When Academics Describe the World

I always gets a kick out of academics confidently describing the world based on their models and research, especially when the world right outside their window works nothing like what they are sure must be happening based on their theorizing.

I’m all for theorizing.  Big ideas require reflection.  But the best theorizing happens in a loop, taking in the real world, reflecting on it, putting the resulting theories to test back in the real world, reflecting again, etc.

In economics, theorists will tell you “public goods” like lighthouses can’t ever be supplied by private, profit-seeking ventures.  Meanwhile, right outside their window there are private lighthouses, provided in ways too varied and ingenious for the academic mind to comprehend, and too skin-in-the-game trial-and-error intuitive for the entrepreneur to even know how to explicitly describe.

So you have the self-interested tinkerers doing the impossible without being able to describe it, and the sheltered academic calling things impossible without being able to try them.  The Royal Society confidently declared that years of peer reviewed research proved what a couple of bike mechanics did at Kitty Hawk was not possible.  They didn’t publish any papers, they just flew the damn plane and changed the world beyond the small dreams of academics.

A far less dramatic example I recently encountered gave me a laugh too.  A professor told me that the best way for candidates to stand out on the job market, given the ubiquity of college degrees, is by their GPA.  It seemed to him a sensible and efficient way of beefing up the flabby and dying signal of a degree.  In the real world of hiring, no one cares about GPA.  No one wants to see it on a resume.  In fact, listing it has a greater chance of being a negative signal than positive.

I’ve also been following a debate in the bitcoin community about an academic paper on the probability of profit from “selfish mining”, basically a way to cheat the bitcoin system and, for all intents and purposes, ruin it.  I don’t pretend to know the higher math involved, nor do I claim to know the actual probability of this threat.  Still, I find it amusing the amount of confidence about what is mathematically possible that ignores what real rational actors in the market actually do.

It has a similar flavor to those old silly Hobbesian claims (often portrayed in unimaginative Hollywood films) that, absent Leviathan, everyone would immediately kill each other, or that all power disparities will result in total annihilation of the weaker.  Those who see the world this way claim to be taking account of man’s high level of self-interest, but in reality they don’t see the world at all, and are completely underestimating just how self-interested humans really are.

It seems the lack of academic imagination stems from lack of seeing the world around them, the way Watson failed to see what Sherlock did.  Those who can see are rarely the ones able to describe what they see or write books about it.  Instead, they act on it with innovation and value creation.  In a free market anyway, profit goes to the visionaries, even if they’re unable to describe what it is they see.  Then everyone else spends decades debating the proper description of the world created by the innovators.

Let them debate.  Go create.

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The Two Types of Socio-Economic Problems

Socio-economic problems take two forms: one form is fake; the other is real.

The fake problems are bandied about by special interests, chief among which is the government itself, in a quest to acquire greater power and wealth at your expense. Obviously, in a just and sensible world, the government should never undertake to solve fake problems. Its doing so is at best wasteful, at worst destructive.

The real problems themselves take two forms: one form is attended by calls for the government to “do something” to solve the problem; the other form is not attended by such calls. This latter form is, in our time, quite rare, the prevailing assumption being that the government should involve itself in solving any and all real problems, even minor, mostly contrived, and trivial ones.

If the problem is real and the government undertakes to solve it, the result in nearly every case will be that special interests, especially the government itself, will be further empowered and enriched and, on top of this insult to justice and prosperity, the real problem will be made worse rather than solved, setting in motion further calls for government intervention and creating an endless chain of action and reaction leading toward a leviathan state.

So, regardless of the nature of the perceived problem, the default preference of those who cherish their freedom and seek to retain the wealth they have legitimately acquired is that the government do nothing. Cases in which this default option is not optimal are probably too few to merit much consideration.

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New Year’s, Leviathan, Free Will, & Schooling (33m) – Editor’s Break 044

Editor’s Break 044 has Skyler giving his commentary on the following topics: New Year’s 2018 and making resolutions to improve your life all year long, the unrelenting presence and growth of government, ie. Leviathan, holding parents responsible for the actions of their children and the existence of free will, how important it is to stop sending your kids to government schools, and more.

Listen to Editor’s Break 044 (33m, mp3, 64kbps)

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There is No Slowing Down Leviathan

Come over here and sit down for a second conservatives, political libertarians, alt-right people, libertarian universalists, alt-lite people, and many others. You need to come to terms with something …

You’ve lost.

There is no changing the values of the culture. There is no rolling back government. There is no slowing down the leviathan. The culture and the state are gone, and there is no recovering it.

