Posts Tagged Thomas Piketty

Problems of our economic and political systems of today

Centralization is the problem of our current economic and political systems, evident in political decision-making, public institutions, companies and capital. The mantra ‘Big is Beautiful’ is wrong: The productivity per employee drops with the increasing size of the organisation, and that is because the single employee has less possibility to influence his own work and is too bound by rules. Also the large organizations are difficult to manage.

Centralized decision-making, for instance in the distance between government and population, increases the damage by wrong decision. The same goes for large corporations: the bigger the organization, the greater the danger for wrong decisions and for catastrophic results. However, this is only a small part of the danger of centralisation. In the following paragraphs I will look at its implications, which will be seen in greater aggressiveness, fewer social skills and decreasing possibilities to control our future. In other words, there are less possibilities to make decisions on a large scale as well as in our own lives, at home and work.

The danger of centralization works through various mechanisms, as

  • Materialism, a purely physical view of the universe,
  • Pervasive Politics, proliferation of the political system in daily life,
  • Groupings, emphasis on group, race, and ethnicity, us and them,
  • Orthodoxy, literal and “simple” interpretation of the Gospels,
  • Superstition, spiritual beliefs without foundation in thinking skills,
  • Abstract Thinking, cultivating abstract theorization,
  • Quantitative Thinking, purely quantitative (statistical) observation.

Combined with a dualistic worldview where everything is black and white, these will increase the strife between people all over the world.

Dualism

Materialism
Dualistic thinking sees everything in opposites, and this is one of the greatest dangers today: “If you are not with me, you are against me”. This is a widespread sickness, especially on the internet where you can hide under anonymity. However, orthodoxy of any kind – religious, atheistic, or political – moves our future in a dangerous direction. What makes it so dangerous are that both sides believe that they fight on the side of good, but the reality is that they both fight for extremism, whereas truth is always somewhere in-between.

The deception is not to see the full picture, to understand both sides in any relation!

The challenge is to find the golden mean between the extremes.

The following paragraphs will look into different areas where dualism endangers our society.

The deception is not to see the full picture, to understand both sides in any relation!

The challenge is to find the Golden Mean between the extremes.

The following paragraphs will look into different areas where Dualism endangers our society.

Materialism

Science is seen as the absolute truth against black superstition represented by religion. The latter is not seen as having different and complementary views on the same reality. It has become a kind of atheistic religion in itself, attacking spirituality and moral values. Darwin is their prime god, and their Messiahs are the sentient robots they hope will come and save the world. The problem are that most of the atheists don’t really understand what they are preaching, and they don’t accept scientific evidence if it’s against their own beliefs. See Is it possible to make Intelligent Machines?

Science can’t make decisions or take responsibility, as Science in itself has no morality per se. Science is always used by others: more dynamic groups in society, by players on the market or in politics, whose morals aren’t better than that of the courts or the voters.

“Our scientific power has outrun our spiritual power. We have guided missiles and misguided men.” Martin Luther King Jr.

“I believe that a scientist looking at nonscientific problems is just as dumb as the next guy.” Richard Feynman

“As soon as questions of will or decision or reason or choice of action arise, human science is at a loss.” Noam Chomsky

Pervasive Politics

You see dualism in politics, especially in two-party systems, where there is no space for other views. Politics dominates today everybody’s life, in contrast to forty years ago, where politics was talked about at the elections every fourth year. Back then, the laws gave rules for the relation between citizens, whereas today the laws regulate the relation between state and citizens.

The political invasion of the private sphere destroys the natural equilibrium of society. The economic system today is an example of this: the equilibrium of that system ends regularly in chaos, as the system is made for speculators, not for companies, nor for the country and its citizens. Today the decisions are taken via regulations or laws on behalf of groups, whereas in earlier times, the decisions were taken on behalf of individuals by those who were familiar with specific cases. Wrong decisions had only small consequences then, whereas wrong decisions today have far heavier consequences as more people are dependent on these decisions.

“Justice without mercy is unjust.” Eli Wamberg

This is a problem all over the world, and it gets worse the more laws and rules people have to follow.

One of the biggest lies of today: We need more regulations as a result of society’s complexity. Wrong, it is more complex as a result of all those regulations. Computers take the complexity out of complex tasks, and prefabricated goods take the complexity out of manual work, so what is complex today, except the laws?

Groupings

There is a tendency to split up in groups, instead of seeing mankind as one: people split up according to race, religion, language, land, locality, sex, or whatever. There is a lots of hate in this, not least on the Internet.

Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.”  Friedrich Nietzsche

Orthodoxy

There is a tendency to read religious texts too narrowly. For instance, the Jehovah Witnesses and other religious groups who take their holy books too literally. Durban Two, where the Islamic countries tries to prohibit any criticism of religion, is a typical example showing that discussions of religious content is unwanted. New religious movements like Scientology, Atheism, the Moonies, and so on, are also too rigid.

“Beware the man of one book.”  Saint Thomas Aquinas

Superstition

Another trap is to accept words of religious, esoteric, and scientific origin without thought. The spiritually-inclined are in danger of reading spiritual literature without conscious understanding, but that includes also atheists reading scientific texts without understanding.

One of the peculiar sins of the twentieth century which we’ve developed to a very high level is the sin of credulity. It has been said that when human beings stop believing in God they believe in nothing. The truth is much worse: they believe in anything.”  Malcolm Muggeridge

Abstract Thinking

In contrast to real understanding, abstract thinking is seen everywhere, including the previous subjects discussed. Man is seen as a thing, not as a being. But reality is not abstract, and every decision based on abstract thinking is wrong, especially if living beings are involved.

Quantitative Thinking

This involves statistics, but without understanding. Let us say a politician want to make a law, and it will make 0.123% of all families go bankrupt, but as the percent is so low, nobody sees it as a problem. Nobody understands that there are real people behind those figures. Quantitative thinking always works through abstractions.

Big Mother

The development moves in a direction where we can expect that our personal ‘I’ is assimilated by the masses, the collective. In the western world we talk about freedom: that nobody should tell us what to do, and we fight (duality problem) against conspiracies, against CO2 pollution, against many other things, but we don’t define and work consistently for a world worth living in. At the same time, our capabilities to decide our own destiny are diminishing, regulated by law, organizations, computers, and infrastructure. The result may be that everybody just follows the paths with least resistance, which are built through directives, regulations, computer capabilities, ending in a situation where nobody thinks or makes decisions any more. And it’s all made for the good of the citizens by Big Mother.

“All over the place, from the popular culture to the propaganda system, there is constant pressure to make people feel that they are helpless, that the only role they can have is to ratify decisions and to consume.” Noam Chomsky

Political Correctness

Political Correctness is sneaking in everywhere, without any conscious effort by any conspiratorial agency, but because of the path of least resistance.

“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum – even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.” Noam Chomsky

No Childhood

Many of the restrictions and laws are made because of poor parenting: children no longer learn to live in a community; they are each and all small kings and princesses, who don’t understand that others don’t see them as such. Their understanding of scientific, historic or creative endeavors is as small as it has ever been. Children of olden times learned more at the campfire than the children of today. As they don’t know how to behave, more and more laws are created to remedy this deficient parenting.

The central problem are that children aren’t allowed to be children any longer, or as Michael Jackson says:

“Childhood has become the great casualty of modern-day living. All around us we are producing scores of kids who have not had the joy, who have not been accorded the right, who have not been allowed the freedom, or knowing what it’s like to be a kid.

Today children are constantly encouraged to grow up faster, as if this period known as childhood is a burdensome stage, to be endured and ushered through, as swiftly as possible.”

“Love, ladies and gentlemen, is the human family’s most precious legacy, its richest bequest, its golden inheritance. And it is a treasure that is handed down from one generation to another. Previous ages may not have had the wealth we enjoy. Their houses may have lacked electricity, and they squeezed their many kids into small homes without central heating. But those homes had no darkness, nor were they cold. They were lit bright with the glow of love and they were warmed snugly by the very heat of the human heart. Parents, undistracted by the lust for luxury and status, accorded their children primacy in their lives.” Michael Jackson, Speech at Oxford University(2001)

Complicated Structures

You can’t make tax-systems as complicated as they are today without computers, and you can’t control the many citizens or employees, as we can today, without computers; the amount of data is enormous. They make it possible to create structures which are difficult to manage without using computers, and computers don’t know HR.

GM and the American Automobile Industry are good examples of these gigantic companies, who would be impossible to manage without stiff administrative structures and computers, and it’s extremely difficult to change these structures if it were needed. But modern software organizations have the same problems, with their software bases: Microsoft with its operating system, and Office system, Yahoo with it’s big software base. There are also problems with reduction of labour, and new organizations such as Google with its extreme growth, will quickly get into the same problems. The only way out is to regularly rebuild old systems from the ground without any application reuse, to keep different applications separated on application level and to use methods which make the programming as simple and cost effective as possible.

