Tuesday, January 25, 2011

Ideology and the Real World

If someone claimed that the best way to launch a rocket was to ignore the laws of gravity, chemistry, physics and propulsion, and instead do whatever seemed expedient to you at the time, the first act of that person's boss would be to fire that person and bar him from the building, for fear that he would destroy lives and property if kept on. 

If a police officer claimed that the best way to handle an emergency situation was to ignore the surroundings and his training, and rush in heedless of the danger to his own life and person, this police officer would promptly be barred from the police force, for fear that he would kill himself, any unfortunate individuals working with him, and indeed the very people he was trying to save.

So why is it that the favorite call of the Left when it comes to political policy is to ignore questions of human nature, the historical record, and economic theory and instead rush into the situation heedless of the facts to do whatever you think is expedient at the moment?

I have to ask, because for years I have been hearing the admonishment to ignore ideology in favor of "the real world," as though those who ignore ideology are actually helping people in some way.  But before we can assume ideology is ipso facto bad, first we have to know: What is ideology?  What is it for?  And why do we persist in forming one, even when everyone and their cousin seems hell-bent on convincing us that doing so is such an awful idea?

Ideology is at root, the act of observing the world and forming conclusions about it.  It's purpose is to help us explain what happens in the world, make sense of it, and then use that understanding to guide our future course of action.  And the reason we try to formulate one is that we literally can not do otherwise.  Human beings live and act, and thus need some sort of guide with which to decide their course of action.  Not having any sort of ideology at all simply is not an option.

In the scientific world, this ideology is known as scientific theory, and the method by which it is developed is known as the scientific method.  A "guess" is made about reality (otherwise known as a hypothesis), the guesser uses logic to predict how reality would behave if his guess is true, the guess is then tested against the facts, and the guess is altered based on how what the guesser thinks should have happened compares against what actually happened.  Emotions do not come into it and the objective nature of reality is not questioned.  If your theory does not conform to reality, you do not get to claim that you are being sabotoged by a mysterious power.  If your results are not replicable, nobody assumes that it is because your guess is true for you, but not for them.  If your guess does not work, you do not get a free pass based on your name, position, color or creed.  Your guess is simply deemed wrong, and if you persist in pushing forward your guess, you are eventually barred from rational scientific discussion lest your false guesses precipiate some sort of technological disaster.

In the world of recuse work and handling emergencies, the rescue worker is strictly trained to put his emotions aside and focus on the facts.  A nurse in a crowded emergency ward practices strict triage based on who is in the ward, how immediate that person's need for medical attention is, and the resources of the hospital.  Her heart may twist at the idea of forcing a child to suffer pain for hours while the doctor takes care of more pressing needs, but her emotions are irrelevant to the true problem she must solve: the one of saving as many lives as possible.  She does not get to ignore the practices that were painstakingly developed over long theorization and experimentation because she feels awful about something those procedures might force her to do.  And if that is something the nurse cannot handle, she is eventually let go lest her compassion ends up killing people.

However, all of the rules we have sensibly developed for things like science and rescue work seem to fall apart when it comes to questions of economic and political policy.  Continually we are asked to do more to fight poverty, to fight obesity, to fight rising prices that crowd out the poor from receiving essential services.  We complain that the free market is forcing prices up in medicine, and ignore the fact that half of all health care money is in fact spent by government in the form of medicare and medicaid.  We complain that tuition costs are skyrocketing, and ignore the fact that prices could never have gone as high as they have without government subsidization of increased demand in the form of government-backed college loans.  We bemoan the fall of the housing market which forced so many poor to foreclose on their homes, while ignoring the fact that the reason the housing market spiraled so high in the first place was because of government action in the form of Fannie Mae, Freddie Mac, and an artificially low federal funds rate. 

If we had studied the laws of economics, we could have known before we began that low interest rates and government subsides would artifically increase demand and create a housing bubble.  If we had acknowledged the reality of human nature, we would have known that subsidizing bad behavior would increase the incentives for people to behave badly.  If we had studied history, we would know that some of the worst atrocities in human history were performed by those who proclaimed their goal to be the betterment of mankind.  But we do not do these things, because for some reason we persist in believing that there is no rational explanation for human actions and that virtue in the economic and political realm consists of never trying to find one.

