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	<title>Critical Thinking Applied</title>
	
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		<title>Philosophy Series 1</title>
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		<comments>http://critical-thinker.net/?p=2124#comments</comments>
		<pubDate>Tue, 21 May 2013 19:11:56 +0000</pubDate>
		<dc:creator>Mark</dc:creator>
				<category><![CDATA[Uncategorized]]></category>

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		<description><![CDATA[<p>Philosophy Series Contents (to be updated with each new installment)
</p>
<p>Prelude to the Philosophy Series    1
</p>
<p style="margin-left: 11pt">An Introduction to Greek Thinking    1
	</p>
<p style="margin-left: 11pt">And Beyond&#8230;    2
	</p>
<p style="margin-left: 11pt">This is how philosophy begins&#8230;    2
	</p>
</p>
Prelude to the Philosophy Series

An Introduction to Greek Thinking

<p>Suppose you could look at infinity (apeirōn, ἄπειρον).  What would that mean?  Would you see something?  You may but might it <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2124">Philosophy Series 1</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=0f0baa61ce120f30c65770c1c71a0f95&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p><span style="font-size:10pt"><strong>Philosophy Series Contents (to be updated with each new installment)<br />
</strong></span></p>
<p><a href="#_Toc356904766">Prelude to the Philosophy Series    1<br />
</a></p>
<p style="margin-left: 11pt"><a href="#_Toc356904767">An Introduction to Greek Thinking    1</a>
	</p>
<p style="margin-left: 11pt"><a href="#_Toc356904768">And Beyond&#8230;    2</a>
	</p>
<p style="margin-left: 11pt"><a href="#_Toc356904769">This is how philosophy begins&#8230;    2</a>
	</p>
</p>
<h1>Prelude to the Philosophy Series<br />
</h1>
<h2>An Introduction to Greek Thinking<br />
</h2>
<p>Suppose you could look at infinity (apeirōn, ἄπειρον).  What would that mean?  Would you see something?  You may but might it be an apparition?  True, it may be some-thing, a concrete thing, definite in its appearance but might it be facade?  Might it be that what you may see of infinity is really what you can&#8217;t see?  Would there be an excess that would incessantly show itself precisely by not showing itself?  Its showing would be in its continual vanishing.  You would never see infinity, only a phantasm, an imagining, a mythos, a muse.  Your imagining might take various forms depending on your history.  You might think of space, of time-space, the khôra in Greek (χώρα); a receptacle which gives place and makes movement possible, thus, temporality.  Yet, infinity would not be this generative space.  This space would be a fantasy of infinity.  Infinity would elude arche (<a href="http://en.wiktionary.org/wiki/%E1%BC%80%CF%81%CF%87%CE%AE" title="wikt:ἀρχή">ἀρχή</a>), genesis, origin.  Infinity would always take leave of khôra.  It might be imagined as a gap, a yawning gap (χάος) translated as chaos.  While all things might be born (γένετ&#8217;), come into new being, from khôra, infinity would always be a radical tear, an infinite rupture, absolute alterity or otherness.  Infinity would always overflow itself in our phantasms.  Could we think of infinity as an &#8216;it&#8217;?  How could infinity overflow an &#8216;it&#8217;?  Perhaps as a &#8216;he&#8217; or a &#8216;she&#8217;.  Certainly, that would be an excess to an &#8216;it&#8217;.  Yes, but infinity would yet again find itself in between our idea (ἰδέα) of neuter and gender.  The idea as form (<em>morphe, </em>μορφή<em>)</em>, what appears and becomes present, and endures in itself must always underlie phantasm.  Idea conveys permanence as what really &#8216;is&#8217; (ontos, ὄντος).  However, with regard to infinity another idea shows itself &#8211; void.  Is the idea of void the end (telos, τέλος) and completion of infinity?  I think not.  After all, ideas have some affinity with infinity in phantasm and the idea of negation, even as the &#8216;idea&#8217; of what retreats and cannot show itself in idea.  Even in retreat, negation  and privation we only allude to infinity.  We poeticize, metaphor-icize, allegorize, mythologize and yet the gap remains.  This gap is yet another idea that eternally turns on itself, the hermeneutical circle of language.  It affirms contradiction at every step and leaves us impoverished, alone, wanderers without home; world weary and moving; this we call aging.  In turmoil and strife (polemus, πόλεμος) our phantasm wears down and grinds down without ever achieving anything other than itself and all the while infinity remains.  When we can no longer endure infinity we gracefully find death, escape from infinity into infinity.  Our retreat is once again our entrance.  We begin where we started and by that we know infinity.
</p>
<h2>And Beyond&#8230;<br />
</h2>
<p>En-thinking infinity is an ethics.  We can choose an absolute or we can choose to stand in the face of what exceeds our absolute.  Ah, you gest, how can absolute be absolute without infinity?  Therefore, we must have an idea of infinity in &#8216;absolute&#8217;.  Here there is play.  Yes, it could be that &#8216;absolute&#8217; is a synonym for infinity as even &#8216;inifinty&#8217; is an idea.  If absolute overflows itself then we may take it as a synonym.  We might take everything, all (panta, παντα) as another synonym.  To take it further, we might monistic-ally, monotheistic-ally and mystically let infinity play in out phantasms; this, we call God.  In God, infinity is finally revealed&#8230;we think.  On the other hand, we may separate and divide our absolute dialectically or synthesize and integrate until we finally arrive at &#8216;The Absolute&#8217;, &#8216;The Idea&#8217; and there we may confidently declare this is infinity.  The final solution to infinity has no excess in this magnificent discovery&#8230;we think.  Here, as Idea, we can see and understand that infinity is nothing other than pure, self-determining Idea.  The residue of God and Idea is metaphysical.  Here metaphysics has been transformed from what &#8216;is&#8217; is (ontos, ὄντος) to what is True, what truly shows itself as itself as infinity.  Metaphysics has been raised to beyond physics.  At the same time physics has been raised to beyond metaphysics.  In this battle of the Titans the banner of Truth is the battle cry.  En-history we survey bleak materialism or rich spiritualism, body and mind, subject and object, accident and substance, thing and no-thing.  And then, beyond meets end.  Beyond good and evil the Great Nausea is eternal recurrence of the same.   Our over-rich history has aged and become old.  It repeats itself in tiresome fashion as we age in desperate and futile attempts to de-legitimize, capitalize, evade, re-phantasma-size, affirm and overcome,  cyni-size and skepti-size; yet, all sizes no longer fit.  Infinity has once again escaped and we find ourselves once again where we started, a new beginning.  And still, we never knew infinity.  How is it that history is infinity&#8217;s haunting?
</p>
<h2>This is how philosophy begins&#8230;<br />
</h2>
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		<title>Shadow Universals</title>
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		<comments>http://critical-thinker.net/?p=2120#comments</comments>
		<pubDate>Mon, 20 May 2013 20:44:08 +0000</pubDate>
		<dc:creator>Mark</dc:creator>
				<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Politics]]></category>

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		<description><![CDATA[<p>I think we should strive towards justice and critical thinking.  Our Founding Fathers constitutionally put a judicial branch into government because they knew that people were quick to judge based on sensationalized facts.  From a philosophical perspective there is quite an interesting dynamic between universal judgments as Kant recognized and particular cases which, all too often, are not obvious but dubious and uncertain, the macro and the micro, the one and the many.  <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2120">Shadow Universals</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=0f0baa61ce120f30c65770c1c71a0f95&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>I think we should strive towards justice and critical thinking.  Our Founding Fathers constitutionally put a judicial branch into government because they knew that people were quick to judge based on sensationalized facts.  From a philosophical perspective there is quite an interesting dynamic between universal judgments as Kant recognized and particular cases which, all too often, are not obvious but dubious and uncertain, the macro and the micro, the one and the many.  The existential dilemma is the in-between where we live and breathe and have our being.  Post-modernism is replete with those that awaken the ancient Greek Skeptics<sup>1</sup> and Cynics<sup>2</sup> refrain from their Platonic and Aristotelian counterparts.  The perennial themes that Leibniz first observed<sup>3</sup> are replayed countless times by those that must act and react to the play of universal and particular as a singularity.  Judgments are not optional as we must act and align our universals (or denials of them) in meaning-bestowing ways.  Let&#8217;s take an example in the Austrian School of Economics.
</p>
<p>The Austrian Economic School&#8217;s retreat into the micro-economic serves a macro-economic goal, a universal ideology that sustains itself vis-à-vis Menger&#8217;s causal realism<sup>4</sup> and Rothbard&#8217;s chaos theory of economics<sup>5</sup> which results in a spontaneous order of self-organization for Hayek<sup>6</sup>.  Their criticism of neo-classic, macro-economic models deny these schools legitimacy based on their imagined universal orders that result in central planning.  The Austrian model is based on an absolute freedom from idealized &#8216;economic theories&#8217; and the assumption that entrepreneurship driven by free-market price competition in a spontaneous order, a bottom up, Darwinian styled, self organization that resists history and <em>a priori</em> narrative.   Market equilibrium<sup>7</sup> is denied as any long term market dynamic.  Market predictability and manipulation are discredited as the outdated, neo-classic idealization in both neo-classic capitalism and Marxism.  While it appears that this school would distance itself at times from post-modernism and some of post modernity&#8217;s initial affinity with certain liberal arts schools of Marxism, it shares a similar distrust of what Derrida calls &#8220;logocentrism&#8221; in deconstruction.  It prefers localization to &#8216;universalization&#8217;.  However, a certain purity of discord is attributed to entrepreneurial competition that may have a hard time explaining collusion.
