True Authority, Pandemics, Memento Mori, & Feminism (14m) – Episode 311

Episode 311 has Skyler giving his commentary on the following topics: where true authority and leadership comes from and why politicians don’t have it; the arbitrary classification of pandemics; how Stoicism prepares us for illness; the feminist creative energy and markets; and more.

Listen to Episode 311 (14m, mp3, 64kbps)

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Market Needs Freedom to Flourish

The world’s economy is being damaged by this pandemic, or, more accurately, it’s being damaged by government reactions to the pandemic.

The damage is adding up; getting worse with time. The only questions are: How bad is the damage going to be? And how long will it take to recover?

I don’t know the answers; no one does.

The economy will show scars of this time for years to come. Maybe forever. There are businesses that were forcibly closed and are never coming back. Whole sectors of the economy may die off from the damage. Sure, deadwood and weak branches were pruned away by the event, but there are some previously healthy limbs being torn off as well.

The authoritarian shut-down was just more than some businesses could survive.

The shutdown may turn out to be an economic extinction event, like an asteroid wiping out the dinosaurs, and, if so, there will be lots of vacant economic niches waiting to be filled. Perhaps they are waiting for you to fill them.

So it’s not all bad news.

The automobile may have killed off the buggy-whip market, but look at all the new markets it created. We wouldn’t have rear-view mirror pine tree air fresheners and thousands of other products if cars hadn’t reshaped the market.

Things change. We will recover. We will be different; stronger.

Some economic barriers have fallen away during this pandemic. Mostly bureaucratic nonsense like licensing and such — one example is letting doctors practice across state lines.

Government may try to put the barriers up again when this is over. Don’t let them. Anything that gets in the way during a pandemic also gets in the way during normal times, although it may not be as obvious.

Use your new knowledge to oppose those barriers being restored and notice other barriers that should be removed.

Those who can adapt will do better than those who can’t. Some people may be surprised to discover whether or not they are good at adapting.

There are always opportunities around you. Learn to spot them, and find ways to act on them.

This is something I’m not especially good at — my hope is that you are better at it than I am and that I can learn to do better.

The market will prevail if allowed to flourish in freedom. Only political parasites would try to hold it back. Watch carefully to see which side those with political power choose.

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Technocracy is Evil and Inhumane

The instant, simultaneous, total state takeover of the “civilized” world revealed how dire our situation is.

The battle of this generation is liberty against technocratic control; living, organic order vs. dead, clean chaos.

 

Order is natural, emergent, dynamic, unpredictable, useful, creative, and meaningful. It can’t be wholly contained, but it can be harnessed, guided, played with, adjusted to, and discovered in a continual dance. It is moving into the future. It is an infinite, positive-sum game.

Chaos is stripped down, unnatural, incapable of growth or change, dead or decaying, empty, and devoid of depth. Once natural order is made wholly legible and containable, it has been killed. Life and control are anathema. Chaos is the result of attempting total control. It freezes the present and reverts to stagnate snapshots of the past. It is a finite, zero-sum game.

Chaos is not the result of freedom or the state of nature, order is. Chaos is the result of efforts to defy the freedom of the state of nature. Chaos results when liberty and life are stripped from the world and all that remains are sanitized elements easily countable, reducible, and containable.

Architect and philosopher Christopher Alexander made a life’s work of studying the concept of “aliveness” in footpaths, windowsills, buildings, neighborhoods, and natural and designed systems of all kinds. His books offer many side-by-side photos of homes or other scenes, and ask the reader to, on a gut level, decide which is more “alive”. Every single person agrees easily and quickly. We know the more living from the more dead when we see it, but understanding why is difficult. Alexander made great progress. Living systems are in harmony with natural human tendency. For example, humans are phototropic. We also like to sit after more than a few minutes. So a chair placed near a window harmonizes with these subconscious patterns, while a chair facing a windowless wall does not.

Social architects (who dwell in brutalist buildings that suck all life from the ground where they stand) do not observe and contemplate life. They calculate and scheme control. They want legible, definable utility, based on static definitions and stale answers without questions. They kill the human spirit the way a giant parking lot kills the view.

The Great Sanitizer

The state and the obsessive, maladjusted, soul-dead busybodies who pull its levers are always seeking to remove impurity and unpredictability from the world. That is the same as removing life itself. This is what Ayn Rand meant when she called collectivist, command and control philosophies “anti-life”. That is the essence of what they are. To control is to kill.

The state wants to aggregate, categorize, sort, label, and track. James Scott describes in his several works the driving force of the state to make all persons and property “legible”. If they cannot be defined into conceptual submission and measured until all surprise is extinguished, how can they be controlled? So states set about to kill the creative, generative forces that make life worth living.

