Playing Chess with the Market

I just talked to an entrepreneur friend of mine and he had a great phrase for what building a company is like.

Playing chess with the market.

I love this because building a business isn’t so much about right and wrong, luck or skill. The outcome is determined by a series of moves made in response to another player whose mind you can never read. There are causal chains, but they’re all theoretical. They assume certain actions by the other player that may or may not happen. In fact, it’s like a never ending series of chess matches against a rotating cast of random opponents, where moves that worked the first five times stop working the next, and patterns you learned change.

This framing reveals how hard it is and makes the challenge exciting. It also depersonalizes it a bit. Of course you won’t get every move right or win every game. But you try to learn each time. Treating it like a game is a huge cognitive relief.

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On Business

Just as companies accept their employees labor in exchange for money, they also accept their customers money in exchange for goods and services cooperatively produced by their employees. Companies do not and may not take their customers money. We must never forget these salient facts. Companies accept, they do not take. Conversely, governments do precisely the opposite: they take our money in the form of taxation, and they take our labor in the form of conscription. (They also take our property in whole or in part in many other ways.) It breaks my heart that my fellow human beings can be so bamboozled into believing that the institutions who plunder and pilfer them must be used (and has their best interests in mind) to save them from the institutions who do not. It’s tragic, and that’s today’s two cents.

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On Wages

It’s a common cry across social and popular media to deride one business or another for the way they model their wage structure. Most of my current income is earned by delivering food for companies like DoorDash and GrubHub. I do pretty well, but I’ve also spent a year and half learning how to do pretty well in my particular market. When these companies offer deliveries for amounts and distances below my professional standard, I simply reject them. What I don’t do is write articles decrying “predatory pay models” or other such signaling buzz words. It’s nonsense, and this is why: businesses do not and may not take our labor. Rather, they accept our labor in exchange for their money. We do the job at the wage agreed upon up-front, we get paid (at least) that amount. If we don’t agree, we don’t do it. If someone else does, good for them. If they can’t find anyone to agree, they increase the offer until they do, or cancel it. So long as it’s accepted willingly, everyone benefits. Third party opinions about it are totally irrelevant. If these companies are no longer profitable for you in your market, find a new company. Nobody’s forcing you to work for them. And that’s today’s two cents.

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Black America Before LBJ: How the Welfare State Inadvertently Helped Ruin Black Communities

“We waged a war on poverty and poverty won.”

The dust has settled and the evidence is in: The 1960s Great Society and War on Poverty programs of President Lyndon Baines Johnson (LBJ) have been a colossal and giant failure. One might make the argument that social welfare programs are the moral path for a modern government. They cannot, however, make the argument that these are in any way effective at alleviating poverty.

In fact, there is evidence that such aggressive programs might make generational poverty worse. While the notion of a “culture of dependence” is a bit of a cliché in conservative circles, there is evidence that this is indeed the case – that, consciously or not, the welfare state creates a culture where people receive benefits rather than seeking gainful employment or business ownership.

This is not a moral or even a value judgment against the people engaged in such a culture. Again, the claim is not that people “choose to be on welfare,” but simply that social welfare programs incentivize poverty, which has an impact on communities that has nothing to do with individual intent.

We are now over 50 years into the development of the Great Society and the War on Poverty. It is time to take stock in these programs from an objective and evidence-based perspective. When one does that, it is not only clear that the programs have been a failure, but also that they have disproportionately impacted the black community in the United States. The current state of dysfunction in the black community (astronomically high crime rates, very low rates of home ownership and single motherhood as the norm) are not the natural state of the black community in the United States, but closely tied to the role that social welfare programs play. Or as Dr. Thomas Sowell stated:

“If we wanted to be serious about evidence, we might compare where blacks stood a hundred years after the end of slavery with where they stood after 30 years of the liberal welfare state. In other words, we could compare hard evidence on “the legacy of slavery” with hard evidence on the legacy of liberals.”

Here’s a peek into how black America has been a victim of LBJ’s Great Society and War on Poverty.

Continue reading Black America Before LBJ: How the Welfare State Inadvertently Helped Ruin Black Communities at Ammo.com.

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Trump versus Iran: Power Doesn’t Just Corrupt, it Deludes

On January 8, US president Donald Trump addressed the American public concerning a casualty-free Iranian missile attack on US bases in Iraq, where just last week Iranian general Qasem Soleimani was killed in a US drone strike.

