Canada Reports: The Bank of 'Mom and Dad'

Originally a Facebook post - apologies for short catchy phrasing. 

Sometimes I'm awfuly harsh about Leftists - often in very polemic ways. I'm not very concerned with inequality or class systems - that's not my prime motivation. But for anyone who IS, however, I beg you to hear me out on this one.

Our Central Planning Board (=Central Banks) choose very low Interest rates little over a decade ago. This fueled a MAJOR Asset price boom, creating a major divide between haves and have-nots. People owning shares predominantly the wealthies) and people owning their homes (=middle class and above) suddenly had assets worth 2x, 5x, 10x their initial purchasing price. = a massive increase in wealth over a very short time period.

In 2008, after perverse U.S governmental incentives and GSEs, combined with collectivisation of mortage-debt spread across the financial world, the party was over - rapidly reduced demand for loans, the value of properties dropped and companies whose Income Statements were doped by too-low interest rates, and Balance Sheets heavy with debt went out of business.

What did Central Planners do? If your only tool is a hammer, every problem tends to look like a nail; so, they lowered interest rates AGAIN + printing trillions of dollars to effectively create negative interest rates, hoping that price indexes would skyrocket - some of that new money did put pressure on prices, but most of it went to properties and shares. Again, property prices bounced; share prices reach all-time-high even though the economies of US, Canada and western Europe are not much better than 5 years ago. Again, the haves are benefited while the have-nots can't afford neither house, nor savings, because their wages (=productivity) didn't increase because the government printed more money.

So the older middle-class generation, now safely and comfortably retired in debt-free high-priced dwellings pass on some of their assets to their children, so that they can get even a humble home for themselves. Again, have-nots don't have that luxury, and instead have to rent low-quality homes in neighbourhoods they don't like.
"Chances are being inherited", McLaren says; the younger generation's spending powers are artificially propped-up by the older ones who were lucky or insightful enough to be on the Boom to begin with. Now they're all tied to housing prices with new loans, and it's way harder for have-nots to get on the property ladder than 15 years ago.

""And don’t even contemplate a housing crash. If that happens, we’ll all be screwed.", McLaren finishes. Indeed. But Central Banks would rather repeat the cycle than let the inflated prices crash down to reasonable levels.

======= Interest Rates must up to prevent repeat of last 15 years. But Central Banks won't raise them, because majority of population are addictively dependent on them for their mere day-to-day survival. So interest rates will stay down, creating the same Asset Price Booms we've seen, forging the divide between haves and have-nots.

My point is: Seeing as how Central Banks and Governments over the last 15 years made a mess of asset markets, disproportionally harming the poorest in society, increasing the wedge between haves and have-nots, all of it being done to help the poorest to more employment - SHOULDN'T YOU ALL LEFTIST AND INEQUALITY-PEOPLE BE ON MY SIDE?!

Climate Change - The confession of a Watermelon

This post should be seen as a call for reason within the Climate Activism movement. 

The other day, thousands of people around the world marched for the Climate. In UK, over the last year, what has been in focus for is the Divestment Campaign, calling for funds and Universities to divest their holding of fossil fuel stocks.

I have essentially two objections to this; minimal impact of campaign (thus the rising opportunity costs of doing it) and the lack of influence over dictatorial State-run oil companies. Note, this is not a discussion over climate change, over exact impact of fossil fuel-usage, temporal effects of damaged or the causation problem in arguing a "Stop Climate Change" reasoning. This is simply an observation to how the suggested means relate to the alleged ends.

But first, let me make a confession; I used to be a watermelon too. I see the temptation in these campaigns and I can follow the Kantian approach of "If it's wrong, don't do it". Also, the argument posed heavily by the people over at 350.org is pretty convincing:
"If it's wrong to wreck the planet, it's wrong to profit from that wreckage".

Problem here, though, is twofold. The first part involves a two-step "very-low-chance-of-success". That is, first you need to get all Universities and pension funds aboard - which has a very low chance of happening - secondly, the impact of the entire thing should you pass the first obstacle, is very limited. In order to show this, I grabbed some numbers from ShareAction, a similar organisation calling for pension funds to divest.

On its own account, the ShareAction campaign claims that the UK private pension system has more than £3 trillion worth of assets. Let's exaggerate and use £4 trillion to be on the safe side, also including some private savings and University Endowments etc. (£4trillion is about 1,5x the British Economy, by the way, so adding another trillion is not just a rounding error..).