C.S. Lewis, in the final installment of his sci-fi space trilogy, That Hideous Strength, describes a scientific institution (called N.I.C.E.) with aims at global domination. The reason isn’t a lust for power per se, but a desire to make the world clean, free of germs and dirt and bugs and unpredictability, and all the shifting variables which make complete legibility impossible. In other words, they want to snuff out that pesky thing fueled by liberty that we call life.

Stranger Than Stories

These ideas used to seem a bit much to me.

Sure, some people are control freaks. Yeah, religious devotion to science is a contradiction to all reason and sometimes gets nasty. Yes, unspeakably awful ideas like eugenics have been a major part of every government in modern history (much as they might now deny it), but total rule by technicians whose greatest foe is unpredictability? Isn’t that the stuff of bad Bond villains?

No.

It is the outlook I see as the greatest present threat to all that is good and true and just and humane.

Total global lockdown – the literal imprisonment of entire populations without even the pretense of wrongdoing by the state’s own absurd and shifting standards – and introduction and embrace of oxymoronic phrases like, “Social distancing” came about not out of fear of some feigned foreign enemy or revolt against some unpopular dictator. They came about in an instant solely because the idea of planned chaos (to quote Ludwig von Mises) has so overcome the notion of spontaneous order.

Devotion to the fiction that men with guns and laws and stolen money can control microscopic pathogens we barely understand animated the acquiescence to complete boot-licking servitude. Anything – anything! – but unpredictable organic nature in all it’s life-giving danger and beauty. We must collectively pretend we can eradicate uncertainty, all physical and spiritual casualties be damned.

When Science Died

The oxymorons in the air are rooted in a deeper one.

“Belief in science”.

That’s a phrase people have been unironically uttering with increased frequency for at least a few decades.

“I believe in science” is a contradiction in concepts. It is meaningless, used only to signal superiority by unthinking people who are scared of unknowns.

Belief means to assume the truth of something and act on that assumption without fail. Science means to assume the fallibility of everything and never stop trying to prove it false. I would like to be charitable and say that people simply mean this in a tongue-in-cheek way, to say they are religiously devoted to questioning everything.

Except the complete opposite is true everywhere you see “belief in science” trotted out, or true skeptics called “deniers of science”. The scientific process is nothing if it is not a perpetual threat to the consensus view. Yet the word has come to mean nothing more than blind defense of the consensus view. Scientism is antithetical to science.

Similarly, those who question mainstream ideas (not merely ideas, but the violent imposition of those ideas) are called “believers”, and those who crouch and lick the hand that whips them are called “skeptics”. If Orwell never seemed relevant before, he surely does now.

A History of Inhumanity

Those with rabid, hateful, desperate, lurching faith in state agents to neatly destroy organic order and replace it with clean chaos are naive about the power of the state to do harm. Even granting stupidly charitable assumptions about the state’s goals being good to begin with, bureaucracies being capable of carrying them out perfectly, and no unintended consequences resulting, there is no instance in the history of the organized crime that calls itself government where states did not venture far beyond what the public knew or desired.

Did you know every single state in the United States had forced sterilization programs at one point? Health departments with an explicit goal of reducing the population of blacks, handicapped persons, poor people, and other “undesirable” individuals surreptitiously injected people to prevent them from procreating. The last state to finally end the practice was North Carolina, and it didn’t end until the 1980s.

Citizens are aghast at the atrocities of Stalin, Mao, and Hitler. We would’ve resisted such horrors! Except most of the time we don’t know they’re happening. Because we trust the scientific central planners.

Liberty is Life

We don’t understand reality.

Hayek famously said the “curious task of economics is to demonstrate to men how little they really know about what they imagine they can design”.

Not just economics. The task of every thinking person is to discover the limits of our knowledge. To replace answers with questions, arrogance with curiosity, intellectual death with life.

One of the greatest casualties in rule by diktat is experimentation and discovery. We don’t know anything about the human body, virology, epidemiology, or any of the other specialized fields of human health. The absurdity of assuming one small body can accurately surmise and prescribe a single path for all people in all places and times is beyond the pale.

Millions of messy experiments. People with dramatically different risk tolerances, trying dramatically different approaches. Sharing their feedback. Profiting from effectiveness, losing from error. This dynamic churn is the source of all progress. To decree a single plan backed by the threat of murder (as every single government law is) is to destroy humanity’s best hope of flourishing.

