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Market Demand Must Be Regulated

Society values pro basketball players who provide entertainment far more than trash collectors who perform a vital service. We may need garbage collectors more than professional athletes, but it’s easy to find people who can pick up trash, while elite athletes are scarce by definition.  In this case market supply and demand is a distortion of actual value.  We are ok with athletes being paid millions of dollars to play a game because we suppose demand is sacrosanct, almost a godly force we dare not question.  After all, we get paid what we’re worth, right?
Yet it’s illegal to buy cocaine or hire a hitman when there is undoubtedly demand for drugs and contract killing.   Alcohol and liquor sales are heavily taxed to try to curb demand.  Or what about medical treatments?  When a patient is in danger of death, the value of the next treatment is theoretically infinite.  So shouldn’t that next round of chemotherapy always cost everything the patient has left according to pure demand?  The state already can and does regulate demand—it’s not off limits.
So why then do we let a football player or a movie star walk away with millions of dollars when its obvious there’s no way their contribution however important can be that large?  When someone becomes a millionaire by throwing a ball around or playing make-believe on camera, the character and morale of the entire society is undermined.
What is the garbage man to think when society values a single movie star more than him dozens of times over?  His task is so important, society can’t do without him for even a week.  If movie studios were all shut down, it might be unpleasant news but people would get on with life.
So why not put a strict cap on the income of entertainers and their promoters?  They provide services that people want and seem to generally do more good than harm by helping to create a thriving culture, so it would make sense to allow them to earn a good living, but becoming multi-millionaires would be out of the question. Entertainment is wonderful to have but it is a luxury, not a mainstay.

Obviously, a big budget movie gets made and its star actors paid millions because hundreds of millions of people are willing to pay for movie tickets.  So I could see someone arguing that because demand exists, it should be allowed.  But this is not enough.  Otherwise we should also be willing to argue for the legalization of contract killing and robbery.  The pattern I see is that demand is allowed to express itself so long as it does more good than harm to society.  So now we have to decide if it is good for a society to pour billions of dollars of its wealth into a handful of entertainers.  Surely there’s a limit on the worth of entertainment when there’s other things that need to be done.
As individuals, we value recreational time playing video games, watching movies, or blogging.  Yet we have a time and money budget for our own entertainment.  Similarly, a society ought to have a wealth budget for its luxuries.  It may sound restrictive to limit what a pro athlete or day trader makes, yet we already accept sin taxes that curb and punish demand for cigarettes and booze.  Sin taxes already carry the implicit recognition that we are not rational economic agents.  We routinely make bad decisions.  So we’re given a push in the “right” direction by the state.  We can buy that bottle of vodka or pack of cigarettes, but we have to be willing to pay an extra fee that serves as both a disincentive and an indemnity to society.  By the same principle we could cap the price for event and movie tickets or the acceptable budget cities can spend on stadiums to prevent or at least limit the misappropriation of society’s very finite wealth.
It would also be interesting to examine financial “products” and examine which of them return equivalent or greater value to society and which are a net drain or even cause damage.

Limiting the size of luxury industries brings up a big issue though—what about all the people that would lose their jobs in movie studios, stadiums, and concert halls?  We ask this because we lose perspective of the big picture.  We go to work to provide value to others and then get compensated in proportion to our contributions.  Is it a net good to work at a stadium that cost the city’s tax payers billions of dollars to spend billions more on a luxury activity?  If there’s nothing more productive to do with someone, why shouldn’t society just give them a guaranteed minimum income until there’s something more useful to do?  Society comes out way ahead by just skipping the multi-billion dollar excuse to write a paycheck.  No activity at all is far more valuable than useless activity.  Just staying at home with some basic income, there is a small chance they may have the initiative to use their leisure time wisely and genuinely contribute to the good of the group.

We’ve been taught to think in a way that’s a distortion of Keynesian views.  Keynes suggested hiring people to do useless tasks as one way to stimulate a depressed economy.  Naturally, his prescription for emergency situations became the new normal, where making money is a good thing even if we’re building “useless pyramids” or paying people to dig a hole just to fill it in again.  The trouble is this becomes a philosophy of economic nihilism in which human activity is divorced from purpose and meaning.   People just want money and as long as no one is murdered outright, the means don’t matter much.  Strangely, it sounds almost heretical now to suggest that markets and the accumulation of wealth ought to serve a purpose—to benefit the group in which we participate—that money awarded for unproductive or under-productive activity damages the integrity of society.