Let's also assume ratios of fossil fuel exposure to rest of portfolio at between 2-5%, as seen below (from the Oxford Stranded Assets Report).

5% of £4 Trillion = £200 bn. 

The total Market Capitalization of the Big Five oil companies (Chevron, Exxon, BP, Shell, Total) is around £730 bn. If using this number, again, numbers will come out on the side of overestimating the effect Pension Funds have, because there are quite a few additional fossil fuel companies - but I'm using these companies as a proxy for the entire industry, thus benevolently exaggerating the effect the campaign might have: £200bn/£730bn = 27%. Interestingly, the share prices of these companies have had differences between top and bottom price over the last few years larger than 30%.

That is the entire chunk of fossil fuel investments (all British University Endowment, Pension funds etc) represent a value in these companies less than what regular share appreciation/depreciation already does in normal markets.

In other words, even if the campaign would be instantly accepted, face no objections and all funds/Universities would sell off their fossil fuel assets, the effect would be minimal. This, again, not even considering that there quite possibly would be neutral buyers for these shares, counteracting the effect aimed for by the Fossil Fuel Divestment campaign.

The Oxford report on divestment of Fossil Fuel companies concludes exactely that:

In this report we find that the direct impacts of fossil fuel divestment on equity or debt are likely to be limited. The maximum possible capital that might be divested by university endowments and public pension funds from the fossil fuel companies represents a relatively small pool of funds. .  - Stranded Assets Report Smith School of Enterprise and Environment

My Second Objection

Going after publicly-traded fossil fuel companies in the west is misdirected. Why?

This chart explains it pretty neatly; the vast majority of fossil fuel production is made by National Oil Companies, predominantly in dictatorship or questionable democracies (Russia, Venezuela etc).

That is, the argument about divesting obviously has a further aim than just to annoy oil companies. Climate Activists want to stop the production of oil, so that the impact of climate change is halted. But going after the companies in the West that represent a minor piece, some 20% of global production, is misdirected. If these countries (Saudi Arabia, Iran, Qatar) won't even accept internal criticism and protesters are violently put down, why would foreign University students protest be any of their concern?

A formula for success would look something like this:

Result = (Large IOC share of global production [x] percentage Unis/pension funds hold [x] chance they would comply with the Campaign demands)

We know roughly two of these componens, (Share of IOCs = 20%; and percentage all Funds can affect, estimated to less than 27%). We don't know how successful the campaign might be, but it is reasonable to assume that not all will divest. Still, 0,2 x 0,27 x Y = a very small amount, even if Y turn out to be close to 1.

What I am saying here is that the campaign is completely misdirected; if you care about climate change (which watermelons normally do) you'd be much better off/having a much greater impact if you went vegetarian, got a your bike instead of driving or switched your electricity provider to a non-fossil-fuel one.

Two Great News!

Two pieces of great news have come my way the last couple of days!

First, and foremost, I was accepted to the Students For Liberty's Liberty Fund Conference in Vienna, with the title Institutions of Liberty, an event taking place in late-October. I am honoured to form part of such a reputable event. The topic is displayed below:

"The 'Institutions of Liberty' conference seeks to address the relationship between freedom, markets, and culture in both a narrow and broad sense. While competitive markets lead to wealthier societies with superior opportunities for individuals to employ their talents and labor, questions remain for many regarding the proper cultural and moral underpinnings of markets."

This forms right in line with the Deirdre McCloskey serie starting with Bourgeois Virtue, where she argues that markets and capitalism not only makes us better off materially - but also spiritually. Since I'm currently reading her mesmerizing works, I'm obviously very keen on discussing these things with bright freedom-minded students.

The excitement and happiness over this opportunity had hardly faded when a second piece of amazing news came my way. I was accepted into the editorial staff of the Swedish Liberal Think Tank Frihetssmedjan to write articles on liberalism and freedom. I am still excited over this possibility, and probably aim to contribute a few pieces a week. My initial piece on Scottish Independence seemed to be have been well-received.

I am really looking forward to contributing to Frihetssmedjan and the liberal ideological discussions it poses.

Altogether, these two pieces of news are simply brilliant. We'll see how things move from here.

These are exciting times, indeed!