Julian Simon famously shot down the doomsdayers who fear human life and liberty above all (excepting of course their own) by winning a bet about the availability of resources as population expands. But his bet was a gimmick compared to the profound insight of his masterful book, The Ultimate Resource. Simon points out that individual humans, free to explore and try and fail and succeed and compete, are the source of progress not only for the human race, but the entire natural world.

We are relentless problem solvers. But we do it in messy ways not fun to watch and even harder to catalog in textbooks. We teach and learn through experience and consequences. We progress when we do the most outlandish things all the smart people thought were pointless. Our glories and triumphs are utterly illegible. Historians and bureaucrats have no choice but to guess, fudge, lie, and misinform, because to accurately chart the true path and nature of progress is impossible.

We don’t know what ingredients matter most or what will work best. That is precisely why we need the free and open contest of liberty to discover it.

It is the same with ideas. John Milton said it is best to let truth and falsehood grapple, because truth is the stronger in the long run. The sycophantic obeisance by every major media outlet and online platform to moronic political power-seekers is the opposite of this dynamic discovery process. Labels and warnings about “fake news”, removing ideas that deviate from those spouted by humanity’s lowest lifeforms (politicians and bureaucrats), and propping up “official” ideas are bad for curiosity, bad for liberty, bad for progress, and bad for life.

The Renegades

Historian Thaddeus Russell (driven from academia by the mindless literatti) documents how the least reputable people tend to expand human freedom, and thereby progress, opportunity, happiness, and meaning. I don’t think you have to be a deviant or a scoundrel in order to enhance liberty, but I do think those who resist the drive for a sanitized world will be labelled as such, and those already labelled as such are less likely to cave to prestige and pressure.

The cold dead hand of Communism could no longer control Poland, not because respectable ideologues educated enough people on the virtues of freedom, but because the illegal underground market became bigger than the respectable above ground one.

Humanity needs gray markets, black markets, shady people, fringey people, all kinds of people running all kinds of experiments. Ideas bumping into ideas and exploding into new ideas. Bad ones. Good ones. Easy ones. Hard ones. Dangerous ones. Safe ones.

Unpredictability, unknowability, dynamism, the organic nature of emergent phenomena, entrepreneurship at the edges, opposition to expert consensus – that is human liberty. That is life.

We don’t need more experts. We don’t need more controls. We don’t need to eradicate variability. We need gritty, dirty, messy, imperfect, unpredictable, wild, untamed, dangerous, beautiful human freedom.

Fuck the cold metallic gloved dead hand of human chess playing technocratic ghouls who want to squelch and contain and document and track and sterilize it to death.

The man who knows freedom will find a way to be free.

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Well Done, Billionaires

I ran into a neighbor on the street the other day and we chatted about life at home during COVID-19 and how we are all coping with social distancing. I mentioned how grateful I am that our nearby Whole Foods market seems well-stocked (except for toilet paper).

She made a comment about how billionaires like Jeff Bezos, founder and CEO of Amazon, which also owns Whole Foods, should really be less greedy and share their wealth. (She didn’t know that Bezos has donated $100 million to US food banks during the pandemic, but charity is beside the point.)

The dominant narrative that billionaires are greedy and big companies like Amazon are monopolistic, exploitative tyrants is not only misguided but deeply troubling for the future of prosperity and human progress. This rhetoric is nothing new. Successful businesspeople have long been smeared as robber barons who take and take, detracting from the “common good.” But this rhetoric and these smear campaigns fail to recognize just how much these billionaires give. And I don’t mean give in terms of charity.

They give by doing, by building, by creating, by inventing. They give by making products or offering services that people want to buy at a price they want to pay in pursuit of things they want to do, and employing thousands of people who choose to work for a wage they choose to accept.

They give by creating value for people, free of force and in an open marketplace of voluntary exchange. In the case of Amazon and Bezos, it got big and he got wealthy by building a superior product that millions of people freely choose to use because they can get goods they want at lower prices and faster speeds, freeing up their precious time and resources to devote to their own personal pursuits.

Amazon is a marvel of modern enterprise, and is one of the few companies keeping our emaciated economy from completely collapsing during this public health shutdown. Instead of disdain, the people who built these companies deserve our respect and appreciation. They are the builders and the creators, the thinkers and the doers. Former Google CEO Eric Schmidt reinforced this point recently in a virtual presentation to the Economic Club of New York. He said:

Think about what your life would be like in America without Amazon, for example. The benefit of these corporations — which we love to malign — in terms of the ability to communicate … the ability to get information, is profound — and I hope people will remember that when this thing is finally over. So let’s be a little bit grateful that these companies got the capital, did the investment, built the tools that we’re using now and have really helped us out. Imagine having the same reality of this pandemic without these tools.