</p>
<p>Even if we take the bottom up approach to market dynamics there are dynamic differences between small-scale and large-scale entrepreneurship.  Small-scale entrepreneurship is not performed in an absolute individualized vacuum but seeks market advantage not only by competition but also by partnership and strategic alliance which it largely does not yet have.  Large-scale entrepreneurship already has forged those alliances and seeks to maintain the ones that further its economic goals and use its market leverage to create new economic alliances.  If there is no market order that can stand over and above the market then the differences between partnership and alliance and price collusion and market monopoly could not be determined by market regulation.  In effect, market &#8216;universalizations&#8217;, could spontaneously arise and &#8216;self-organize&#8217; without restraint.  Of course, the Austrian objection to this would be the ardent belief that market price competition and <em>lassie faire</em> capitalism as the most efficient allocation of market resources would prohibit this kind of market dynamic.  For the Austrians however, this is not the case for government intervention where government tampering results in &#8216;malinvestment&#8217; and over allocation of labor.  Rothbard states,
</p>
<blockquote><p>The Fed essentially is a legalized monopoly counterfeiter. And the effect of the Fed increasing the money supply, or the Bank of England or any central bank, is almost the same as any counterfeiter.<sup>8</sup><em><br />
			</em></p>
</blockquote>
<p>There is an apparent faith that no matter how large companies can be they would be exempt from market tampering which could only be rightfully applied to the government.  It is a pre-determined absolution of free-market &#8216;self-organization&#8217; and government imposed market order.  The Austrian faith only works if this difference can be absolutely maintained.  Here we have pin-pointed the absolute in Austrian economics.  It is a faith that must think the market in terms of the individual and not the collective.  Even if a large corporation were larger than the government, it would be unhindered and unfettered by its &#8216;private individualism&#8217; banner which could not be claimed by the government.  Could a large corporation manipulate the economy?  Is that inconceivable?  Could a large corporation not be the most efficient allocation of resources?  Could the government make any positive contribution to market economy?  Is the government always essentially defined as anti-free-market economy?  How could one prove such a thing where it true especially if macro-economic measures are disqualified at the start?  Paul Cantor states,
</p>
<blockquote><p>In short, the free market will always produce failures, but, unlike other economic systems, it has a built-in mechanism for correcting them. That is why the efforts of a multitude of uncoordinated market actors can produce a more rational result than any centrally planned economy can generate. Centrally planned economies inevitably produce system wide failures, whereas the free market tends toward merely local failures, which generally cancel each other out.<sup>9</sup><em><br />
			</em></p>
</blockquote>
<p>Does this line of distinction really work?  Are we to believe that we cannot correct failures in government?  What is voting for if this is so?  Why homogenize government?  Don&#8217;t we have local governments as well?  Cantor states that &#8220;the free market tends toward merely local failures&#8221;.  I know the Austrians wholly blame the recession of 2008 on government intervention but isn&#8217;t the impunity of the free-market from any blame whatsoever a step away from realism and towards the ideal?
</p>
<p>In Austrian economics, the metaphysic of the individual must be maintained over and against the collective as a way to purge the market of impurity but the individual never exists in some metaphysical, ontological, hermetic isolation.  Groups and collectivities are formed by individuals that can counter and thwart other individuals, even other entrepreneurs, by its sheer size and this can happen in governments and private corporations.  The Austrians talk a good game but their causal realism has just as many universal ideals built into it as their arch-nemesis neo-classic economics, just different universals.  If causality is stretched to accommodate theories it can easily fall into the fallacy of false causality.  The sign of this would be clear and artificial lines of demarcation that cannot or will not explain or justify itself.  Further, any insistence that even the attempt to hold itself accountable to economic metrics rests on discounted macro-economic ideals is certainly a red flag for unfalsifiability; Popper&#8217;s notion of the difference between science and pseudoscience.  History has shown universal truths, cultural myths, can be deceptively dangerous and insidious when they myopically distance themselves from any possible grounds for criticism.
</p>
<p>_________________
</p>
<p><sup>1 <a href="http://www.iep.utm.edu/skepanci/"/></sup>See http://www.iep.utm.edu/skepanci/
</p>
<p><sup>2 <a href="http://www.iep.utm.edu/cynics/"/></sup>See http://www.iep.utm.edu/cynics/
</p>
<p><sup>3 <a href="http://www.friesian.com/leibniz.htm"/></sup>See http://www.friesian.com/leibniz.htm
</p>
<p><sup>4 <a href="http://mises.org/daily/6254/The-Odyssey-of-Sound-Economics"/></sup>See http://mises.org/daily/6254/The-Odyssey-of-Sound-Economics
</p>
<p><sup>5 <a href="http://mises.org/freemarket_detail.aspx?control=296"/></sup>See http://mises.org/freemarket_detail.aspx?control=296
</p>
<p><sup>6 <a href="http://mises.org/daily/4034/The-Poetics-of-Spontaneous-Order-Austrian-Economics-and-Literary-Criticism"/></sup>See http://mises.org/daily/4034/The-Poetics-of-Spontaneous-Order-Austrian-Economics-and-Literary-Criticism
</p>
<p><sup>7 <a href="http://mises.org/freemarket_detail.aspx?control=296"/></sup>See http://mises.org/freemarket_detail.aspx?control=296
</p>
<p><sup>8 <a href="http://mises.org/pdf/het5_mises_and_austrian_economics_rothbard.pdf"/></sup>See http://mises.org/pdf/het5_mises_and_austrian_economics_rothbard.pdf; page 16
</p>
<p><sup>9 <a href="http://mises.org/daily/4034/The-Poetics-of-Spontaneous-Order-Austrian-Economics-and-Literary-Criticism"/></sup>See http://mises.org/daily/4034/The-Poetics-of-Spontaneous-Order-Austrian-Economics-and-Literary-Criticism; Section IV</p>
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		<title>Informal Fallacies</title>
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		<pubDate>Mon, 20 May 2013 20:43:24 +0000</pubDate>
		<dc:creator>Mark</dc:creator>
				<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://critical-thinker.net/?p=2118</guid>
		<description><![CDATA[<p>Have you ever heard of begging the question?  Here is an example, &#8220;When are you going to stop beating your wife?&#8221;  Here is another, &#8220;When did the President know that the IRS was targeting conservative groups?&#8221;  The fallacy lies in the assumption that you are beating your wife or the IRS targeted conservative groups.  Perhaps the assumptions will prove true but the key word here is &#8216;prove&#8217;.  I have even heard <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2118">Informal Fallacies</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=0f0baa61ce120f30c65770c1c71a0f95&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>Have you ever heard of begging the question?  Here is an example, &#8220;When are you going to stop beating your wife?&#8221;  Here is another, &#8220;When did the President know that the IRS was targeting conservative groups?&#8221;  The fallacy lies in the assumption that you are beating your wife or the IRS targeted conservative groups.  Perhaps the assumptions will prove true but the key word here is &#8216;prove&#8217;.  I have even heard the NBC Nightly News, MSNBC Chris Mathews and the local NBC affiliate 9News, with Republican pundit and anchor Kyle Clark, freely use this phrase as if the targeting was a given and the only thing left to do was to find out who knew what when.  However, listening to the actual testimony of IRS officials involved in the incident, it is no way apparent that any apologies have been given for &#8220;targeting&#8221; conservatives.  Yes, apologies have been given for poor customer service and misguided attempts for work efficiency at the IRS but no acknowledgement of &#8220;targeting&#8221; conservatives, cover ups and White House or high official&#8217;s involvement.  The Republicans at the recent Ways and Means Committee hearing was unabashedly insulting and vicious to Steven Miller, the civil servant that is the temporary head of the IRS who was not even in that position when the alleged incidents occurred…a Republican was.  The right&#8217;s rush to judgment and vigilantes frenzy may play well to their base but does not go very far in endearing themselves to voters with less righteous indignations.
</p>
<p>Of course the calculation, if indeed it is that cerebral, is that &#8216;everyone&#8217; hates the IRS and is more inclined to jump in with a &#8220;hang um high&#8221; mob.  Well I, for one, do not hate the IRS.  Why?  I have always paid my fair taxes and have nothing to hide or apologize for.  I am one of those people that could care less if big brother is tapping my phone because, again, nothing to hide…having a clear conscience is a terrific feeling.  I do not need to manufacture a bogeyman government to satiate a guilty conscience or justify myself.  I find it amazing that so-called patriots could hate the government unless they have something to hide.  Perhaps they don&#8217;t have anything to hide but then, why put yourself through all those paranoid hoops if you are four-square and willing to play by the rules?  The IRS is doing a necessary job just as taxpayers are doing their jobs by paying their fair share for all the services they get from the government.  There used to a conservative maxim that you don&#8217;t get something for nothing.  How many conservatives would really be happy with a true do-nothing Federal Government?  Ah, but some loudly proclaim, that is what the Federal Government is…some even go so far as to claim that that is what the Federal Government is by definition.
</p>
<p>In my opinion, the zealots that proclaim this loudly are spoiled brats.  I think the old line conservatives would agree.  These <em>nuevo</em> conservatives are not your father&#8217;s conservative party.  They are chronic complainers and blamers that appear to need an alter ego to maintain their fragile identities.  No one wants waste and corruption but universal pronouncements about large government do not address waste and corruption as much as fallaciously assume large government must have some intrinsic evil.  Small government, large government, small business, large business, any human organization, is capable of waste and corruption.  There is no intrinsic essentialism in government that is bent towards the diabolic.  Those that feed this bias in their constituents are playing and manipulating voters for their own ambitious reasons.  The media plays into these sensationalisms for its own financial advantage not for any ideological reasons.  Consumers and voters are at the receiving end of these over dramatized power plays and are really the only ones that can achieve a critical balance or become the puppets of those full of sound and fury signifying nothing and, in the end, fall prey to only a tale told by an idiot.</p>
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		<title>How much is too much?</title>
		<link>http://feedproxy.google.com/~r/CriticalThinkingApplied/~3/FH4DORfpBk8/</link>
		<comments>http://critical-thinker.net/?p=2114#comments</comments>
		<pubDate>Fri, 17 May 2013 16:23:11 +0000</pubDate>
		<dc:creator>Mark</dc:creator>
				<category><![CDATA[Uncategorized]]></category>

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		<description><![CDATA[<p>Steven Miller, the Deputy Commissioner and Acting Commissioner of the IRS, is testifying before the Ways and Means Committee today regarding what the Republicans are terming &#8220;targeting of conservative groups&#8221; for the 501(c)(4), tax-exemption.  Here are a couple things I learned.  Steven Miller is not a politically appointed Commissioner.  Apparently, the Commissioner is a politically appointed position.  Miller was a Deputy Commissioner which means he is a civil servant.  In other <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2114">How much is too much?</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=0f0baa61ce120f30c65770c1c71a0f95&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>Steven Miller, the Deputy Commissioner and Acting Commissioner of the IRS, is testifying before the Ways and Means Committee today regarding what the Republicans are terming &#8220;targeting of conservative groups&#8221; for the 501(c)(4), tax-exemption.  Here are a couple things I learned.  Steven Miller is not a politically appointed Commissioner.  Apparently, the Commissioner is a politically appointed position.  Miller was a Deputy Commissioner which means he is a civil servant.  In other words, he worked up through the ranks.  He is a career employee.  The last real Commissioner, Douglas Shulman, was appointed by President Bush and served from March 24, 2008 until Nov, 9, 2012.  He was the Commissioner during the alleged &#8220;targeting&#8221; incidents.  The Commissioner before that was Mark Everson.  He also appointed by President Bush and served from May 1, 2003 to May 28, 2007.  It interesting to note that Shulman retired just three days after President Obama won re-election.  However, he did serve during President Obama&#8217;s first term.  I don&#8217;t know why he retired three days after President Obama won but might it be taken as a show of protest to Obama&#8217;s re-election or just a quick out to avoided getting fired or perhaps nothing to do with the election at all but I really doubt that a Bush appointee would be very happy with a Democrat winning the Presidency again.  In any case, I have yet to hear how a Bush appointee would be &#8220;targeting&#8221; conservative groups.  Do sane folks really think that Obama could pull off this kind of feat?  This sounds like yet another case of the Republican Party eating their own in their feeding frenzy to take down Obama and win seats in 2014.