Review of Steve Keen's talk at the Uni

I am now finally back in Glasgow, ready for yet another exciting semester at the University. Classes don’t start until Monday, but that doesn’t stop societies to hold events and guest lectures. One of these was the visit from Steve Keen, the Australian controversial economist routed in the post-keynesian tradition.

.

I wasn’t too familiar with his works beforehand and I really enjoyed learning a bit more of his approach to economics. Some of the data usage, especially his simulation program MINSKY was beyond me, though. Nevertheless I found some interesting points in his talk.

He’s a heterodox economist, very fond of attacking the neoclassical consensus, which is also his focus. For instance he made a splendid explanation for how certain models used in conventional micro economics (Perfect Competition; Indifference curves;  Demand Curve Aggregation) are not only unrealistic but also internally incoherent. This was refreshing, as was his pounding away at the “Money Neutrality” idea in macro. Neoclassical economics normally argue that money is neutral in transactions going on in the economy, i.e. money is the common denominator of heterogeneous goods and services simplifying exchange of these goods and services, but that it doesn’t impact the transaction itself. However, it also argues that money is just a number, and what matters is the ratio between the values of goods. The prime example is, if the money supply would double overnight and everyone suddenly would have twice the amount of money they had yesterday, neoclassicals say this won’t affect the economy because prices would also double, maintaining relative prices as they were before. This is one of the reason they see inflation as harmless. 

That is of course mistaken, as money supply increases doesn't happen that way; they flow through the economy from bank lending and (artificial) credit expansion, where some groups access those new money before other groups do – also, as Keen pointed out, we consume predominantly out of habit, habits used to certain numbers for certain goods. Even if I suddenly have access to twice as much money on paper, I might still hesitate before buying goods of twice its “normal” price, regardless of the rational approach such an action would entail. 

On the disappointing side was more profound issues in the approach to economics. There was a comment from the audience saying that economics is unscientific when it uses a priori axioms, suggesting its methodology should mirror the hard sciences. Surprisingly, Keen agreed, and added that he doesn’t view economics as a science – rather a discipline. Perhaps a mere tautology, but it is ironic to the point of laughter, when he ten minutes earlier praised the usage of mathematics in economics. 

That’s funny, Professor: see, mathematics is a science that solely uses a priori axioms, just like geometry or logic. Demote a science on the basis of incorrect methodology is an adequate critique, but then it should be held consistently, even to "your own" sciences.  

I don't think Keen is actually placing these disciplines in the same category of “unscientific academia” as economics, but that's what his comment yesterday implied. On the contrary, and this is a point over which Austrians and Neoclassicals fight, you have to use a priori axioms in economics, or else you’re fumbling in the dark. The Economy is us. We are always changing, reacting to new conditions and information. Thus, contrary events can occur simultaneously. If you disregards a priori axioms and only rely on data collection like in the hard sciences, you might have instances where these events cancel out, or even produce a reverse effect, leading the scientist to mindless conclusions. Since economics involve people's actions, which are prone to change at whims and desires, we cannot simply observe data and draw conclusions from those, such as a biologist would. Keen's claim is nonsense. 

That leads me to the second disappointment in Keen’s approach. He’s firmly dedicated on using data, putting into his MINSKY simulation, yielding predictions and explanation of how the economy would work given certain inputs. Again mistaken on his own grounds; people are not “chess men you move on a board”, (to quote the Keynes vs Hayek rap video), "their dreams and desires ignored". Believing that you can map every event in future economic conditions smells of the same convictions Hayek viciously attacked in his Nobel Lecture Pretense of Knowledge in 1974. I thought we were past that...

Murphy and Callahan, back in 2001 when Murphy was still at NYU, added several striking critiques to Keen’s work in their review, for instance about labour economics. Keen does an excellent job taking down the labour theory of value, then turns around and constructs a “real price theory of value”, falling in the same Marxian trap of ignoring the subjectivity of costs.

Overall I must admit I was glad to finally get a taste of his work. After running into his name now and then does yield some interest in a person. Though I'm far from convinced. He has several methodological as well as logical flaws to account for.

A great way to start the semester – I really hope for more occasions to discuss the essence of economics. 

