quite small, which is why care should be taken in such areas–I have in mind here families and work–above all others.

Who are you, in the end, when a fall day transfixes you, and you disappear for a moment? I read an author once I respected greatly who set it as his goal to “die” daily–to lose his old name–and be reborn every morning. I’ve always liked that, even if I have fallen far, far short of practicing it.

The simplest means by which to differentiate propaganda and dialogue is to ask this question: are you discussing ideas? This is dialogue.

Propaganda is the process by which all purported interactions take the form of discussing people, or the discussion itself. For example, reducing debate to labelling (You are a right-winger, therefore I have nothing left to say to you). This is absolutely the rejection of debate and dialogue. It is proclaiming a unbridgeable chasm between that person and someone else thereby identified as an ideological “Other”, and hence eligible for hatred and derision, regardless of the content of their speech.

Alternatively, you often see the discussion of the discussion. Can you make general claims about black people? Mexicans? Leftists? Can you say “leftists usually are. . .”?

Self evidently, in their concern about “essentializing the Other”, Leftists will fall all over themselves to reject such discussion. Except when the topic is right wingers or Christians. Then it’s all good.

These sorts of blatant, repeated, Grand Canyon-esque (all intellectuals need to work -esque into things; I’m told it makes you look smart) gaps of logic characterize propaganda, which is really nothing but the substitution of mutable emotion for mutable reason.

Go to any message board and watch the discussion. You will see conservative propaganda, too, but in general most of the name-calling and “discussion of the discussion” (DoD) will come from one side of the aisle, and one side only.