</p>
<p>I watched some of the hearings to try to understand how Steven Miller might be approaching this issue.  First, he believes he told the truth, when he previously testified to the same committee, even though Republicans were basically calling him a liar today.  He stated that the issue he was dealing with at that time and what he thought the previous hearing was about was processing specific applications for 501(c)(4) status of some conservative groups not any internal lists the IRS used to direct claims to specialized agents.  He stated he was not aware of any specialized agents that were given orders to deny 501(c)(4) status to tea party groups.  Apparently, he was aware of organizational methods the IRS used to direct applications to special agents.  Apparently, this is common procedure.  Imagine if you were a boss and you had to come up with ways to organize 70,000 501(c)(4) applications with only 200 agents that could handle this type of thing.  These are the numbers that Seven Miller cited today.  The first thing you would do if you had a database is try to sort the applications electronically by key words.  You might have one agent that specialized in tea party or conservative group applications because they would gain knowledge and experience in that particular area that they could use on new applications.  You would also have some applications that would go through without further investigations and some that would get flagged for further, personalized attention.  You would be looking for scams and frauds that the IRS regularly deals with.  Based on previous experience you might have developed some buzz words on the application that would cause the computer to flag it to a specialized agent.  So why would it take 2 or 3 years sometimes to process an application?  Well, 70,000 divided by 200 is 350 applications on average that one person must approve or deny.  It is not so hard to imagine that common data processing techniques that I have described would have to be used.  However, let&#8217;s take a step back.
</p>
<p>If you were an employee and you were told that your job was to approve or deny 350 applications on average for tax-exempt status, would it cross your mind that your employer was severely understaffed?  Would your boss also have an inkling about this?  Could it be that your boss may have taken this understaffing issue to his boss and received the answer that we do not have enough money to hire more people?  In the case of the IRS, it is feasible that Congressional appropriations would be the limiting factor.  What if you were Secretary of State and were responsible for multiple embassies around the world?  What if, again, you were denied funds for maintaining adequate security for all the embassies?  Personally, I think the only appropriate thing to do would be to close down the embassies until and if Congress decided to make the funds available to adequately protect them.  I also think the IRS should refuse to process more applications for 501(c)(4) status than they can realistically handle.  If political bureaucrats would refuse to do the impossible without appropriate funding of their agencies we would have a lot of squeaky wheels out there that would need oiling.  Then, the American people would have to decide if they want to keep cutting government spending or have a functioning government.  This is where the battle needs to take place.  Unfortunately, when department heads keep saying we will do more with less they are enabling the demise of the government while preserving their careers and not making waves.  I believe we need more intestinal fortitude to force these issues to a head. When filibustering was allowed to happen in the silence of Senate backrooms, the squeaky wheels went away while the government was coming off the rails.  We need folks in these positions to take public stands, wear out their welcome, and allow the electorate to make their decisions about whether or not they want these politicians to stay in office.  At what level of pain will the electorate cry uncle?  We need to find out.  The French have a word particularly biting to moderates (or blue dogs) in politics that allow untenable situations to continue and thrive in government – bourgeoisie.  I do not think there is any big bad political wolf behind the IRS issue only government that has over-reached their funding level and kept their mouths shut.
</p>
<p>Additionally, the numbers that were cited in the meeting today of denied claims and approved claims seemed to fall fairly evenly between conservative and liberal groups.  Conveniently, this side of the story has not been told.  Also, these kinds of incidents occurred during the Bush administration with the NAACP and other left leaning groups.  One comment was made today that these issues have been going on for a long time and that the real culprit is badly legislated laws concerning C4s.  The law really is a mess.  It has been chipped away so much that we should either give C4 status to any applicant OR have very strict and well defined rules about who can quality.  Bad laws and bad court decisions create these kinds of situations…I am reminded of Citizens United.   Again, when we try to please everyone for everything we only do a disservice to everyone and everything.  We need more chutzpah from our elected leaders and willingness to take the heat for better or worse for them personally.  Personally, I think it is inevitable that the American people will have to decide when the pain stops and what kind of people they send to Congress…BUT first, they have to feel the pain enough and in large enough numbers to throw the bums out and get a Congress that can do something besides show their ass all the time.  Anti-government hate will not solve the problem; only a proactive electorate.  Patriots do not hate their government.  I think that is the domain of terrorists and thugs.  </p>
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		<title>Getting to the Real Issues</title>
		<link>http://feedproxy.google.com/~r/CriticalThinkingApplied/~3/vZQvDMhPflg/</link>
		<comments>http://critical-thinker.net/?p=2110#comments</comments>
		<pubDate>Wed, 15 May 2013 17:01:37 +0000</pubDate>
		<dc:creator>Mark</dc:creator>
				<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://critical-thinker.net/?p=2110</guid>
		<description><![CDATA[<p>Underneath all the cloak and dagger of politics, there are real issues that all too often get covered over by the latest political drama.  The maddening thing about all this is that nothing seems to get resolved.  It just appears that every action gets a reaction.  Perhaps the laws of physics are perpetually reaffirmed but this type of dynamic which generates heat and entropy in the system.  Perhaps the manifestation of heat <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2110">Getting to the Real Issues</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=0f0baa61ce120f30c65770c1c71a0f95&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>Underneath all the cloak and dagger of politics, there are real issues that all too often get covered over by the latest political drama.  The maddening thing about all this is that nothing seems to get resolved.  It just appears that every action gets a reaction.  Perhaps the laws of physics are perpetually reaffirmed but this type of dynamic which generates heat and entropy in the system.  Perhaps the manifestation of heat is chaos and knee jerk reactions that end up hating the government and becoming paranoid about the evil genius that is the ghost in the machine of absolute power.  Fox news has made a lot of money propagating this tragic drama.  Unfortunately, the electorate has demonstrated more of a propensity for loving the manufactured lie than digging into the pesky details, the anomalies that call for thought and wisdom.  What is it that calls for resolution and solutions?  The answer that political chaos calls for is not eternal, emotional vigilantism or otherworldly cynicism for this world but principles that address justice.  We all come to this calling with historical deficiencies and biases that easily derail and confuse us.  In any case, this is the situation the Founding Fathers faced even with their advantage over us as the most highly, liberally educated scholars of their day.  However, we are, as they were, constrained to try to answer the questions of our day, to heed an inner necessity for a yet to be determined justice.  Cynicism is always snapping at our heels and tempts us to yield to hate, fear and apathy.  Apathy is most seductive and can take many forms.  Apathy absolves us from responsibility from &#8216;my&#8217; call for resolution, for solution, for justice.  Apathy is the <em>lassie faire</em> of the rabble; let the market decide, not me.  However, capitalism is not about passivity but production and action from the individual.  It is unfortunate that a long history of economic reductionism has lost the connection to personal responsibility to heed the call for justice as what is most noble in human production.  Our understanding of what it means to &#8216;be&#8217; has taken on a certain stubborn, habitual embedded-ness to a metaphysic of materiality and its antithesis, spirituality.  Body and soul, accident and substance, no-thing and thing, mortal and divine have split us into fragments, historical pieces of our call to &#8216;be&#8217;, to do justice in spite of our overwhelming injustices.  The face of every child, every victim of suffering continually calls for remembrance and reawakens us to our personal and absolute responsibility for justice, response and answer. Let&#8217;s take a few concrete, current examples of how this gets worked out in our politics.
</p>
<p>The far right can concoct conspiracies and vile governmental demons in a vacuum but now oxygen has been heaped on their delusions in the form of the phantasmal IRS scandal, the Benghazi attack and the Associated Press surveillance.  Let&#8217;s refresh our convenient short term memories and see if a need for an unanswered question arises.
</p>
<p>After 911 many folks had a burning desire for vengeance that fueled a political fire for two wars, Guantanamo and the Patriot Act.  The cost of the wars and effect on the national debt, the torture of &#8220;war combatants&#8221; and the invasion of personal liberties on U.S. citizens was only met with crickets chirping.  Only a few voices were raised in unpublicized hearings and court cases to counter the onslaught of public aggression.  The government was not evil back then but the arm of the almighty fighting the just war.  The vile liberal laws (which really were not enacted by liberals) that prohibited CIA assassinations and much covert activity were readily dispensed with in the name of hanging the perpetrators high.  The onslaught of drones was welcomed by the chirping crickets.  The call for justice was silenced by the call for revenge at any price.  The CIA could listen in on any calls they wanted including U.S citizens; businesses were not exempt either.  The tax exempt status of immensely funded political machines was given carte blanch for any &#8220;social service&#8221; group including neo-Nazis and the KKK…remember Citizens United, the Wisconsin Right to Life decision, tax exempt status and corporations right to free speech?<sup>1</sup>  Not a chirp was heard from conservatives when all this was working for them.  Did many of us really think through the loss of revenue from these tax exempt groups and whether tax exempt was being unfairly endowed on puppet groups opening the flood gates to political circus and &#8220;targeted groups&#8221; for any organization that did not get tax-exempt status?  Who will be the next targeted &#8220;social service&#8221; group…Serial Killers of America?  Isn&#8217;t more money in politics rust to any iron left in our politicians?