[Another one] of the inherent contradiction(s) of the Left

I previously wrote a piece on how Lefties are contradictory when they simuntaneously protect women's right to their bodies in Abortion debates, while refrain from the same protection in Labour Market debates. I added the Wage Gap vs Profit-Seeking Contradiction a few weeks ago. Here's another amusing contradiction:

We Want to Help the Poor!

Yesterday, citizens all over Sweden laid their votes for what kind of socialists ought to rule their country over the next four years. The Parlamentary situation is peculiar, to say the least:

Neither proper socialists (in red) nor the conservative/liberal socialists (in blue) want to cooperate with Anti-Immigration socialists (in yellow), which means effective governing is bound to get interesting. 

Anyways, the weeks leading up to election time has obviously been chaotic, with politicians on the streets, on tv and even phone calls tried to persuade the voters where to lay their vote. I met a guy representing the Social Democrats, with whom I argued a bit. He justified his position of taxation/redistribution with the following:

We Want to Help the Poor

Now, that's an admirable trait, I suppose, Morality/Theft/State Oppression set aside. But let me have a look at that statement. 

• Almost 100% of the poor on the Planet live outside Fort Europa.
• You raise and maintain Physical as well as Trade-related barriers against all Non-EU countries 
• You prevent third-world farmers, the poorest of the poor, to sell their crops within Fort Europa.
• You tax the entire economy, using some of that proceeds to subsidise inefficient farmers within the European Union
• You destroy crops to maintain high prices for your own wealthy farmers, while effectively keeping the poor alienated
• ... and for the few lucky ones who actually make it past Frontex or Immigration Authorities, you effectively price them out of the labour market by Minimum Wage laws or Union activity.

And while all of this is happening you're campaigning for redistribution among and within the top 5% wealthiest people on the planet?

You're not helping the poor. You're HARMING the poor with your protectionist measures. You're killing the poor with your subsidies, with your Inflation. And all of this you justify by your concern for the poor. 

You're not helping the poor. You're a hypocrite. You're disgusting. Arrogant. Egotistical to the point of narcissism. Everything you accuse the Market, the Liberals and Conservatives for. Disgusting. 

Election Time!

Today, Sweden elect its new masters, and as the Economist gladly pointed out they're looking to overturn what made it comparatively less worse-off than other European countries.

My point: There's no difference, sweethearts.

The Number of Numbers

Since the Centre-Right government Reinfeldt was elected in 2006, 140bn SEK (~£12 bn) of tax-reductions have been made. (Roughly about 10% of then yearly public revenue - and because of economic growth, total public receipts have since then increased by some 29%, while inflation is up only 10% essentially making the tax-reductions irrelevant, but who's counting?)

In 2006 the total Tax Revenue out of GDP was 48,3%. That means, out of a total economy of £100, 48,3p was payed in taxes to the government.

In 2013 the total Tax Revenue out of GDP was 44,5%. That means, out of a total economy of £100, 44,5p was payed in taxes to the government.

Sweden used to be World Champion in taxing its economy; we've now been demoted a few steps, which is causing the Socialist-/Feminist wave ("WE WANT FIRST PLACE!"). Nonetheless, The opposition accepts most of these tax-reductions, saying "you can't keep changing entire tax systems every 4-years". That is, in the oppositions' suggestions of what to do, Tax Revenue would likely be somewhere around tops 46% of GDP. Election is between 44,5% or 46%.

HUGE difference, obviously... (*insert Ironic laugh*).

My Point Again: There is negligible differences between political parties in Sweden. 

The ruling class loots your income, regulates your life and steals your property nontheless.

More reading here: Sagan om Inflytandet. ENJOY Election Day.

Review: 'The Tyranny of Experts' by William Easterly

William Easterly, a NYU Economist, is a major player in development economics and perhaps the biggest critics to how development agencies squander aid and ignore the rights of the poor. The subheading of his newest book, The Tyranny of Experts - Economists, Dictators and the Forgotten Rights of the Poor, indicates the particular interest his book deals with; The pervasiveness of the idea that a Benevolent Dictator could put their populations' rights and freedoms on hold in order for economic growth and prosperity to arise.

He praises the Enlightenment and its protection of individual rights, a statement that initially seems unrelated to his field ("what has rights got to do with feeding my starving family?", implicitly attacking critics that play such a position: "What good is freedom of speech, if you're starving?").
He then consistantly shows how Authoritarian approaches that ignore rights are counter-productive in producing development. How the authoritarian top-down view lost in the West, but remained dominant in Development Agencies (=World Bank, USAID, DFID), effectively preventing the Rest from growing richer.