Yes, imagine. In her classic book, Atlas Shrugged, Ayn Rand did just that, showing what life would be like if we mistake success for greed, achievement for exploitation, and progress for oppression. Billionaires, like Bezos, who have built great companies contribute daily to the “common good”—not only through charity, but through human ingenuity and the progress and prosperity that produces for all of us. During this pandemic, Audible, an Amazon company, is offering hundreds of its children’s audiobooks, and many of its adult books as well, for free. Atlas Shrugged is one of them.

We can, and should, balk at attempts to corrupt the process of voluntary exchange when business and government become entangled. That isn’t capitalism, it’s cronyism and it poisons the promise of free markets.

Economist Dan Mitchell describes the difference as being pro-market or pro-business, with the former acting as a champion of free enterprise and trade while the latter relies on government handouts and business buffers in the form of subsidies and bailouts.

Government officials trying to woo Amazon with subsidies and preferential treatment to build additional headquarters in a particular city is an obvious example of being pro-business at the expense of a dynamic free market.

Entrepreneurs like Jeff Bezos assume enormous risk and invest significant time, energy, and resources into inventing products and services that people want and need. They spot an opportunity to create value for others, and build a business around that idea using their own originality and will. If they succeed in creating something that others value, they will be rewarded financially; but even Jeff Bezos isn’t as rich as you think. Most billionaire wealth is inextricably linked to the companies they built, continuing to generate value for others, continuing to give.

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On Feminism

When I think of feminine energy, I think creation. Like birth, Spring, and newness, feminity is this and many other things. As such, markets are feminine, because markets are the result of the latticework of creative actions. A good or service comes into existence either physically or conceptually, and then exchanged with others in the attempt to gain more than is lossed, ie. the creation of wealth. Politics, on the other hand, is a destructive endeavor, quite anti-feminine. It seems to me that true feminism would embrace and promote markets and market action over politics, but it’s a rare feminist who doesn’t agitate for Big Daddy Government to come to their rescue. Ironic. And that’s today’s two cents.

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From Telework to Flexible Wages?

Lately I’ve been stunned by reports of nominal wage cuts.  They aren’t just in the news; several professionals that I personally know have received such cuts.  Employers routinely cut total pay during recessions by slashing bonuses and hours.  Even in good times, many employers cut real wages by freezing pay despite inflation.  Yet outright reductions of nominal base pay – hourly wages for hourly workers, base salary for salaried workers – have been exceeding rare for as long as we’ve had data.  Economists have debated whether downward nominal wage cuts are bad, but virtually all economists agree that downward nominal wage cuts are rare.

What on Earth is going on in today’s labor market?

The simplest explanation is that the current recession is terrible.  Quite right; maybe it’s twice as terrible as the Great Recession.  But last time around, I heard zero first-hand reports of nominal wage cuts, and near-zero such stories in the news.  I can understand a doubling of incidents, but not this.

Another tempting tale: Workers today realize that they must take pay cuts or lose their jobs.  Alas, this trade-off is on the table during every recession.  And in every prior recession, falls in nominal base pay have stayed very rare.  What then is really afoot?

Let’s begin with a primordial fact: The best explanation for nominal wage rigidity is psychological. When employers cut workers’ nominal base pay, workers feel robbed and resentful.   This hurts morale, which hurts productivity, which hurts profits.  In contrast, when employers start doing layoffs, the fearful remaining workers respond by working harder.   Logically, of course, there’s no reason for workers to feel more robbed and resentful about a 1% nominal cut in the face of 0% inflation than a 0% raise in the face of 1% inflation.  Human beings, however, are not so logical.

Why then are nominal pay cuts suddenly on the table?  You could say, “Workers have suddenly become more logical,” but as far as I can tell, they’re crazier than ever.  But psychologically speaking, there is one radical and unprecedented change in the emotional experience of labor in the time of coronavirus: the explosion of telework.  Until recently, only 3% of workers teleworked, and a large majority of these teleworkers probably dropped by the office at least every week or two.  Now the telework share has plausibly multiplied tenfold, and our former offices are all but abandoned.

Loneliness is only the most obvious psychological effect.  Teleworkers have also lost most of their opportunities to complain and hear complaints, to feel bitterness and sow bitterness, to feel aggrieved and seek revenge.  As a result, I speculate, the effect of nominal wage cuts on morale has never been lower.