</p>
<p>Now, in the aftermath of impending danger we are left with some nagging questions.  Can segments of our society be interned in various ways as slaves in the early U.S., the Japanese in World War 2, the Islamic community now, and the latest, conservatives in the Tea Party?  Apart from a comedic grand conspiracy of President Obama, how do we justify bias and favoritism in our own calling and personal responsibility for an answer?  We did so in the Bush administration while garbing ourselves in the clothes of the Divine.  Now, our holiness is not so pure and we are left with nagging questions.  Yes, it always easier to devise a devil like President Obama to squelch our conscience but the truth is that we are our own worst, diabolical conspirator.  We setup, welcomed and allowed the conditions for these injustices while the crickets were chirping.
</p>
<p>So, let&#8217;s say we get rid of those unjust, liberal laws that were supposed to protect us against terrorism according to President Bush and Dick Cheney.  Let&#8217;s go back to NOT being able to spy on Americans, intern enemy combatants, water-board terrorists, propagate our clones and keep national security secrets from the American public to protect top secret sources.  Let&#8217;s give every group that wants it tax exempt status.  Let&#8217;s cut the national debt indiscriminately.  When another terrorist attack gets our attention, unemployment goes back to depression levels, everyone&#8217;s pet government handout including Social Security and Medicare gets slashed or eliminated, when we can no longer justify our hypocrisies, we can go back to the silence of crickets chirping and start the whole insane cycle all over again OR we might try to think proactively.
</p>
<p>We may actually have to suffer a little pain to be true to ourselves and our highly praised, Founding Father&#8217;s ideals.  We may have to stop looking for easy, purely reactive indulgences and heed the call for justice even when it hurts us.  We may actually have to live our ideals instead of revering them.  If we, the electorate, reward mindless political thrills we will create a political machine in our own image.  This will not be the image envisioned by the Founding Fathers but a hideous underside that will mock truth and justice.  We need to ask ourselves and settle the issue, are we ok with perceived &#8220;war time&#8221; invasions of privacy?  What are the limits we should not cross in the name of national security?  What are conditions for mass expenditures and waging wars?  What groups do we sanction and what groups do we oppress…gays, Arabs, conservatives, KKK, neo-Nazi, etc. or do we give <em>carte blanch</em> to everyone?  Wisdom and measure is required to think through these issues.  Government institutions are also required to ensure that we enact our collective wisdoms.  The rabble of the market has no indebtedness to enduring wisdom only self satiation.  There is no given goodness to the market only the perpetuation of the war of all against all.  If we are to overcome our injustices we will have to become capitalists of a sort that are personally responsible for justice, which cannot abdicate our debt to the market but only continually answer to ourselves.  We will have to rediscover what human being is, our being and our indebtedness to the other cannot be suffocated by the evil genius we hate or fear, the Great Satan that opposes God, the not-my-problem cop out of apathy.  We must decide, act and live resolutely with the consequences of our desire for justice or shrink back into living oblivion. I hope to explore the depths of these questions more in my upcoming philosophy series.
</p>
</p>
<p>_________________
</p>
<p><span style="font-size:10pt"><sup>1 <a href="http://mixermuse.com/blog/2012/08/08/formalism-when-a-lie-becomes-truth-really/"/></sup>See http://mixermuse.com/blog/2012/08/08/formalism-when-a-lie-becomes-truth-really/<br />
</span></p>
<p><a href="http://benjaminstudebaker.com/2013/05/13/the-irs-tea-party-muddle/">See http://benjaminstudebaker.com/2013/05/13/the-irs-tea-party-muddle/</a>
	</p>
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		<title>Austrian Logic</title>
		<link>http://feedproxy.google.com/~r/CriticalThinkingApplied/~3/n_dVB5OaM6k/</link>
		<comments>http://critical-thinker.net/?p=2095#comments</comments>
		<pubDate>Sat, 11 May 2013 14:48:56 +0000</pubDate>
		<dc:creator>Mark</dc:creator>
				<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://critical-thinker.net/?p=2095</guid>
		<description><![CDATA[<p>Logic, logos in classic Greek, has a kind of intrinsic compulsion; the notion of identity.  Aristotle spent much of his discussion in the Metaphysics1 on the principle of non-contradiction (PNC).  He thought that any claim of knowledge was essentially bound to PNC.  Therefore, knowledge itself is not absolutely relative to personal belief.  It must continually prove itself in the foundry that separates iron from slag, the true from the false.  Truth <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2095">Austrian Logic</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=0f0baa61ce120f30c65770c1c71a0f95&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>Logic, <em>logos </em>in classic Greek, has a kind of intrinsic compulsion; the notion of identity.  Aristotle spent much of his discussion in the <em>Metaphysics<sup>1</sup></em> on the principle of non-contradiction (PNC).  He thought that any claim of knowledge was essentially bound to PNC.  Therefore, knowledge itself is not absolutely relative to personal belief.  It must continually prove itself in the foundry that separates iron from slag, the true from the false.  Truth is never complete but existentially contingent upon contradiction and error.  However, &#8220;It is impossible to hold (suppose) the same thing to be and not to be (Metaph IV 3 1005b24 cf.1005b29–30).&#8221;  If I make a claim that x is universally true then I also make the corollary claim that all particular cases of x will demonstrate the universality of the claim.  Therefore, for example, if I suggest that large government leads to more corruption and am faced with significant examples of large government and less corruption, I must either modify my original universal premise to account for this discrepancy OR give up the claim IF the PNC is given essentially and intrinsically in the identity of universality<sup>2</sup>.  This is not a matter of civility or incivility, opinion or fact, relativity, etc., it must necessarily always come along with any claim of knowledge.  Of course, I agree with Jeff that civility is very important especially in light of the fact that PNC is existentially contingent and no one can lay claim to having arrived finally, teleologically (<em>telos</em>-completion, wholeness and <em>logos</em>), at universal truth.  We are all paupers in the face of the richness of PNC.  Yet, non-contradiction does remain in a non-relative assumption, always already implied every time we make a universal claim.  We can only deny this in bad faith.</p>
<p>Bad faith is a claim to knowledge that violates PNC while maintaining PCN.  As Aristotle stated, something cannot be and not be.  <strong><em>A</em></strong> cannot be both <strong><em>A</em> AND</strong><strong><em> NOT A</em></strong> in any sense without violating PNC.  If identity is taken as a singularity, an ontological (<em>ontos</em>, being, isness) unity then, it cannot be itself and not itself.  This would be nonsense.  Yet PNC is not the whole story.  I will deal with that in my upcoming philosophy series.  However, for now, I would like to take particular example in which the question of PNC is a concern.  Bad faith is what Aristotle would have referred to as a logical fallacy.  Aristotle cited formal fallacies in the form of logical syllogism.  One form of a necessarily, tautologically, true syllogism is:</p>
<p style="text-align: center;">All humans are mortal.</p>
<p style="text-align: center;">All Greeks are human</p>
<p style="text-align: center;"><span style="font-family: Cambria Math;">∴</span> All Greeks are mortal.</p>
<p>The middle term, human, establishes an identity between the major term, mortal, and the minor term Greeks and, on the basis of this identity, truthfully concludes that the major term and the minor term are identical in the universal sense of Greeks and mortality.  They are bought together under the rubric of the same (mortality applies to all Greeks).  This is necessarily so or tautologically true.  If I maintain that,</p>
<p style="text-align: center;">All large governments are over regulated</p>
<p style="text-align: center;">All over regulation (necessarily leads) to corruption</p>
<p style="text-align: center;"><span style="font-family: Cambria Math;">∴ All large governments are corrupt<br />
</span></p>
<p style="text-align: center;">&nbsp;</p>
<p>the existential fallacy here would be demonstrated by use of the terms &#8220;all&#8221; and any particular case that could be cited in which the conclusion is false.  The way to fix this argument would be to make a contingent claim by replacing &#8220;all&#8221; with &#8220;some&#8221;.  However, to maintain a universal generalization it must include existence as a necessary component of the &#8220;universal&#8221;.  Another way to avoid contradiction would be to qualify what &#8220;large&#8221; is such that we are not referring to a linear relationship of ever larger governments and corruption but some critical mass wherein the stated universal relationship to corruption applies.  Additionally, to simultaneously cite data that both proves and contradicts the conclusion, the universality of the claim, is a bad faith argument.  Perhaps another way to avoid this would be to question the validity of the existential data but that cannot be laid hold of if one maintains the veracity of the data in some cases and not in other cases (using the same criteria for establishing the data as &#8220;true&#8221;).</p>
<p>There is another particular form of a bad faith argument that I really want to address, more as an imposing question, than a proven case.  In order to do this I will put it in its most radical form.  If I maintain that public debt is not a stimulus and economic stabilizer over the long run but a recipe for endless boom and bust WITH a correlation of the magnitude of public debt to the magnitude of the boom and the bust then we have a recent existential example that should at least pose a valid question.  How is it that Europe and the European Central Bank (ECB) which has followed a policy of public frugality and reduction of public debt has seen higher unemployment and social upheaval while the US which has pursued a more Keynesian route, using the Federal Reserve to stimulate the economy with more public debt in the form of public bonds, has seen a lower unemployment rate and economic recovery?</p>
<p>It seems to me that one way to address this by the Austrians would be to appeal to an order of magnitude in which the correlation occurs that is not linearly related as in the previous example (magnitude of public debt to bust).  Historical examples would be more pertinent in this tact.  Another fallacious way to address the issue is to perpetually push off the final proof of this to the future.  In other words, the BIG bust will come and that will prove our case.  If a small bust would occur, even for a very large public debt, then the claim to correlation with magnitude of public debt and magnitude of bust could not be claimed as &#8220;universal&#8221; but perhaps only contingent.  A non-correlation to magnitude of public debt to economic calamity is tantamount to saying nothing about public debt.  There will always be larger and smaller economic busts at some point in the future unless one is a utopist.  In order to draw a conclusion it must have a universal quality that is shown in the micro-economic, existential case.  In fact, all historical existential cases must prove the case and not defer the case to an ever looming future.</p>