He mentions outrageous examples that superficially seem well-intended (Gates Foundation or the Tony Blair Africa Governance Initiative), but result in horrendous persecution of poor people. Human Rights Watch showed how donor-funded food relief was used to blackmail opposition. International Development Agencies supporting a regime that jailed opponents and shot demonstrators. The Ethiopian government abused any imaginable right on part of their poorest by forcingly displace them, took villagers' land and leased to foreign investors.Tony Blair praised the alleged Ethiopian Government's rapid reduction of child mortality. Bill Gates mourned the death of Ethiopia's dictator Meles Zenawi, saying it "was a great loss for Ethiopia". Right. Not very benevolent.

I want to point out three topics that particularly spawned my interest: The Blank Slate, Spontaneous Solutions and the Probability Confusion.

Blank Slate.

The Blank Slate, Easterly describes, is the

mindset [that] tends to ignore history and to see each poor society as infinately malleable for the development expert to apply his technical solutions. The alternative would be to learn from history why each poor society is poor, to learn from history why other societies became rich, and to draw lessons accordingly for how to escape poverty.

The Blank Slate is the pervasive attitude in the field of Development to see poor countries as one unit, regardless of differences between them. It fosters the potential to give "One-Size-Fits-All" solutions that disregard history and disregard whatever circumstances lead to the current situation. It's the belief that one can simply erase anything previously occured and start over, forming societies or human beings into whatever you're currently trying to achieve.

Easterly says:

Blank Slate thinking thus opened the door for development experts to reject the utility of the West's history of individual rights and development as a precedent. If the Rest had nothing to learn from its own history, it also had nothing to learn from the West's history. 

Essentially, the Blank Slate, is the excuse development "Experts" can use for disregarding History. For disregarding the reasons for this:

Honestly, it's a very useful concept, applicable to many more areas than Easterly believed, I think.

Concious Directions vs Spontaneous Solution. 

Roughly translated into "Top-Down versus Bottom-Up" approaches. Initially a Hayekian point about dispursed knowledge, Easterly adds reasoning over innovations. Since Innovation means doing things differently, in a way previously unknown or undiscovered, you can't plan innovation as you simply don't know what the results of doing things differently (innovating) will be - so you can't plan for certain results to happen. There's no top-down planning involved in discovering anti-biotics, inventing steam-engines or cellphones.

The point is the same as that made repeatedly throughout this book. The top-down leaders and experts in technology do not have enough knowledge or incentives to get it right for the reality of what is happening at the bottom. 

He goes on, describing how ideas multiply exponentially, and how technological development feeds on itself into a snowball effect consisting of a) previous innovations/non-rivalrous ideas and b) population. Also, the amount of technology had in year 1500 is found to be a pretty good determinant of how much technology that area has today:

We confirmed that technology in 1500 predicts technology (and thus per capita income) today. In fact, 78% of the income difference today between Europe and sub-Saharan Africa can be explained by technology that was already in place by 1500. [...] So we find that a very simple theory of bottom-up innovation can explain many of the big facts about tehcnology around the world today. 

Here, Easterly also draws on Joel Mokyr's work on the British Industrial Revolution: "Intellectual innovation could only occur in the kind of tolerant societies in which sometimes outrageous ideas proposed by highly eccentric men would not entail a violent response against 'heresy'".

Argument simplified:
- Innovation fuels income/wealth
- Individuals with unalianable rights make innovation happen
= Top-Down approach to innovation and lack of individual rights are bad ideas if you're looking for higher incomes.

Probability Confusion.

This area deals with the _ONE_ objection I had while reading; What about the Asian Tigers (South Korea, Taiwan, Singapore, Hong Kong) and their miraculous growth over the last few decades? They were all run by "Benevolent Autocrats". The very existence of these countries seem to throw Easterly's great contribution out the window.

No, he says. We seem to think that autocrats create growth because of a psychological mistake where we confuse two opposite probabilities.