Your feeble attempts to save the culture and the state are built on a misunderstanding of the cause of the problem in the first place. We live in a world created by public schooling, dependency, government manipulation of markets, government manipulation of currency, government usurpation of communities, government destruction of familial ties, and government manipulation of society in general. There is no good pottery to be made with this clay. This clay goes in the trash and you move on. You give up.

The people of 50 years ago didn’t suffer from such horrible incentives and they made the problems vastly worse. To believe that today, after suffering from vastly worse incentives, that people will just cobble things back together seems utterly delusional. You’ve lost, and it is time to accept that.

The only hope you have is not in going back in time, fighting degenerates, or getting your guy in office. The hope lies in the collapse of the culture and political system and for it to be replaced with nothing. In the remnants, people create what communities they desire to create and the market conditions that best fit their sensibilities in a decentralized world.

Maybe this vision of a decentralized world is delusional … but I think it is vastly more reasonable than believing that the government will shrink itself, the left will change its mind, dependent corporations will opt to be productive, old people will get rid of their government welfare, and banks will decide to give up their power.

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Knowledge Better Left Unknown

They say that a little knowledge is a dangerous thing. About certain things, however, any knowledge at all is dangerous and potentially fatal. One such piece of purported knowledge pertains to the size distribution of income and wealth. This knowledge serves no good purpose; it is wholly unnecessary for defensible government policy or action. It serves only as fuel for economic misunderstanding and demagoguery. It feeds envy and provokes public mischief. If such knowledge were completely unknown, no decent project would be harmed, and a multitude of destructive policies and actions would be rendered more difficult to initiate or carry out.

A lesser but still important problem is that all such purported information is subject to high degrees of conceptual and measurement error, as even a moment’s reflection makes plain and a careful study of the matter amply confirms. Yet people bandy about alleged facts about the distribution of income and wealth as if such data were as precise and reliable as measurements of human height and weight.

(For much more extensive discussions of this subject, see my collection Against Leviathan (2004), especially chapters 1, 3, and 16.)

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The Learner Precedes the Teacher

Logically and historically, society precedes the state.  That’s from one of my favorite thinkers, John Hasnas.

This simple fact calls into question some of our deepest assumptions about the social order.  It smashes the Hobbesian notion that man outside the state suffers a brutal existence, and only Leviathan can bring order to the chaos.  It casts doubt on the idea that, absent the state, civilized life is not possible.  Indeed, the relationship is the complete reverse.

My good friend Chris Nelson offered a modified version of this statement yesterday: logically and historically, the learner precedes the teacher.

Consider the things everyone assumes must be taught, often forcibly and formally, by a teacher.  Reading, writing, and arithmetic are the most common.  If, absent the authority, expertise, method, and compulsion of a teacher, no one would ever learn these things, how did they become known at all?  Unless the myths of gods coming down to teach humans are literally true (even then, who taught the gods?), people had to first be learners before they could be teachers.  The act of learning must have preceded that of teaching.

This presents problems for our assumptions about education.  Learning does not require teachers.  In fact, the opposite is true.

This does not make teaching worthless.  But it does reveal the direction of the dependency, which helps us put teaching in its proper place: as a response to an individual desire to learn in that specific way.  The learner comes first.  Their desire to learn a fact or method or subject is – must be – the first mover in order for genuine education to occur.  If that desire prompts them to seek formal or informal teachers, the teaching is valuable.  If teaching is imposed on unwilling learners, it’s the opposite of valuable.  It does violence to education.

The economist Eugen von Bohm-Bawerk described the capital structure of the economy and the prices of goods with the theory of imputation.  The value of a higher order production good is determined by the value of the end product to the consumer.  A bulldozer or factory floor’s value doesn’t come first, and then determine the price of the widgets at the end of the process.  (A good way to go out of business is to build something and then price it based entirely on what it cost to produce).  The value of those tools of production is imputed backwards through the production chain by the price customers are willing to pay for the end product.  If your widget is worth little or nothing to a customer, then no matter how cool your production tools, they won’t be valuable either.

It is usually assumed that knowledge flows from teachers to learners.  As explained above, this is not always the case.  In those instances where it is – where learners voluntarily seek teachers to satisfy their desire for knowledge – education is similar to the structure of production in the economy.  The value of a teacher – or a process, method, or credential – is imputed from the value to the learner, freely shopping around to choose the method of learning that helps them best.  If they don’t willingly choose the classroom or the teacher, the classroom and the teacher are not educationally valuable.

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