<p>I know the Great Depression has been the subject of much revisionism but the policies of FDR and the World War did greatly increase public debt and there was a recovery that followed this expenditure.  It was not public austerity that was the catalyst for the recovery.  Austerity prolonged the Great Depression and created unemployment and soup lines.  Economic stimulus appears to have been a necessary and historically accompanying factor that changed impoverishment to recovery.  Please note that I am not recommending throwing tax payer dollars indiscriminately at an economic crisis but selectively using the advantages of public resources to create jobs and build infrastructure as a historically proven stimulus when the private sector is imploding economically.    I am aware of how the Austrians process the lessons of the Great Depression but am not convinced by their arguments yet.  It appears to me to be a bit of revisionist history but I would not argue that all history may be essentially revisionist as Marx and Nietzsche noted.</p>
<p>Aren&#8217;t we seeing the same thing today with real world examples of Europe and the US?  Here we have two different economic philosophies in concurrent existential laboratories and the apparent winning philosophy seems to be on the side of the Keynesians.  I know we can make the claim that the big bust is coming and scare the bejesus out of everyone as they prep for the apocalypse but that may only be a futile exercise of an overactive amygdala<sup>3</sup> and not a claim to universal knowledge.  If existential import is minimized, denied or put off indefinitely, the claim can only remain as hypothetical and not a claim of knowledge.</p>
<p>In any case, it does appear to me that this subject has gotten bogged down in the endless &#8216;circle of hermeneutic&#8217; discussions where evidence remains in the eye of the beholder and not in the logical claims that either hold up to their universality OR become a continent claim that may or may not be the case.  It is the &#8220;faith&#8221; part of Austrian economics that appears to get cloaked in endless interpretation and apocalyptic vision that is a disservice to the logical truth claims against macroeconomic, brute historical results.  It is as if we are all Alice in the rabbit hole trying to decipher if what we see is a big or small Armageddon while holding a tea party to debate the intimacies of our upcoming oblivion.  If we separate and isolate the logic of the claims to see if they are contradictory in themselves we may get further than endlessly &#8220;re-stating&#8221; the claims to obfuscate and diminish the universality the Austrian school is trying to lay hold of in economic theory.  As such, I would love it if someone could provide a relatively simple argument that does not appeal to the true, complicated, scholarly arguments that take years to understand and merely highlight the logical principles of the Austrian school that cannot be diminished without losing its integrant veracity to itself.  I am not asking for over-simplification, only logical arguments that do not get lost to further &#8220;clarifications&#8221;.</p>
<p style="text-align: center;">&nbsp;</p>
<p style="text-align: center;">_________________</p>
<p><sup>1 <a href="http://plato.stanford.edu/entries/aristotle-noncontradiction/">See link: http://plato.stanford.edu/entries/aristotle-noncontradiction/</a></sup></p>
<p><sup>2 <a href="http://critical-thinker.net/?p=1929%23comments">See link: http://critical-thinker.net/?p=1929#comments</a></sup></p>
<p><sup>3 <a href="http://critical-thinker.net/?p=1074">See link: http://critical-thinker.net/?p=1074</a></sup></p>
<p style="text-align: center;">&nbsp;</p>
<p style="text-align: center;">_________________</p>
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		<title>Some Civility Quotes</title>
		<link>http://feedproxy.google.com/~r/CriticalThinkingApplied/~3/pQOoMcvQ7HQ/</link>
		<comments>http://critical-thinker.net/?p=2088#comments</comments>
		<pubDate>Thu, 09 May 2013 13:27:13 +0000</pubDate>
		<dc:creator>Jeffrey Ellis</dc:creator>
				<category><![CDATA[civility]]></category>
		<category><![CDATA[Politics]]></category>

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		<description><![CDATA[<p>&#8220;Respecting others’ opinions doesn’t mean being untrue to our own.&#8221; &#8212; P.M. Forni</p>
<p>&#8220;It’s too much to expect in an academic setting that we should all agree, but it’s not too much to expect discipline and unvarying civility.&#8221; &#8212; John Howard</p>
<p>&#8220;For me, politeness is a sine qua non (without which there would be no) of civilization.&#8221; &#8212; Robert A. Heinlein</p>
<p>&#8220;Politeness is the art of choosing among one’s real thoughts.&#8221; &#8212; Adlai Stevenson II</p>
<p>&#8220;So let us begin anew <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2088">Some Civility Quotes</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=457f4680427a2ef79dc4631f94ec3b8b&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><blockquote><p>&#8220;Respecting others’ opinions doesn’t mean being untrue to our own.&#8221; &#8212; P.M. Forni</p>
<p>&#8220;It’s too much to expect in an academic setting that we should all agree, but it’s not too much to expect discipline and unvarying civility.&#8221; &#8212; John Howard</p>
<p>&#8220;For me, politeness is a sine qua non (without which there would be no) of civilization.&#8221; &#8212; Robert A. Heinlein</p>
<p>&#8220;Politeness is the art of choosing among one’s real thoughts.&#8221; &#8212; Adlai Stevenson II</p>
<p>&#8220;So let us begin anew &#8211; remembering on both sides that civility is not a sign of weakness, and sincerity is always subject to proof.&#8221; &#8212; John F. Kennedy</p>
<p>&nbsp;</p></blockquote>
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		<title>Apologies for absence</title>
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		<pubDate>Sat, 23 Mar 2013 12:20:02 +0000</pubDate>
		<dc:creator>Lorenzo</dc:creator>
				<category><![CDATA[History]]></category>
		<category><![CDATA[Law]]></category>
		<category><![CDATA[Liberty]]></category>
		<category><![CDATA[Media]]></category>
		<category><![CDATA[Policy]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Abraham Lincoln]]></category>
		<category><![CDATA[Lincoln the movie]]></category>

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		<description><![CDATA[<p>The combination of the Melbourne heatwave, being very busy at work (having to get up a 5.30am in the morning to beat the traffic then doing a full day&#8217;s presentation teaching takes it out of me) and an obsessive writing project have meant I have not been around much.  Apologies for that. When I have been, it has mainly to fill the spam bin.  In the war between spammers and spam-blockers, the spammers are clearly currently <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2065">Apologies for absence</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=668751016e54cb9081950a237307ccd1&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>The combination of the Melbourne heatwave, being very busy at work (having to get up a 5.30am in the morning to beat the traffic then doing a full day&#8217;s presentation teaching takes it out of me) and an obsessive writing project have meant I have not been around much.  Apologies for that. When I have been, it has mainly to fill the spam bin.  In the war between spammers and spam-blockers, the spammers are clearly currently ahead. Apparently, praising one&#8217;s format/choice of blogging platform/blogging content is part of the successful spammer&#8217;s armoury.</p>
<p><a href="http://skepticlawyer.ozblogistan.com.au/files/2013/03/lincoln_1.jpg"><img class="alignleft" src="http://skepticlawyer.ozblogistan.com.au/files/2013/03/lincoln_1-1024x613.jpg" alt="lincoln_1" width="430" height="258" /></a></p>
<p>I did manage to get to see <a href="http://www.imdb.com/title/tt0443272/?ref_=sr_1" target="_blank"><em>Lincoln</em></a>, which I enjoyed immensely. Intelligent films about politics, such as this Daniel Day Lewis vehicle, is a form of cinematic crafting that I particularly enjoy. At least one professor of American history has announced he is going to use it <a href="http://www.guardian.co.uk/film/2013/jan/28/american-history-professor-on-lincoln" target="_blank">as a teaching aid</a>, which seems entirely reasonable.</p>
<p><em>Lincoln</em> manages to be at once uplifting about the possibilities of politics and wryly cynical about its processes. The <a href="http://en.wikipedia.org/wiki/Thirteenth_Amendment_to_the_United_States_Constitution" target="_blank">Thirteenth Amendment</a> is portrayed as being (narrowly) passed by a mixture of base political manouevring, blatant use of the patronage powers of the Presidency and simple persuasion. (I was also amused that Hollywood did a movie where the Republicans were the good guys and Democrats the bad guys.) Democracy as <a href="http://www.quotationspage.com/quote/1226.html" target="_blank">government by discussion</a> is well on display.</p>
<p>But even the most blatant vote-buying displayed for our cinematic enjoyment is for the noblest of purposes&#8211;abolishing slavery, definitively and without evasion. That it was nearly de-railed by another worthy cause&#8211;ending the bloodiest war in American history&#8211;is also part of the stuff of politics, which is rarely a competition between good and evil but often one between rival goods. (And occasionally one between rival evils; that is the <a href="http://www.amazon.com/Bloodlands-Europe-Between-Hitler-Stalin/dp/0465002390" target="_blank">enormous tragedy</a> of the <a href="http://en.wikipedia.org/wiki/Eastern_Front_(World_War_II)" target="_blank">Eastern Front</a> during the <a href="http://en.wikipedia.org/wiki/World_War_II" target="_blank">Dictators&#8217; War</a>.)</p>
<p>As Legal Eagle recently <a href="http://skepticlawyer.com.au/2013/02/21/apologies/" target="_blank">pointed out,</a> serious blogging is a time-consuming activity. It also takes energy and cognitive effort. Lacking spare amounts of the former and having the latter very focused on a specific writing task has left me little time for blogging. I am hopeful that the onset of the school holidays will see a bit more time for the latter. But writing will (hopefully) being taking up more of my time than it has, so no strong promises are being entered into.</p>
<p>&nbsp;</p>
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		<title>Value and ambit</title>
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		<pubDate>Wed, 13 Feb 2013 21:11:06 +0000</pubDate>
		<dc:creator>Lorenzo</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[History]]></category>
		<category><![CDATA[Policy]]></category>
		<category><![CDATA[Chartalism]]></category>
		<category><![CDATA[George Knapp]]></category>
		<category><![CDATA[MMT]]></category>

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		<description><![CDATA[<p>As economist Frank Mehrling has observed (pdf):</p>
<p>All monetary theories (at least all those of which I am aware) build from some underlying parable about the nature of money.</p>
<p>One such parable is money as pure creation of the state, or Chartalism. Its original texts are George Knapp&#8217;s The State Theory of Money (pdf), which I have waded my way through&#8211;I don&#8217;t recommend the experience; Knapp takes Germanic confusion of taxonomy with analysis to ludicrous heights&#8211;and two articles by Alfred Mitchell <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2040">Value and ambit</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=668751016e54cb9081950a237307ccd1&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p>As economist Frank Mehrling <a href="http://cas.umkc.edu/economics/people/facultyPages/wray/courses/Econ601%202012/readings/Mehrling%20Fiat.pdf" target="_blank">has observed</a> (pdf):</p>