These big organizations are extremely susceptible to the Peters Principle:

“In a hierarchy, every employee tends to rise to his level of incompetence.”

I believe computers can be a boon to mankind, but we have to control how and what they are used for, not letting their possibilities decide our future, as their strength can be used both for good and evil purposes.

Management and Computers

You can use computers for many things: they can plan routes for transport, or decrease energy consumption, and many other useful things. This sounds good, but if we don’t take care, it could mean that it makes the knowledge and experience of man superfluous or even dangerous: man’s role can become degraded to that of a machine.

The need for knowledge is diminishing everywhere in society, except within the computer world. Many jobs which needed educated craftsmen can now be done by unskilled labor, as building materials don’t need special skills any more, and the computer has taken over a lot of paperwork and decision-making. This turns everyone into secretaries except the secretaries: Even executives write their own letters and calculating sheets on their computers, instead of using secretaries, so they don’t do what they were hired and paid for – manage.

The term “human resources” is in itself a degradation. People are no longer individuals: They are a kind of commodity. See “Human Resources” by Scott Noble.

Large Structures

The physicist Geoffrey B. West studies large structures like cities and corporate organisations, and has found that cities increase their productivity and also their problems, while corporate organisations decrease their productivity as they grow.

“Bettencourt and West discovered that corporate productivity, unlike urban productivity, was entirely sublinear. As the number of employees grows, the amount of profit per employee shrinks. “
“The graph reflects the bleak reality of corporate growth, in which efficiencies of scale are almost always outweighed by the burdens of bureaucracy. “When a company starts out, it’s all about the new idea,” West says. “And then, if the company gets lucky, the idea takes off. Everybody is happy and rich. But then management starts worrying about the bottom line, and so all these people are hired to keep track of the paper clips. This is the beginning of the end.”
“The danger, West says, is that the inevitable decline in profit per employee makes large companies increasingly vulnerable to market volatility. Since the company now has to support an expensive staff — overhead costs increase with size — even a minor disturbance can lead to significant losses. As West puts it, “Companies are killed by their need to keep on getting bigger.”

Public organisations have of course the same problems as the corporate companies, they don’t trust their employees.

Cities are good examples on how the unstructured principles works, how the size of the city increases the production per citizen.

“According to the data, whenever a city doubles in size, every measure of economic activity, from construction spending to the amount of bank deposits, increases by approximately 15 percent per capita. It doesn’t matter how big the city is; the law remains the same. “This remarkable equation is why people move to the big city,” West says. “Because you can take the same person, and if you just move them to a city that’s twice as big, then all of a sudden they’ll do 15 percent more of everything that we can measure.”
“When Bettencourt and West analyzed the negative variables of urban life, like crime and disease, they discovered that the exact same mathematical equation applied.”
“For West, the impermanence of the corporation illuminates the real strength of the metropolis. Unlike companies, which are managed in a top-down fashion by a team of highly paid executives, cities are unruly places, largely immune to the desires of politicians and planners. “Think about how powerless a mayor is,” West says. “They can’t tell people where to live or what to do or who to talk to. Cities can’t be managed, and that’s what keeps them so vibrant. They’re just these insane masses of people, bumping into each other and maybe sharing an idea or two. It’s the freedom of the city that keeps it alive.”

No Competent Leaders

What makes it so frustratingly absurd is that we are giving away our independence to a system, a network of directives and conventions, without any persons being in charge. There is nowhere you can go to say that it’s wrong and it should be otherwise. Everybody will tell you, “That’s how it is and it has always been that way, and it can’t be in any other way, as it’s too costly to change the computers programming just because of you!” Of course we have leaders at the top of the state or the corporate companies, but as the decision-making is moved up through the hierarchy (following automatic rules,) it therefore becomes more and more difficult to manage big organizations, as everything becomes dependent on one decision- maker alone, and few can, or know how to, change the course. It’s more difficult to change the direction of a state, organization, or company than a supertanker. Consequently, organizations becomes automatons, and companies go under in the event of unanticipated events, when structural change is what is actually needed.

GM and the American automobile industry are good examples of this inability to change: They had known for decades that they should change their models to compete with Japanese and European manufacturers, but they couldn’t.

The incompetence of these organizations gives rise to conspiracy theories as Hanlon’s Law warns about:

“Never attribute to malice that which can be adequately explained by stupidity.”