The survival of human societies in this world is a serious business; against other societies, against the pitiless forces of nature, and never-ending internal pressures.  The elevation of frivolous things to the heights of accomplishment makes a mockery of the social order.  A society where people worship “celebrities” over inventors, leaders, and entrepreneurs has lost its way.  Such is a disaster of mob rule where the masses are allowed to determine who is great and who is low.  When the undeserving get the best rewards, cynicism spreads and loyalty erodes until one day a nimble challenger full of confidence arises and proves more than a match for a mighty opponent crippled by rot.
The market is a form of economic democracy—every purchase is a vote.  We have an electoral college and representatives in political democracy rather than a pure popular vote.  So popular demand on the market must also be subject to controls, to curb and prevent tragedies of the commons.  There already are rules such as monopoly prevention that implicitly acknowledge the market has a mission to fulfill.  It is not there for its own sake.   These principles just have to be extended until the market is re-animated with purpose as a healthy circulatory system.

Crowdsourcing, A Modern Patronage System?

Last post, I discussed the difference in creative output between an older system of patronage and a modern system governed by the mass market.  Older societies could turn out brilliant creative work with far fewer resources and people because a limited number of people called the shots. What’s for everyone is for no one.

A creative work that’s commissioned serves the vision of a patron, a work exposed to the forces of the mass market merely tries to please the most and offend the fewest becoming a grotesque Tower of Babel.
The internet has enabled a phenomenon known as crowdsourcing, a process by which an idea gets funding from just the people who want it.
This process has the potential to create a modern sort of patronage.  The idea that gets created exists to serve a limited group rather than the entire aggregate mass of humanity.

I have found an inspiring example in a youtube channel called The Great War.  The founder, Indie Neidell covers each week of WW1 as it was happening 100 years ago with lots of special episodes in between.
The show is filmed in a studio with a production crew and gets its funding from a crowdsourcing site called Patreon.
With a fraction the funding of a third rate History Channel special, they have done more than the History Channel could ever have aspired to.  The Great War now has many hours of runtime, hosts active discussion on its videos and reddit, and caters only to those who pay for it.  So if enough viewers want an episode about Bulgaria in WW1 or French WW1 Uniforms the episode appears.
Even as a kid, I referred to the History Channel as “The Lost Secrets of WWII Channel”  or the “The Lost Secrets of Nazi Superweapons Channel.”  And this was years before they descended into airing little more than reality shows.
Shackled by the tyrannical mass market, the History Channel was slave to the few events and passions that register on the popular consciousness.  They can cover a comic book WW2 endlessly, maybe get away with the American Civil War every once in awhile.  Other than that, conspiracy theories about Atlantis, the Bermuda Triangle, the Knights Templar, and lost tribes of Israel sell far better.  They no doubt have millions of dollars to spend, but by comparison to The Great War, they’re a joke.  We can see how commissioned creative work can be orders of magnitude more efficient with results that can be exponentially better.  This gives us a glimpse into how relatively impoverished societies of the past did as well as they did.

While big individual patrons like the Medicis or Carnegie remain in the past, the internet is enabling people who want the same things to get together and create sheltered markets protected from the insipid Many.
Without this protection, people who want a show about Lettow-Vorbeck’s brilliant campaign in German East Africa in WW1 have nowhere to turn, for they are a drop in a great ocean, swallowed up unless they find a way to escape.
Furthermore, The Great War shows us how crowdsource patrons can form a community around the work they sponsor.  Those who watch enough episodes see how repeat commenters gain a reputation and begin to notice the recurring in-jokes.  It’s an environment where participants feel a sense of ownership and belonging, at least far more than most of us can feel towards impersonal modern institutions.  I could see these sorts of affiliations among the possible catalysts for cultural secession and the creation of new tribes within obsolete nation-states.