<blockquote><p>All monetary theories (at least all those of which I am aware) build from some underlying parable about the nature of money.</p></blockquote>
<p>One such parable is money as pure creation of the state, or <a href="http://en.wikipedia.org/wiki/Modern_Monetary_Theory" target="_blank">Chartalism</a>. Its original texts are George Knapp&#8217;s <em><a href="http://socserv.mcmaster.ca/econ/ugcm/3ll3/knapp/StateTheoryMoney.pdf" target="_blank">The State Theory of Money</a> </em>(pdf), which I have waded my way through&#8211;I don&#8217;t recommend the experience; Knapp takes Germanic confusion of taxonomy with analysis to ludicrous heights&#8211;and two articles by Alfred Mitchell Innes, particularly his 1913 <a href="https://www.community-exchange.org/docs/what%20is%20money.htm" target="_blank"><em>What is Money?</em></a></p>
<p>Modern Monetary Theory (MMT) is what Chartalism has evolved into. Wikipedia summarises the central claim of MMT as:</p>
<blockquote><p>money enters circulation through government spending; <a title="Taxation" href="http://en.wikipedia.org/wiki/Taxation">Taxation</a> is employed to establish the <a title="Fiat money" href="http://en.wikipedia.org/wiki/Fiat_money">fiat money</a> as currency, giving it value by creating demand for it in the form of a private tax obligation that can only be met using the government&#8217;s currency. An ongoing tax obligation, in concert with private confidence and acceptance of the currency, maintains its value.</p></blockquote>
<p>This expresses very nicely the confusion at the heart of MMT: mistakenly holding that answering the very important question of what is the <em>ambit</em> of money (which transactions it can be used for) will provide some sort of answer to the question of what is the <em>value</em> of money (what are its swap values, its rates of exchange for goods and services). The problem is the ambiguity in the word &#8216;value&#8217; between, in this case, being swappable <em>at all</em> and specific swap values.</p>
<p>A <a href="http://uneasymoney.com/2013/02/04/two-reviews-one-new-one-old/#comment-13810" target="_blank">comment</a> at one of my favourite <a href="http://uneasymoney.com" target="_blank">economic blogs</a> crystallised this confusion nicely:</p>
<blockquote><p>Crazy as it sounds, taxes do not collect revenue for the government. They can’t because the government has to spend its money first to collect any taxes at all. Taxes ensure that the arbitrary, intrinsically worthless thing it spends is accepted.</p>
<p>This is based on historical record too: many times in ancient and recent history governors of subjugated lands would impose a tax payable in money only they possessed (eg the French in Madagascar – France wasn’t trying to raise francs in Madagascar that had none!) to ensure that local population accepts the thing in exchange for labor and goods.</p></blockquote>
<div class="wp-caption alignright" style="width: 501px"><a rel="attachment wp-att-18700" href="http://critical-thinker.net/?attachment_id=18700"><img src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/moast-view-of-angkor-wat-1024x523.jpg" alt="" width="491" height="251" /></a><p class="wp-caption-text">Angkor Wat: a little something to keep the peasants busy in the off-season</p></div>
<p>The commenter is correct in that colonial governors in places which did not already have money did levy taxes in money to get people to start using money. But it is entirely possible for a state to collect taxes without money. It can levy labour-service (as Pharaonic Egypt or the <a href="http://en.wikipedia.org/wiki/Khmer_Empire" target="_blank">Khmer Empire</a> did–that is how the Pyramids, <a href="http://en.wikipedia.org/wiki/Angkor_Wat" target="_blank">Angkor Wat</a>, etc got built) or in-kind tribute or some combination thereof.</p>
<p>In fact, that is why, I would argue, that labour-service empires were so addicted to gargantuan building projects. Labour service has a use-it-or-lose-it nature, you cannot store it up for the future. So rulers found things for the labour to be used on; things that they decreed, thereby exercising control in their construction. Otherwise, someone else could have found use for that labour service and the ruler&#8217;s own labour-service claims could atrophy. The edifices constructed by said labour-service are statements of power; but far more so was the (continuing) control over the labour that built them in the first place.</p>
<div class="wp-caption alignleft" style="width: 342px"><a rel="attachment wp-att-18703" href="http://critical-thinker.net/?attachment_id=18703"><img src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/101226043022Angkor-Wat-temple.jpg" alt="" width="332" height="232" /></a><p class="wp-caption-text">And when they finished this, they moved on to the next project</p></div>
<p>If, however, the state wants to collect taxes in money, then the state first has to make sure that there is money in circulation. The above commenter, in citing the colonial cases, is confusing establishing the <em>form</em> in which taxes are levied with <em>the actual extraction of income</em>.</p>
<p><strong>What is money?<br />
</strong>Something is money if it is used in transactions, not for its production or consumption utility, but because it can be used in further transactions. So, something is money if it has, and is money to the extent it has, <em>transaction utility</em>. Transaction utility has two parts to it. One is the <em>swap value</em> of the money.  How much money has to be used to purchase a given item. The (weighted) average of all such swap values for goods and services is the <a href="http://en.wikipedia.org/wiki/Price_level" target="_blank">price level</a>.</p>
<p>Swap values, being the price(s) of money in terms of goods and services (the price of money in money terms is itself), are generated by supply and demand. In the pure <a href="http://en.wikipedia.org/wiki/Fiat_money" target="_blank">fiat money</a> systems we use (by which I mean money in the form of otherwise largely valueless tokens not convertible into any real asset), said supply and demand is how much money is being transacted for how many goods and services. (Not, one notes, the amount of money in <em>existence</em> but the amount of money in <em>circulation</em>, in the sense of being transacted for goods and services).</p>
<p>In a <a href="http://en.wikipedia.org/wiki/Gold_standard" target="_blank">gold standard</a>, where any note can be exchanged for a given amount of gold, the price level is determined by how much monetised gold is backing how much output&#8211;the price of gold sets the underlying price level. (Similarly with silver in a<a href="http://en.wikipedia.org/wiki/Silver_standard" target="_blank"> silver standard</a>; historically, silver has been a much more widely used monetary metal than gold&#8211;though usually as coins rather than as backing for notes.) With <a href="http://en.wikipedia.org/wiki/Commodity_money" target="_blank">commodity money</a>, swap values are determined by supply and demand for the commodity, with some premium for transaction convenience if the commodity has been suitably branded, such as being turned into coins. (A thousand years ago, all money was commodity money; <a href="https://78462f86-a-72f560ac-s-sites.googlegroups.com/a/drorgoldberg.com/www/comment_on_sylla.pdf?attachauth=ANoY7cpUxP9GAStKqbFzaDRzaA87TMskGs0ijYFOZ8CdVOaagwVoxtWjYxJ2HbjH0j5wsCSJMh3CwyE8LGvi0595BEpNVXQIkbAtJYT2orSUs-xMigs4AmNy14mMorHU470_5wCdQmnSELiks7iTjDbkBXpEGf5PsL2uzCvIAeU8g2IjDC9anE_BOcyO4euwb9ewkjoqpsuEpL_yF-lq7b6JwzkE8sLZzQ%3D%3D&amp;attredirects=0" target="_blank">now none</a> of it is.)</p>
<p>Said branding provides a face value or <em><a href="http://en.wiktionary.org/wiki/tale" target="_blank">tale</a></em>, a standard content and a transaction context. In our fiat money systems, the content is about the coin or note being authentic, being issued by who its face claims it to be issued by. In commodity money systems, it is having a certain amount of the underlying commodity. Being not counterfeit means being <a href="http://en.wikipedia.org/wiki/Legal_tender" target="_blank">legal tender</a>, so having a certain guarantee of transaction utility (and convertibility, if that is part of the monetary system). In commodity money systems, having a given amount of the underlying commodity provides its own guarantee of transaction utility, in that you can swap it out at the price of the commodity. If the transaction premium is positive, it will not get swapped out.  If it is negative (i.e. the price of the commodity-content is above the price-as-money), then it will. Such as having 50c coins with <a href="http://en.wikipedia.org/wiki/Australian_round_fifty-cent_coin" target="_blank">more than</a> 50c of silver in them.</p>
<p><strong>Ambit claims</strong><br />
As for transaction context (who issued the coin and where their writ runs), that is where the question of <em>ambit</em>, of the range of transactions over which a given money is acceptable, comes in. Each money has a <em>currency realm</em>, the range of transactions for which it can be used. The supply and demand setting the swap values of money is a matter of which output operates within which currency realm.</p>
<div class="wp-caption alignright" style="width: 237px"><a rel="attachment wp-att-18709" href="http://critical-thinker.net/?attachment_id=18709"><img src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/dollarbill.jpg" alt="" width="227" height="206" /></a><p class="wp-caption-text">A very successful export</p></div>
<p>A major complication here is that <a href="http://en.wikipedia.org/wiki/Exchange_rate" target="_blank">exchange rates</a> (official or unofficial) connect moneys to each other. If one has a national money&#8211;call it US$&#8211;which is easily exchanged for local moneys elsewhere, then it may be acceptable in transactions in many countries. Particularly in countries where the local currency is less trusted (such as a <a href="http://en.wikipedia.org/wiki/Store_of_value" target="_blank">store of value</a>) than US$. This more widely acceptable money&#8217;s currency realm will therefore extend well beyond its national borders. It has been estimated that <a href="http://www.investopedia.com/articles/07/unofficial_dollarization.asp#axzz2K6TKwymH" target="_blank">somewhere in the vicinity</a> of 40-60% of US currency circulates outside the US.</p>
<p>In that situation, the US$ acts somewhat like gold in a goldzone; as a monetized store of value <a href="http://en.wikipedia.org/wiki/International_use_of_the_US_dollar" target="_blank">acceptable across</a> currency realms. The similarity may go deeper; it has been very reasonably argued that a surge in demand for the premier global reserve currency not matched by increased supply <a href="http://marketmonetarist.com/2012/05/11/international-monetary-disorder-how-policy-mistakes-turned-the-crisis-into-a-global-crisis/" target="_blank">was a major cause</a> of the Great Recession.</p>
<p><strong>Explaining ambit<br />
</strong>Explaining why things have production or consumption utility is not difficult.  How do we explain the crucial second part of transaction utility; the range of monetised transactions? That money has transaction utility at all, based on the confident expectation of use in <em>future</em> transactions. Particularly for moneys&#8211;such as printed notes not convertible into say gold or silver on demand&#8211;which have no other significant value. Whose transaction premium is such a large part of their swap value.</p>