A book by Thomas Ricks: “The Generals” (New York Times, Wired, The Atlantic) gives a deep analysis of the US army, and the conclusion is that it is a uniformed bureaucracy with incompetent leaders.
There are 945 generals and admirals, which is one general per 1,500 man. The army has ten active divisions and 109 major generals to command them, and more and more generals are being created, according to William Astore
The army is only good at one thing – spin, Donald Rumsfeld secretly hired 75 generals and other top officers to sell the war.

During World War II, top officials expected some generals to fail in combat, and were prepared to remove them when they did. The personalities of these generals mattered enormously, and the Army’s chief of staff, George C. Marshall, worked hard to find the right men for the jobs at hand. When some officers did not work out, they were removed quickly—but many were given another chance, in a different job. (Ginder, Landrum, and Williams were all given second chances, for instance—and all, to varying extents, redeemed themselves.) This hard-nosed but flexible system created a strong military, not only because the most competent were allowed to rise quickly, but also because people could learn from mistakes before the results became crippling, and because officers could find the right fit for their particular abilities.

In World War II, the firing of a general was seen as a sign that the system was working as planned. Yet now, in the rare instances when it does occur, relief tends to be seen, especially inside the Army, as a sign that the system has somehow failed. Only one high-profile relief occurred during the American invasion of Iraq, and the officer removed was not a general but a Marine colonel. Relief has become so unusual that even this firing made front-page news.

The Atlantic.

The following video shows many of the tendencies mentioned. Most banks don’t have such types as Potter any longer: the bank works and thinks like a machine without any feelings or empathy at all, customer service is merely a word, not a fact.

From Move Your Money who tries to resist the Corporate Ideology.

Automated Decisions

Buying and selling on the stock market are for a great part based on automated decisions made by computers, but as we have seen, it can go terrible wrong when some unanticipated events shows up. What’s worse, the stock market was made to foster strong and sound companies: not for computer-controlled gaming, but for intelligent investment.

As fewer and fewer managers can make decisions, these decisions will be automated as rules in computers, and it will be impossible to make decisions based on individual concerns.

Decreasing Social Intercourse

Computers are very effective for entertainment: you can live your whole life on the internet, without any direct social contact. You can play games and do your work through the net if necessary. You can also discuss, shop for sex/ books/ programs/ random data on the net (It can be like a drug in itself). You can book your food from a local pizzeria, book escort girls, men, and boys, eventually finding mates on the net if you really want to live together with another living being. The film Matrix is a plausible destiny, not by force, but semi-freely. It’s not Big Brother, it’s Big Mama.

Less Social Skills

In the old days, children, teenagers, and adults learned by living in a community, and there was room for everybody, even the village idiot. These and other unusual persons were educated by their social environment which were mostly normal. We are today living more and more on the internet, learning our social skills through social applications and computer games. The old community’s influence is replaced by the internet friends, and as like seeks like, they can only increase their phobias or other disorders. Examples are numerous: pedophilia, school killings, terrorists, all kind of surrealistic interests, and so forth. The Law of Sayre’s is relevant in many of these cases:

“In any dispute the intensity of feeling is inversely proportional to the value of the stakes at issue.”

No Privacy

Children and teenagers can be reached by mobile and GPS always and everywhere, followed on the internet through Twitter or Facebook by their parents: no privacy. The same goes for the adults: no privacy and always available for state officials, economic institutions and employers. Password protection, pseudonyms, and like precautions are no hindrance, Cyber-Investigators will find everything, relevant or not. You cannot even go to the North Pole or to the Himalayas in peace: they can always reach you, and you them.

Where’s the remotest place on Earth?

In our hyperconnected world, getting away from it all is easier said than done. Click the link in the main text to see more of the connectivity maps

In our hyper-connected world, getting away from it all is easier said than done. New Scientist.

Conspiracy Theories

The frustration has to go somewhere, and while there are no one responsible for our situation, and no one with enough insight, determination, and power to change the situation, we invent some god-like powerful conspirators who in all secrecy, with hundreds of employees, stands behind all the bad in this world. The truth is that most leaders are so incompetent that it hurts. Just look at Iraq: The military invasion was well thought out, but the rest was incompetence par excellence. And that is not an exception, it’s the rule. Of course, there are conspiracies and secret operations, but if more than one participant knowing about the conspiracy is alive a year later, it’s just a question of time before the world know. Another reason to use few people is that really competent people are difficult to find, and the more people involve, the bigger the risks for failure. Moreover, the bigger the consequences of a possilble failure, the less interesting the project becomes. The best way to check if a conspiracy theory is viable or not, isn’t to examine the technical evidence but rather the psychology and the necessary resources that would be needed behind the scenes, also how big is the risk, who gains, what’s their gain, how many participate, and what expertise is necessary.