I have a political and economic ideology not in spite of the need to act in the real world, but because of it.  Our goal should not be to refuse to formulate an ideology, nor to determine when to ignore that ideology based on the suffering of the moment.  Rather, our goal should be on making sure that our ideology accurately predicts the real world and strictly following it in order to try and ensure the best possible outcomes for all.

P.S.  Watch the link.  It is a clip of Richard Feynman talking about the scientific method, and it is quite fun.

Friday, January 21, 2011

The Great Pyramids of China

The last time I was in Chicago, I had some time to kill before my appointment.  So I decided to go to the nearby John Hancock building in order to ride up to the observatory there and view the city.  For those of you who have never visited, Chicago is quite beautiful, and this was a bright sunny day, so I could see everything. 

While I was standing up there looking over the city, I started to think about the pyramids of Egypt.  The pyramids are famous, and rightfully so.  They are one of the wonders of the world, and people travel from all over the world to see them.  But compared to the towers of cities like New York or Chicago, the pyramids are little more than stone hovels baking in the harsh desert sun.  Those great monuments, some of the most impressive monuments which our past has to offer us, are absolutely nothing in the face of the buildings we work and live in every day of our lives. 

And yet, for all their magnificence, the skyscrapers are absolutely nothing like the pyramds.  The pyramids were built by slave labor.  The skyscrapers were put up in a fraction of the time through the work of free men in a free economy.  The pyramids were built to house the parasitical dead pharoahs.  Skyscrapers were built to give shelter to the living and the productive.  The size and grandeur of the pyramids made them anomalous in the ancient world.  Skyscrapers are so common in the modern world that most most walk past them quite blithely, completely ignorant of the magnitude of achievement they represent. 

At least, this is what a skyscraper is in a productive Western city such as Chicago, London or New York.  In China, the meaning of a skyscraper has cycled back to the meaning of the original pyramids: empty hulks built by slave labor as symbols of government power and authority.

Take a look at some of the great pyramids of China.  Empty cities, designed to house hundreds of thousands, sometimes millions... and yet the only places which show any signs of life are the buildings designed to house government functions.

Construction is 60% of the Chinese economy, whereas exports, despite the hype about China being the main supplier of the West's cheap crap, only make up about 5%.  This means that over half of China's supposedly remarkable 8-10% annual GDP growth is also probably in construction, sending the number from highly impressive to surpassingly stupid.  Construction and production grow an economy, but only if someone actually has a use for what you're producing.  Building residental and commercial space that nobody wants to use, on the other hand, does nothing more than help prop up an artifical real estate bubble.  And since China has roughly 64 million vacant properties right now, enough to accomodate nearly 200 million people if you go by a family size of 3 (two parents, one child in accordance with China's one-child policy), I suspect the bursting of this bubble is going to be far worse than what happened when the American real estate bubble burst.  Especially since the Chinese government is going to have no qualms whatsoever about trying to fix their mistakes with more mistaken government action.

Tuesday, January 11, 2011

In Which I Get a Question Answered On PJTV

A couple of weeks ago, the Front Page did a segment on how China might well be one huge investment bubble right now, with currency inflation, bad debt on the government books, and a property bubble larger than the one we had in the U.S.  So I commented:

 Thanks for going into what China's potential bust means for the U.S. and U.S. debt.  Just out of curiosity, would some of that bad debt China's hanging on to happen to be in the form of U.S. government bonds?
In turn, my comment was commented on by Terry Jones in a member's only segment.  For those who are not PJTV members, I will type out the response.

Our exposure is probably relatively limited. What China did was they printed a lot of money, and basically funded a massive real estate boom that really dwarfed ours in its size, it was an enormous real estate boom.  And a lot of those loans are not good, they're not being paid on.  But China, because they basically control all the banks in the finance system, they in essence can say, "Well, we're going to keep those on and pretend they're good."  Well that will work for a while, but at a certain point the game has to end, and when it does they will have a very serious real estate collapse, and I'm afraid a lot of the loans that they made, that the government made, are going to go bad.  They can cover this up with the fact that they run a rather large trade surplus, and they do own a lot of US government bonds.  I mean, last July (2010), I think they had about 900 billion officialy, 900 billion in US treasury and other debt, but they in fact have much more than that, by some estimates 1.7 or 1.8 trillion dollars in US debt.  So one of the concerns that we need to have is that if they should have a domestic meltdown of their financial system, they would begin cashing in US bonds, selling US bonds in a massive way, and that could be very disruptive to our financial markets and send interest rates soaring here.
Thanks Terry!