<p>Obviously, it is very convenient to have something which can be used across many transactions. In Ancient Mesopotamia, contracts where written that specified payment in <em><a href="http://en.wikipedia.org/wiki/Shekel" target="_blank">shekels</a></em> of barley, wheat or silver. <a href="http://en.wikipedia.org/wiki/Unit_of_account" target="_blank">Units of account</a>, such as the <em>shekel</em>, were often originally weights (such as the pound, originally the <a href="http://en.wikipedia.org/wiki/Anglo-Saxon_pound" target="_blank"><em>pound sterlin</em>g</a> or a pound of silver) because it is an easy form of standardisation. Cattle were also used as a unit of account while ancient Irish law codes used a slave girl as a unit of account, and continued to do so even when there were no slaves. Units of account make it easier to have transactions on credit. Credit greatly expands the possible range of transactions, since credit transactions do not have to be concluded immediately.</p>
<p>But credit relationships remain of a one-to-one nature (I owe you). Money permits immediate conclusion of transactions&#8211;goods and services for money. Things of production or consumption utility swapped for something acceptable because of its expected use in future transactions. There is no need for any ongoing connection, or any past connection, between the transactors. Money expands the range of transactions precisely because it is so anonymous and self-sufficient. Which is also why monetising personal transactions can give grave offence&#8211;as the point is precisely that the interaction is <em>not</em> anonymous and is thoroughly embedded in on-going connection; by contrast, a monetary transaction you can have with just anyone. That is its great strength, but makes it lacking in the personal connection stakes. (Hence giving presents rather than money; a present is a much more personal statement of connection&#8211;even a gift certificate says you know what the recipient likes.)</p>
<p><a href="http://en.wikipedia.org/wiki/Legal_tender" target="_blank">Legal tender</a> laws don&#8217;t actually get us very far in explaining how modern, non-convertible, non-commodity money has expected transaction utility, as such laws they do not compel private transactors to engage in monetary transactions. Nor do they cover on-the-spot transactions. On the contrary, people are free to insist on a certain currency; or give a premium for preferred currency; or specify some other payment or refuse to contract. Legal tender laws merely specify that, within a given jurisdiction, a specified money must be accepted as payment in obligations already agreed to be monetised. In <a href="http://www.drorgoldberg.com/monetary_history" target="_blank">the words of</a> economist Dror Goldberg:</p>
<blockquote><p>&#8230; sellers are not really forced to accept legal tender money if they are slightly cautious. They only need to state in advance that they want to be paid in a different object, or use a different unit of account. The websites of some central banks are honest about this limited legal status of their money &#8230; The role of the state, after declaring what is legal tender, can be described as passive and negative: To dismiss a creditor’s lawsuit if the debtor offers the right quantity of legal tender. A legal tender law never results in the state affirmatively prosecuting a buyer or a seller for using another currency or for rejecting the legal tender in a spot transaction. Other laws might do that, but they mostly exist in totalitarian regimes.</p></blockquote>
<p>And what is the largest set of transactions in almost any state society? Taxes. Even more to the point, they are <em>involuntary </em>transaction<em>s</em>, you cannot opt out of them or out of using the object set as acceptable payment. If a state sets that its taxes must be paid in its money, then that money has a guaranteed transaction utility. Making a money&#8217;s use in the payment of taxes compulsory provides an anchor for expectations about its future transaction utility. Which does provide <a href="http://www.biu.ac.il/soc/ec/wp/2009-05.pdf" target="_blank">a good answer</a> (pdf) to why otherwise near-valueless tokens have transaction utility&#8211;because they can always be used to pay taxes, lots of people have to pay taxes and the state can (and typically does) insist its money be used to pay its taxes.</p>
<div class="wp-caption alignleft" style="width: 394px"><a rel="attachment wp-att-18711" href="http://critical-thinker.net/?attachment_id=18711"><img src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/image002.jpg" alt="" width="384" height="192" /></a><p class="wp-caption-text">Not even the Zimbabwean government uses this currency anymore</p></div>
<p>Even in the case of US$ outside the US&#8211;they can be swapped for money that can be used to pay taxes. Why not just stick with the local money then? Well, in places with &#8220;hard&#8221; (i.e. reliable) currency, including strong property regimes, folk do. US$ are used in ordinary transactions outside the US in place of local currencies due to failings in said local currencies (small matters <a href="http://www.ssc.wisc.edu/econ/archive/Fordpic.pdf" target="_blank">such as</a> [pdf] <a href="http://en.wikipedia.org/wiki/Hyperinflation" target="_blank">hyperinflation</a> and bank confiscations). That US$ can be exchanged for local currency if needed (such as to pay taxes) provides an anchor for their local transaction utility, while their use to pay US taxes is the ultimate anchor for transaction utility.</p>
<p>In money terms, the US economy is about <a href="http://en.wikipedia.org/wiki/File:US_share_of_world_GDP_since_1980.jpg" target="_blank">a quarter of</a> world GDP and US taxes are about <a href="http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP" target="_blank">a quarter of</a> US GDP (or about 6% of world GDP). Even given that maybe half the US currency realm is outside the US, US taxes are enough to anchor transaction utility expectations about US$, but not nearly enough to set its swap values. (Particularly not outside the US.) Add in the countries which use US$ as <a href="http://en.wikipedia.org/wiki/Dollarization#U.S._dollar" target="_blank">their official currency or accept it in official transactions</a> to the ability of US$ to be exchanged for local money-you-pay-taxes-in, and the global transaction utility of US$ is well-anchored.</p>
<p>Use in taxes means that the money is, and will continue to be, swappable.  What its current swap values are is a different question. The two are connected by that money&#8217;s expected future swap values&#8211;i.e. its function as a store of value. Hyperinflation is regularly associated with collapsing political authority, as whether the local money will remain swappable at all is increasingly unlikely and the point at which it stops being swappable appears to be getting closer and closer. If quantity was all that mattered, that the point at which production ceases was also approaching would help protect the value of that money (as its supply would be now forever fixed). But price is a matter of supply <em>and</em> demand, and anchoring their transaction utility through use in taxes anchors the <em>demand</em> for the local money.</p>
<p>But it anchors the demand in only a very limited sense. For use to pay taxes grounds a money&#8217;s <em>use</em>, but not its <em>price</em>. A dollar&#8217;s worth of taxes is not a set price in the way a given amount of gold or silver is in a gold or silver standard, as tax liability is <em>discharged</em>&#8211;once you have paid it, all you have is a release from that obligation. You have no specific item able to be sold, no production or consumption utility to show for it (apart from not being liable for punishment.) Taxes are an extraction, they are not a normal transaction.</p>
<p>Taxes are so much not a set price, that is in part why taxes are typically levied as a percentage of income, as a percentage of a transaction, as a proportion of asset value, etc. Levying tax liability at a set money rate obviously fails to adjust revenue to total output. More to this point, in inflationary periods, it would make revenue worth less and less in goods and services precisely because there <em>is</em> no set price for some asset, good or service involved. The money government gains has to be spent according to market prices, which tax liability sets no automatic connection to because taxes do not set a price, they discharge an extractive liability.</p>
<p>So, the MMT people are on to something. Unfortunately, they confuse questions of ambit for questions of swap value and write as if the guarantee of transaction utility sets the swap values of money, which it does not. The state may be the largest transactor, but it is not remotely the only transactor and, absent confiscations, has to buy goods and services at going prices. As hyperinflation demonstrates, anchoring a money&#8217;s transaction utility is very much <em>not</em> the same as anchoring its swap values, how good a store of value it is. Just as the problems with <a href="http://en.wikipedia.org/wiki/Inflation_targeting" target="_blank">inflation targeting</a> show that anchoring expectations about money as a store of value is <a href="http://skepticlawyer.com.au/2012/06/06/easy-guide-to-monetary-policy/" target="_blank">not the same as</a> anchoring expectations about the future level of transactions (i.e. expectations about income).</p>
<p>The taxes-guarantee-transaction-utility is a nice, consistent story. If it wasn&#8217;t for the existence of private currencies. It is entirely possible that coins were originally <a href="http://en.wikipedia.org/wiki/Coins#Iron_Age" target="_blank">a private invention</a>. During the late C18th and early C19th, privately minted copper coins <a href="http://www.amazon.com/Good-Money-Birmingham-Beginnings-1775-1821/dp/1598130439/ref=sr_1_1?ie=UTF8&amp;qid=1360155968&amp;sr=8-1&amp;keywords=good+money+selgin" target="_blank">circulated freely</a> in England; a market response to the Royal Mint&#8217;s failure to produce sufficient decent copper coins and the shortage of silver coins. (Copper pennies issued by the Anglesey copper mine were rather charmingly called &#8216;druids&#8217;.)  Nowadays, there is even the virtual private money of <a href="http://en.wikipedia.org/wiki/Bitcoin" target="_blank">bitcoins</a>.</p>
<div class="wp-caption alignright" style="width: 478px"><a rel="attachment wp-att-18707" href="http://critical-thinker.net/?attachment_id=18707"><img src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/druid-head-coin.jpg" alt="" width="468" height="229" /></a><p class="wp-caption-text">Privately minted in Anglesey</p></div>
<p>Except that the private currencies turn out to be much less of a problem than they appear. The tax-foundation story is about explaining the transaction utility of something otherwise valueless (or, at least, whose transaction premium is hugely dominant in its swap value). Despite much economist mythologising to the contrary, there is <a href="https://78462f86-a-72f560ac-s-sites.googlegroups.com/a/drorgoldberg.com/www/myths.pdf?attachauth=ANoY7crnyVzthENppC0X3TGn184F0v9LcyS2xci55XyVx8zka7Ygu66v80Tf-vsawBhN7-Q8vchjKVutAFFXhpXzx3QdKbCxF7XOPXBdxA9rohEllCNwVqSEZkIQJEjG9OGVX_XbqHeZFYVLN_r-uf9mxLcz02SyjcetZ5Kgnxh6eYLun2dk_gQQati1WmrrQ47NZbswRPNu&amp;attredirects=0" target="_blank">no clear case</a> of <em>private</em> fiat currency. Private moneys turn out to be convertible, or failures. Convertible to a monetary metal (typically gold or silver), to a legal tender you-can-pay-taxes-with-it money or redeemable via other assets or goods and services. States have a major advantage in production of money in that they are the largest transactors, the only significant involuntary transaction generators, said transactions operate throughout their jurisdictions and are widely known as such. All of which gives them major &#8220;branding&#8221; advantages.</p>