A sober view on conspiracy theories from the left:


Noam Chomsky on Conspiracy Theories
In case the video is not functioning look here

The the Bafta-winning film-maker Adam Curtis:

“I don’t believe in conspiracies. Politicians don’t have the capacity to conspire, except in the most short-term way. [The distorted image of bin Laden] just suited a lot of people’s purposes at that time.”

Literature

Thomas Piketty

The Independent: The French economist forcing America to wake up to the end of The Dream.
Out of America: Thomas Piketty’s tome which skewers the idea that anyone who works hard can make it in the US seems to have hit a nerve

“Capital In The Twenty-First Century”, all 685 pages of it, is the No 1 best-seller on Amazon – apparently the first time that anything published by the venerable Harvard University Press has attained such dizzying celebrity. No self-regarding dinner party in Washington or New York is worth its salt without a discussion of it. Last Friday, came the ultimate accolade of a multiple coronation on the op-ed page of The New York Times.

The Huffington Post: Economist Thomas Piketty Explains Why Income Inequality Is Just Getting Started

Michael Lewis

Wired: Michael Lewis on Exposing Wall Street’s Biggest High-Tech Swindle in the book: Flash Boys: A Wall Street Revolt

Flash Boys explores the world of high-frequency trading, a scheme in which traders use ultra-fast network connections to sniff out the intentions of other, slower traders, thereby acting before others can respond. Critics of the practice–Lewis chief among them–argue that high-frequency trading creates something akin to insider trading: a predatory environment for less advantaged investors. WIRED spoke with Lewis at an event organized by Live Talks in downtown Los Angeles.

Elizabeth Warren

A Fighting Chance (Apple, Amazon)

An unlikely political star tells the inspiring story of the two-decade journey that taught her how Washington really works—and really doesn’t.

In this passionate, funny, rabble-rousing book, Warren shows why she has chosen to fight tooth and nail for the middle class—and why she has become a hero to all those who believe that America’s government can and must do better for working families.

New York Times: Book review of A Fighting Chance

A good review, also giving a good idea about who she is.

Adam Curtis

The the Bafta-winning film-maker Adam Curtis:

Philosophy of Materialism

Allan Bloom

The Closing of the American Mind, Simon & Schuster Inc.

Christopher Lasch

Haven in a Heartless World, 1977, Basic Books, Inc.

In the American political vocabulary, “family” and “family values” no longer simply evoke pictures of harmonious scenes; they also push our buttons (left and right) about what is wrong with society. One of the earliest and sharpest cultural commentators to investigate the twentieth-century American family, Christopher Lasch argues in this book that as social science “experts” intrude more and more into our lives, the family’s vital role as the moral and social cornerstone of society disintegrates – and, left unchecked, so does our political and personal freedom. Haven in a Heartless World is a trenchant analysis of the plight of the family. Lasch takes a clear-eyed look at the institution in which America’s future generations are being raised and finds it faltering.

Geoffrey B. West

A Physicist Turns the City Into an Equation:

A New York Times article on his work.

Growth, innovation, scaling, and the pace of life in cities:

Describes the mathematical background for his work.

Atticannie’s Blog

Why Teacher Drink, the sequel: Natalie Munroe speaks out

Huffington Post – The Psychology Of Materialism, And Why It’s Making You Unhappy

Matt Walsh:

That’s our entire economic system: buy things. Everybody buy. It doesn’t matter what you buy. Just buy. It doesn’t matter if you don’t have money. Just buy. Our entire civilization now rests on the assumption that, no matter what else happens, we will all continue to buy lots and lots of things. Buy, buy, buy, buy, buy. And then buy a little more. Don’t create, or produce, or discover — just buy. Never save, never invest, never cut back — just buy. Buy what you don’t need with money you don’t have… Buy like you breathe, only more frequently.

Eager Retailers Greet Crowds Of Shoppers On

Antoine de Saint-Exupery

have written a little book called “Night Flight” which describes man’s fight against the Materialistic docility to keep man competent and responsible.

Rudolf Steiner

The Social question from an esoteric view, in German and in English.

Political Correctness

Political Correctness is sneaking in everywhere, without any conscious effort by any conspiratorial agency, but because of the path of least resistance.

The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum – even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.

Noam Chomsky

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