When an employer cuts the pay of a face-to-face work team, the workers constantly remind each other of the perceived affront.  They work down the hall from the executive they hold responsible for the pay cuts.  They see which fellow workers are standing up for themselves, and who’s kowtowing to The Man.  That’s how the classic mechanism – wage cuts –> bad morale –> low productivity –> reduced profits – worked.  Now, in contrast, teleworkers are stuck at home with their families.  They’re juggling childcare, housework, and safety in a chaotic situation.  As a result, they have neither the energy nor the forum to kvetch – verbally or otherwise – with coworkers.  Today’s teleworkers talk to their peers to get the job done, then get back to business.  Supervisors who cut your pay now feel more like a tiresome video than a human villain, which quells the urge to settle the score.

Think about it this way: If your firm cut pay three months ago, what would have happened?  You would have arrived at work and started griping to your friends.  A few would philosophically adjust to the new normal, but a coterie of complainers would have whined, muttered, grumped, and sputtered for months.  In so whining, muttering, grumping, and sputtering, they would have disrupted not only their own work, but teamwork itself.

If your firm cut pay today, in contrast, you’d probably just read the email, groan, and resume your duties.  You might lament your fate to your partner or close friend.  Yet now that you’re teleworking, you plausibly won’t even mention the issue to a single coworker.  You almost certainly won’t lunch with coworkers to denounce the firm’s callousness and greed.  Stripped of this social feedback loop, neither morale nor productivity will fall much.  At long last, pay cuts finally do exactly what firms desire: mitigate losses by cutting costs.

On top of all this, executives and managers almost surely feel much less guilty about pay cuts than they ordinarily would.  Out of sight, out of conscience.

How can we test my story?  Most obviously, industries that switch to telework will be much more likely to impose nominal cuts.  To repeat, that means lower nominal base pay for salaried employees, and lower nominal wages for hourly employees.  In industries where some categories of workers switch to telework and others don’t, I also predict that the switching categories will be more likely to experience cuts.  (There, however, horizontal equity norms may get in the way.  If 95% of a firm’s employees telework, management might cheaply avoid outrage by also cutting pay for the 5% who work on-site).

Note: You don’t have to think that wage cuts are socially desirable to buy my story.  For a tenured GMU professor such as myself, nominal wage cuts are all pain, no gain.  That said, thirteen years after the Great Recession started, I remain convinced that nominal wage cuts are a greatly underrated way to alleviate the grave evil of unemployment.  Nominal wage cuts don’t merely save jobs within the firm; they also save jobs throughout the economy.  Keynes opposed wage cuts, but good Keynesians smile upon them.

Think of it this way: Suppose you have $1M total to pay workers.  Which is better for Aggregate Demand: Retaining your whole workforce and cutting pay 10% – or keeping wages constant and laying off 10% of your employees?  The latter route, though timeworn, reduces workers’ spending because the marginal propensity to consume falls with income – and reduces firm’s profitability in the process.

Does this make me optimistic about the economy?  Hardly.  We’re already in the midst of a second Great Depression, and even perfect nominal wage flexibility won’t restore normalcy anytime soon.  Still, when word of nominal wage cuts reaches my ears, I feel a glimmer of hope.  Unemployment will skyrocket.  Without nominal pay cuts, however, unemployment would have been worst yet.  Unemployment will take years to subside.  Without nominal pay cuts, however, unemployment would have lingered longer still.  As I wrote a decade ago:

Is labor market rigidity a market failure?  I’m afraid so.  But strangely enough, this market failure is largely caused by anti-market bias!  The main reason workers hate wage cuts is that they imagine that wage-cutting employers are satanically “unfair.”  If workers saw wage cuts for what they are – a full-employment mechanism – they’d sing a different tune.  While they wouldn’t be happy to see their wages cut, they’d grudgingly accept that a little wage variability is a fair price to pay for near-total employment security.  Once this economically enlightened perspective took hold, employers would eagerly cater to it – and the market failure would largely go away.

According to Peter Pan, “Everytime a child says ‘I don’t believe in fairies,’ there’s a little fairy somewhere that falls down dead.”  As far as I know, he’s wrong about fairies.  But if Peter had warned, “Everytime a person says, ‘I don’t believe in markets,’ there’s a worker somewhere that loses his job,” he wouldn’t have been far from the truth.  Scoff if you must!  People can and do cause market failure by believing in it.

Teleworkers still don’t believe in markets, but at least they’re less likely to tell each other, “I don’t believe in markets” – or act on their resentment.  Thank goodness for small miracles.

P.S. Disclaimer: The best predictor of future data is past data- and we should never say, “This time it’s different” lightly.  So I wouldn’t be shocked if aggregate data ultimately revealed continued severe nominal wage rigidity despite my current impressions of drastic change.  If so, consider this piece an imaginative yet regrettable attempt to explain “facts” that barely happened…

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