<p>The questions of the swap value(s) of money and the ambit of money are related but separate questions. Confusing one with the other is a great way to go badly wrong in monetary analysis.</p>
<p>&nbsp;</p>
<p>[Slightly earlier version cross-posted <a href="http://skepticlawyer.com.au/2013/02/08/value-and-ambit/" target="_blank">at Skepticlawyer</a>.]</p>
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		<title>Open borders</title>
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		<pubDate>Thu, 07 Feb 2013 04:36:00 +0000</pubDate>
		<dc:creator>Lorenzo</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[History]]></category>
		<category><![CDATA[Policy]]></category>
		<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://critical-thinker.net/?p=2030</guid>
		<description><![CDATA[<p>Uberblogger Matt Yglesias recently posted on why an open borders policy for the US&#8211;possibly using an auction system to regulate the rate of flow&#8211;is a reasonable option, basing his claim on comparative population densities and history:</p>
<p>But the United States ran an open borders regime throughout the 19th century and we weren&#8217;t worse off for it. On the contrary, it laid the foundations for American greatness. Shifting back in that direction—with exceptions for dangerous criminals and other <span style="color:#777"> . . . &#8594; Read More: <a href="http://critical-thinker.net/?p=2030">Open borders</a></span>]]></description>
			<content:encoded><![CDATA[<img style='float: left; margin-right: 10px; border: none;' src='http://www.gravatar.com/avatar.php?gravatar_id=668751016e54cb9081950a237307ccd1&amp;default=http://use.perl.org/images/pix.gif' alt='No Gravatar' width=80 height=80/><p><em>Uber</em>blogger Matt Yglesias r<a href="http://www.slate.com/blogs/moneybox/2013/01/25/what_would_happen_if_we_let_all_the_immigrants_in.html" target="_blank">ecently posted</a> on why an open borders policy for the US&#8211;possibly using an auction system to regulate the rate of flow&#8211;is a reasonable option, basing his claim on comparative population densities and history:</p>
<blockquote><p>But the United States ran an open borders regime throughout the 19th century and we weren&#8217;t worse off for it. On the contrary, it laid the foundations for American greatness. Shifting back in that direction—with exceptions for dangerous criminals and other select problem types—over time seems perfectly feasible to me and would substantially increase overall human welfare.</p></blockquote>
<p><strong>Winners and losers</strong><br />
An obvious response is, &#8220;who is this <em>we</em>, white man?&#8221; Amerindians would have a distinct view on whether they were better off for said open border policy and the land hunger it fuelled. Though Yglesias is correct in that <em>overall</em> human welfare <em>was</em> improved, just as he is correct in suggesting that overall human welfare would be improved if all <a href="http://www.gallup.com/poll/153992/150-million-adults-worldwide-migrate.aspx" target="_blank">the 150 million adults</a> who polls indicate would  like to migrate to the US did. Nor does raising US population density to 135 people per square mile seem over-crowded&#8211;not when you compare it, as he does, to other developed countries:</p>
<blockquote><p>France has 303 people per square mile and Germany has 593. Japan has 873. The Dutch have 1,287!</p></blockquote>
<p><a rel="attachment wp-att-18637" href="http://critical-thinker.net/?attachment_id=18637"><img class="alignleft" src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/illegal-immigration-450.jpg" alt="" width="360" height="299" /></a></p>
<p>But even leaving aside the dispossession of the Amerindians&#8211;settler land hunger was, after all, one of the grievances that led to the American Revolution; the <a href="http://en.wikipedia.org/wiki/Proclamation_of_1763" target="_blank">commitment of</a> the British Crown to its treaties with the Amerindians and the block that posed to settler land-hunger was one of those decisions-without-representation that the American colonists were aggrieved about&#8211;the effect of mass migration on the existing settler-and-descendants population was mixed, to  say the least.</p>
<p>In his <em><a href="http://www.amazon.com/exec/obidos/tg/detail/-/0393312194/qid=1086415160/sr=1-1/ref=sr_1_1/104-5506629-9983948?v=glance&amp;s=books">Without Consent or Contract: The Rise and Fall of American Slavery</a></em>, (which I review <a href="http://lorenzo-thinkingoutaloud.blogspot.com.au/2009/04/american-slavery-and-russian-serfdom.html" target="_blank">here</a>) Nobel memorial Laureate <a href="http://en.wikipedia.org/wiki/Robert_Fogel" target="_blank">Robert Fogel</a> quantifies how high immigration led to drops in the average height and life expectancy of native-born American workers.</p>
<blockquote><p>The exceptional health of native-born Northerners during the late eighteenth century is revealed by new time series on stature and life expectation &#8230; They show that by the end of Washington&#8217;s administration, native-born American white males were more than 68 inches tall (which was 2 to 4 inches taller than the typical Englishman and had an average life expectations of at age 10 of close to 57 years (about 10 years longer than the English). However, both life expectation and stature began to decline early in the nineteenth century. The most rapid period of deterioration was between 1830 and 1860. By the eve of the Civil War life expectation was 10 years less than it had been just before the turn of the century and males born in 1860 reached final heights that were about 1.5 inches less than those  born in the early 1830s (p.360).</p></blockquote>
<p><a rel="attachment wp-att-18632" href="http://critical-thinker.net/?attachment_id=18632"><img class="alignnone" src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/usheight.gif" alt="" width="616" height="234" /></a></p>
<p>High immigration advantages new migrants (if they survive the passage) since they benefit from increased opportunities. It advantages owners of capital, whether land (since rents and land prices go up), manufacturing (downward pressure is put on wages while product demand increases), or intellectual (since the migrants are unlikely to compete and demand for their services goes up)</p>
<p>In the case of intellectual capital, the contemporary tendency of the owners of intellectual capital to attempt to form cartels excluding those with competing ideas increases this effect, since support for immigration is a marker for cartel membership. The effect is increased further by encourage cultural diversity in immigration, which decreases intellectual competition from newcomers.That academics in particular live in transnational labour markets also increases their likely comfort with open borders.</p>
<p><a rel="attachment wp-att-18646" href="http://critical-thinker.net/?attachment_id=18646"><img class="alignright" src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/800px-Net_migration_rate_world.png" alt="" width="384" height="181" /></a></p>
<p>High immigration disadvantages resident sellers of labour, through downward pressure on wages, upward pressure on rents and land prices, crowding effects, increased crime from decreased social trust (even though many migrant groups are less likely to be imprisoned for crime than locals) and increased disease exposure. The combination of these factors can outweigh increased demand for labour&#8217;s products in an expanded domestic economy and far outdid so in C19th America (when disease control and sanitation were much worse and rates of immigration extraordinarily high). Hence the falling average height and life expectancy.</p>
<p><strong>Migration politics<br />
</strong>One of the great themes of politics in settler societies in the C19th was that there were temperate zone migration flows and tropical zone migration flows; working class politics in settler societies was particularly concerned that tropical labour flows not spread into the temperate settler societies. This was far from a irrational concern on their part.</p>
<p>You could say that C19th native-born American workers suffered a milder version of what the preceding (by several millennia) indigenous settlers had suffered from the arrival of a mass of newcomers. Which is not to deny that the US gained both power and dynamism from immigration. (Or, that, for example, the great restriction of US immigration <a href="http://www.whitehouse.gov/history/presidents/wh29.html">from 1923</a> was not a major tragedy.)</p>
<p><a rel="attachment wp-att-18633" href="http://critical-thinker.net/?attachment_id=18633"><img class="alignleft" src="http://skepticlawyer.ozblogistan.com.au/files/2013/02/Abraham-Lincoln-9382540-2-402.jpg" alt="" width="258" height="258" /></a></p>
<p>In his <em>Without Consent or Contract</em>, Fogel sets out how the anti-slavery campaign forged a victorious political coalition (the Republican Party) on the back of directing worker-resentment away from manifesting as <a href="http://en.wikipedia.org/wiki/Nativism_(politics)" target="_blank">nativist</a> xenophobia (a political dead-end, with so many voters being recent migrants) to anti-slavery and resentment of Southern ‘Slave Power’. There are some contemporary parallels for such political dynamics.</p>
<p>An example of contemporary Lincolnesque political <em>ju-jitsu</em> was one <a href="http://en.wikipedia.org/wiki/John_Howard" target="_blank">John Winston Howard</a>, the former Australian Prime Minister. John Howard’s politics of a sense of control (border enforcement), endorsement (&#8220;battler&#8221; aspirations) and security (family policy, external threat) were not so different from Lincoln’s: Lincoln finessed nativism, Howard finessed general anti-immigration sentiment. He did this while running a high immigration policy and Australia&#8217;s least Eurocentric immigration policy up to that time. Lincoln and co saw off the nativist xenophobia of the <a href="http://en.wikipedia.org/wiki/Know-Nothing_movement">Know Nothings</a>, Howard saw off Pauline Hauline. And the <em>jihadis</em> are real enemies.</p>
<p>The differing interests and perspectives on migration create very different attitudes to illegal immigration. If one likes open borders, illegal immigration is a positive. If one does not, enforcement of immigration policy is the only way you can have an effective say on the matter. Since so much of what is at stake is that sense of control, the more visible the illegal immigration, the more politically salient it is. Arriving boats or organised border-crossing are going to figure rather more than visa over-stayers.</p>
<p>How compatible open borders are with how extensive a welfare state is an open question too. While belief that the welfare state channels taxpayer funds to illegal immigrants is a recurring sore-point. Provision of welfare extends the <a href="http://en.wikipedia.org/wiki/Club_good" target="_blank">club good</a> nature of the state.</p>
<p>If one looks at the issue from the comfortable heights of intellectual eminence, the gains from open borders seem obvious. They are rather less so to sellers of labour living in suburbs where neither infrastructure nor services keep up with demand.</p>
<p>&nbsp;</p>
<p>[Cross-posted <a href="http://skepticlawyer.com.au/2013/02/07/open-borders/" target="_blank">at Skepticlawyer</a>.]</p>
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