In his outstanding Chapter Thirteen "Leaders: How We Are Seduced by Benevolent Autocrats" he deals with that question as well as with the psychological biases that give credit to leaders while underlying causes might've been more obscure. He concludes:

It is because growth miracles are rare that the true statement 'most growth miracles are autocrats' is so very different from the false statement 'most autocrats are growth miracles'. This same psychological mistake contributes to stereotyping of certain unpopular minority groups. It could be true that 'most terrorists are Muslims', but it is definately not true that 'most Muslims are terrorists'. Prison statistics could indicate that 'most violent felons are black', but it is definately not true that 'most blacks are violent felons'. Racism has many toxic causes, but one of them is just the racists' incompetence at probability. The same incompetence makes us believe autocrats produce high growth."

The above passage is surely what most affected me in his 350-page masterpiece. He also explains the "Myth of the Hot Hand", a phenomenon in basket where you'd want to pass the ball to a player who has scored a lot, believing he'll score again. Over large series of probabilities, it simple isn't true. But if you point your finger at a few selected examples, then sure you could find players scoring over and over - just like you can find autocrats being in power while a country experienced miracolous growth.

His explanation for China, South Korea or Taiwan?
- Levels produce levels, changes produce changes. It's not the level of freedom that produces a certain growth miracle. It's the change in freedom that creates growth. China had massive changes in economic freedom following the reforms in late 1970s. Economic growth is about a percentage change in development, he says. Not about the absolute level of development. This would explain the rapid success of the tigers, although I realize the debate is far from settled just from this. Nevertheless, an amazing insight.

He finishes the books as splendidly as he started it, summing up its main points. Development is a bottom-up thing. Ignore individual rights in order to plan development is a double-failure. Not to mention that freedom is a value in and of itself. Beyond that, there are more fascinating chapters: his examination of development in China, Africa and Colombia; his local history of the Greene neighbourhood in New York, accidently binding some New York history into it. He describes the value of institutions by comparing the Maghrib traders in the Mediterranean to the Genoese. He compares the debates that never happend between Nobel Laureates Gunnar Myrdal and Friedrich Hayek as well as tracing the origin of development experts.

This is simply an amazing book.

The global double standard of rights for the rich and not for the poor is very much alive in the technocratic worldview of development. But this, too, could be a casualty of the Rise of the Rest and the spread of freedom. The disrespect for poor people shown by agencies such as the World Bank and the Gates Foundation, with their stereotypes of wise technocrats from the West and helpless victims from the Rest, may become increasingly untenable. Development may have to give up its authoritarian mind-set to survive. 

The Economics of 'Under the Dome'

I have this love-hatred relationship to TV-Series. I _LOVE_ watching them, but once I do I sort of can't stop. Last, a few months ago, I experienced this with House of Cards. I got curious about it, thought I'd watch the first episode to check it out - and ended up spending the next 36hs rushing through both seasons.

So, most of the time I stay away. Freaking addiction.

But last night I got at it again. Under The Dome caught me by surprise, so I rushed through the first episodes. Woke up with one thing on my mind: Watch it. Simply Addictive.

What did strike me while watching it were the libertarian themes in it. Or rather, the economics of it. A small town is suddenly sealed off from the rest of the world. That means all production and consumption lines are disrupted, seeing as how we trade extensively with one another. Early on, a few things happen that really jumps out at me.

• One of the first anti-government quote from a main character is:
  
  • -"So you don't think the Government did this?"  
  • -"No"
  • -"Why not?"
  • -"'cause it's working"
• Scarcity becomes prevalent; things run out, such as water, insulin for diabetics, gasoline, propane etc. 
• One character, in the face of such scarcity alludes to the role Money plays in society beyond pieces of green paper, saying "I'll provide you with money. Or battery, or propane, or whatever counts as money these days". Brilliant!
• When property rights are no longer respected, things turn ugly. 

Most interesting, though, is what happens with society's wealth - and income. I realize that you could easily make different interpretations about this, seeing as how people turned violent in face of scarcity, how they started looting stores, hitting killing and even raping each other as the few Police Officers lose control ("See what happens without a law enforcement!", or "Look, stupid capitalists. We should all cooperate instead of competing!"). I see that. 

Nevertheless, the society is cut off; there's essentially no more production (apart from the weird farmer character, I suppose). Society starts consuming the resources it has, quickly running out of insulin, anti-biotics, water, propane. The value of things change dramatically. Capital-consumption is prevalent. Society at large becomes way poorer. Wealth is gradually reduced - while income essentially cease to exist. 