Sunday, January 9, 2011

Why This Blog?

A short explanation of why I wanted this blog, since I have other forums for expression:

I write for a group blog called Opinion-Forum, and I will still be double-posting quite a few entries.  However, because it is a group blog, I feel uncomfortable discussing issues there that are not issues for the majority of the population.  I can write articles about politics, history and economics that are relevant to all.  I can even do it from an Objectivist or libertarian perspective.  But writing about private philosophical musings, about Objectivist musings, or about my life in general is basically out.  Not because OF would not take my essays, but because I would be uncomfortable submitting them to that audience when that is not the sort of thing the OF audience goes there for.

When I write a post about politics, history or economics, it will go to OF as well as here.  When I write a post having to do with money or monetary policy, it will go to The Real Truth About Money (TRTAM) and OF as well as here.  But some posts are not relevant to those audiences, and so they will simply go here.

Saturday, January 8, 2011

An Explanation Of This Blog's Title

When I picked this blog's title, I wanted something from Atlas, and I wanted something that hadn't already been grabbed by half a dozen other Objectivst-leaning people.  I settled on "An Intransigent Mind" because it was one of the quotes that had always struck me from Atlas

"You have seen the Atlantis they were seeking, it is here, it exists - but one must enter it naked and alone, with no rags from the falsehoods of centuries, with the purest quality of mind - not an innocent heart, but that which is much rarer: an intransigent mind - as one's only possession and key. You will not enter it until you learn that you do not need to convince or to conquer the world. When you learn it, you will see that through all the years of your struggle, nothing had barred you from Atlantis and there were no chains to hold you, except the chains you were willing to wear." - Ayn Rand, Atlas Shrugged

I have always been fond of this quote, because of its break from the traditional idea that one must be innocent and pure to get into paradise.  I read the injunction to possess an intransigent mind as one which challenged you to engage in a passionate quest for truth, which was an idea I liked very much.  Since intransigent is not a word that gets used much even in books, and because it is not one that I found much use for myself, this view was not challenged until I actually looked intransigent up in the dictionary today when choosing my blog title.  The dictionary definition turned out to be:

1.   refusing to agree or compromise; uncompromising; inflexible.
2.   a person who refuses to agree or compromise, as in politics.

Obviously I still liked the idea of the title, or I wouldn't have kept it.  But this definition was slightly different from the one I had expected to find, and because of this I became worried that the title might fool people into thinking I was some sort of rock-skulled Neanderthal who never listened to anyone or compromised on anything.  Hence this entry, to set the record straight:

Anyone who knows anything about Ayn Rand will know that she possessed an incredibly intransigent mind.  I believe that in Objectivism, she thought she had come up with the philosophical equivalent of the Theory of Everything, and thus didn't have much patience for those who disagreed with her on anything.  Not that she couldn't be patient at all; by many accounts she had incredible patience when it came to explaining her ideas.  But if you were a part of her inner circle and trying to learn Objectivism, you couldn't disagree with just a part of her philosophy (i.e. believe everything in Objectivism except the part that compels atheism).  It had to be all or nothing.

Full agreement with Objectivism might or might not have been what Rand was thinking about when she wrote that passage; I do not know and probably never will (though if I had to guess, I'd say the answer was "yes").  But the way I interpret it is thus.  In order to possess an intransigent mind, one must accomplish 4 things: 1) to be relentlessly devoted to the pursuit of truth, which is indeed an objective thing that exists independent of our perception of it, 2) to hold to that truth no matter what pressure is applied to you, 3) to never alter those truths unless you are confronted with a convincing rational argument that those truths are wrong and 4) never to compromise those truths in the name of expediency or emergency.

I do not perfectly accomplish these goals, and I probably never will.  However, I think that living up to them as best one can is a fundamental requirement for a claim to morality, if not the actual essence of morality. 

So here's to the possession of an intransigent mind.  Certainly it will do me far more good than attempting to possess an innocent heart.

First Post

Hello all.  This blog is both an experiment and a work-in-progress.  I'm still figuring out how blogspot works, so please be patient with me as I experiment.  In the meantime, posts will also be showing up at Opinion-Forum.

Welcome to the site.