If the speech was remarkable in any way, it was for the comparative restraint Trump displayed: Rather than pledging another round of tit-for-tat, he announced new sanctions on Iran, vowed that “as long as I’m president of the United States, Iran will never be allowed to have a nuclear weapon,” called on NATO to “become much more involved in the Middle East process,” and rambled aimlessly about the “Iran nuclear deal” that his administration abrogated in 2018.

What was unremarkable — and unfortunate — in the speech was the obvious assumption underlying it: That the United States enjoys, and SHOULD enjoy, absolute power in international relations.

Trump is hardly unique in publicly stating, or in operating on, that assumption. The claim of such absolute power has been the tacit US doctrine of foreign relations since at least as far back as the end of World War Two.

America emerged from that war as the world’s sole nuclear power and, unlike other combatant countries, with its wealth virtually unscathed and its industrial capacity increased rather than demolished. Its rulers saw themselves as able, and entitled, to dictate terms to almost everyone, on almost everything.

“Power tends to corrupt,” wrote Lord Acton, “and absolute power corrupts absolutely.”

Acton was referring to individuals (“great men are almost always bad men”), but his observation is just as true of institutions. And above and beyond corruption, absolute power creates delusion.

The post-war “consensus” on American power around the world began to fray almost immediately.

The Soviet Union acquired “the bomb” and settled in for half a century of dominating eastern Europe.

The US found itself fought to a draw in Korea and defeated in Vietnam when it tried to throw its newfound weight around.

Even after the collapse of the Soviet bloc, the US learned that Michael Ledeen’s re-formulation of the doctrine — “every ten years or so, the United States needs to pick up some small crappy little country and throw it against the wall, just to show the world we mean business” — tends toward big price tags and negative returns.

Yet the delusion persists. It substitutes hubris for humility, sacrificing the blood and treasure of Americans and foreigners alike on the altar of a false god and in pursuit of an imaginary paradise.

The foreign policy recommended by Thomas Jefferson in his first inaugural address —  “peace, commerce, and honest friendship with all nations, entangling alliances with none” — was, and remains, the common-sense alternative to the nonsensical assumption of absolute American power.

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Iraq: America’s Other “Longest War”

As the calendar prepares to flip from 2019 to 2020, protesters stormed the US embassy in Baghdad.  As I write this, the action — a response to US airstrikes in Iraq and Syria which killed at least 25 and wounded more than 50 — hasn’t yet become a reprise of the Iran hostage crisis of 40 years ago, but it’s eerily reminiscent.

Although few Americans seem to notice, Iraq is arguably the second-longest war in US history.

Mainstream media often refer to the 18-year US occupation of Afghanistan as “America’s longest war.” That claim is wrong on its face.

Setting aside a century of “Indian wars” and two decades of involvement in Vietnam prior to the 1965 escalation, the Korean War handily takes the “longest war” prize:  It began in 1950 and has merely been in ceasefire status, with occasional flare-ups and no final settlement, since 1953. If wars were people, the Korean War would be collecting Social Security.

The US war in Iraq is approaching its 28th birthday, also with no end in sight.

It began in January of 1991 with Operation Desert Storm (“the liberation of Kuwait” from Iraqi occupation). The 12 years between that “mother of all battles” and the 2003 US invasion were punctuated by US bombings to facilitate a Kurdish secession movement in the north,  protect persecuted Shiites in the south, and provide convenient distractions from assorted Clinton administration peccadilloes.

Following the short, sharp conventional fighting phase of the invasion, the war remained a very hot conflict — a combination of civil war and anti-occupation insurgency — for years following US president George W. Bush’s “mission accomplished” announcement in May of 2003.

A brief cooling period accompanied Barack Obama’s 2009 inauguration, but by 2014 American troops (and “civilian contractors,” i.e mercenaries) were once again arriving to intervene in the new regime’s fight against the Islamic State of Iraq and Syria (ISIS).

The airstrikes which sparked the current protests were carried out in response to a rocket attack on a regime military base in which one of the aforementioned American mercenaries was killed.

The bigger picture:

The US government is using Iraq as a staging area for its ongoing actions in Syria and against Iran (which it blames for this specific rocket attack and for its backing of militias in Iraq in general).

US president Donald Trump talks a good “let’s get out of all these stupid wars” game. But in actuality he has increased, and continues to increase, the size of US military deployments to, and the tempo of US military operations in, the Middle East and Central Asia.

Several thousand US troops remain in Iraq and the war looks likely to stretch into a fourth decade.

There is, of course, an alternative: Trump could put his money where his mouth is and begin withdrawing US troops from the region instead of continuing to pour American blood and treasure into a series of conflicts which should never have happened in the first place.

Peace on Earth? Maybe not. But the US going home and minding its own business would be a good start.

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