The most fascinating thing though, is how there's essentially no more production. Chester's Mill is no longer producing much but disagreement, violence and conflict - none of which are edible, quench your thirst or help diabetics stay alive. Loads of things have to be re-arranged, in terms of producing the most basic goods - and the palpable notion that the wealth in our current societies depend on division of labour, heavy specialization and extensive trade. But when "society" suddenly becomes a few hundred people, the wealth and income possibilities of all is dramatically reduced. 

Fascinating stuff!

FemiNazi!

We're back in business, after last week's discharge of Rebuttals, William Easterly's Tyranny of Experts (Review available shortly) and a few days contemplating the fate of Jan Palach, in Prague. 

Today's accusation is a severe one - one might even call it absurd. But, as Deidre McCloskey often repeats, do hear me out. Consider that I might have a point. FemiNazi.

In my country, there's been a major feminist revolution over the last decade, intensified in the last few years. This, in a nation where gender equality has reached further than perhaps anywhere else. One, particularly awful accusation laid against these proclaiming feminists are the combination of their ideologi with Hitler's, to form the FemiNazi - allegedly it's just a word to describe a radical feminist.

That's of course absurd. But hear me out (though I have to pay homeage to my sister for unconciously pointing this out).

Feminists, quite understandably, don't like views as the ones below.

It consolidates the idea that women's value lies in the beauty and sexiness of their bodies. It's repulsive. It confines the idea that females are for sale, alluding to arranged marriages, prostitution or trafficking. So Feminists want to ban such commercial activities. Ok, sure.

Now, let me elaborate the comparison to Hitler.

Feminists don't like images as the one above - they don't like women being exploited, as they see it. Thus, they'd want to ban it. Whatever is wrong or harms the project of Gender Equality is to be taken away, banned. Punished. Eradicated.

Nazis in the Third Reich didn't like Jews. They believed Jews to be the lowest of the low, filthy and strain on Humanity. Thus, they wanted to ban them. Punish them. Eradicate them.

Here's the similarity that justifies the label 'FemiNazi'; The will to ban, use State Violence to punish and eventually eradicate whatever you find repulsive. It's not the magnitude of the crime here, as obviously murder millions of Jewish people is a far worse action than banning sexist commercial. The point is the will to ban what you don't like. The will to hinder other people from expressing ideas, from trading or even from outright living.

The will to HINDER other people, essentially. This is always and everywhere a moral statement saying: "I know better than you, what's good for you", "My moral is preferable to yours".

Regardless the circumstances, that's a horrible stance, quite justifiably attaining the epithet 'Nazi'.
______
Disclaimer: The argument can be made for most things socialists, statists or State-embracing liberals do; they all rely on the state to forcefully remove what they dislike, meaning the epithet "Nazi" might be applicable even to them. 

Pure Capitalism would lead to Armageddon: Startups/Funding

Banks, Funds and Starting Business

This is a series of objections, starting with the common misconception that capitalism and freedom would hurt everyone, especially the poor, creating unheardof poverty for all. See the initial post here and the entire category here.

One recent objection I had regarding AnCap societies were that banks would never lend to you, unless you have substantial amounts of capital or income already - which then would never occur, because only the rich would have access to these. That is, nobody could ever start a business, unless you were already rich or had a company.

This last part, I already showed in Pure Capitalism would lead to Armageddon: Salaries above, is false.

Neither is the conclusion ("You could never start a business") because of that, accurate:

Simple because bank lending is not the prime source of fund for start-ups or SMEs. 

The top three sources of funds for Business are given below (Martin Zwilling provides an extended list of more opportunities). Crowdfunding is an amazing tool, probably moving up the ranks of importance in the future as it becomes more viral and used. 

1. Current revenue (indeed, assuming a business or income already)
2. Equity, (either your own or acquired through venture capitals, family, investors, Business Angels, networks etc)
3. Obligation & credit (either from banks and financial institutions or straight through the financial credit markets).  

The argument is simply flawed in all of its parts. 

That's some initial responses to why an Anarcho-Capitalist society (or even a Minarchist society) would not lead to the destruction of large chunks of the population, not even the poor, as I showed in the case of Kenya some weeks back. And we havn't even gone into the exciting parts of Private Law and Private Defense. Murphy has a great piece on that, if you're interested