A Creative Culture Requires A Leisured Elite

Trying new things is a luxury.  A wild animal that tries to play with its default script probably ends up dead.  Human societies, though, are actually required to try new things or else a more inventive society outcompetes them.  How a society manages its creative output is a matter of existential importance.

The greatest breakthroughs and masterpieces have always come from those who can labor at their work without distraction and who have significant creative freedom.
The ancient world produced works of genius that still stand out today.
This is completely astonishing when we consider that population size, wealth, and the distribution and storage of information were pathetic compared to now.
Surely the works of Ancient Greece ought to compare to our own as petroglyphs compare to Renaissance painting.  This may hold true if we consider technology, but not in the realm of culture and creativity.  Even when we consider technology, it’s amazing what they could accomplish with limited knowledge and resources.  Amazingly, much of what we have now is merely derivative of what the Greeks had 2500 years ago.

If we look at the creativity of societies in the past, one thing we must notice is that the creators weren’t ordinary people who worked on philosophy or poetry after a day in the fields.
Without exception, the people who produced the best and highest culture came from a small but leisured and insulated class of individuals.
For most of history, 90%+ of people were subsistence farmer peasants, yet so long as even a tiny fraction of 1% had the freedom to be professional creators, it was enough to create enduring culture.

Modern American culture idolizes the myth of someone who can work full time, take night classes, raise a family, and write the next great novel all at once. Thousands of years of human experience, however, tells us that the highest quality creative work requires complete devotion just like any other discipline.

There are of course professional creative people today—far more by numbers and proportion than there ever were in previous societies. There’s a big difference though. Modern creators are still paid workers.

The most creative people in older societies were invariably allowed to live free from the concerns of the market economy. They belonged to a leisured, aristocratic class that would have seen such affiliations as vulgar, even if they lived an ascetic lifestyle. They understood that if you depend on the next paycheck you can’t say what you really think. You have to give your audience what it wants right now or else you’re broke.
When it comes to modern creative talents people throw around the words “authentic” and “sellout.” These distinctions are an illusion when everyone lives in the market economy. Everyone is a sellout when everyone has to sell themselves.
This conflict of interest ensures that great creative work is scarce when everyone is busy earning a living. The market will produce plenty of what sells right now, but precious little anyone cares about 100 or 1000 years from now.
The market knows only the present, so a high quality creative class requires some degree of insulation from its caprices.
In the past, most advancement came from the few people who didn’t have to worry about wealth. Even where they did not have talent themselves, they might become patrons. Patrons were not really the same as employers because they were not directly trying to turn a profit. Moreover, patrons were a single person whom an artist could reason with. Artists like Michelangelo and Leonardo both negotiated with their patrons in the middle of the creative process and had some measure of control.
There is no arguing with market demand. The many wants what it wants right now. So when the market prevails we will never see epic works that take half a lifetime to produce, nor works that don’t ape today’s popular taste. Worst of all, the market forces creative people to answer to the masses.

In the past, the few professional creative people were protected by forming tight knit peer groups.
Socrates, Plato, and Aristotle represented three generations of master and apprentice, each of them supported in leisure by their society within a school of their making.  We might also consider that Pythagoras or Epicurus thrived as well within their own tribe of students.
In the past, ascetics and mystics formed another sort of leisured aristocracy.  Consider Diogenes who lived on public charity, or that the very name ‘dervish’ originally means a beggar,  or the experiences of John the Baptist, Jesus, any number of saints in the wilderness.   Across the planet, societies that nurtured their mystics have developed lasting spiritual traditions.
Even consider how modern science and education was largely pioneered by monks who had the rare leisure to study and question within the protected environment provided by the clergy.
A universal market economy, though, by its nature has no place for such “low productivity” slow growing endeavors.

Consider how the Romanticist poets all knew each other, most all of them from leisured aristocratic backgrounds.
Tolkien and C.S. Lewis knew each other, both academics with tenure at a university that still had a strong aristocratic tradition.
Robert E. Howard and H.P. Lovecraft profited richly from corresponding though both suffered terribly from being trapped in the market economy.  It speaks volumes that like their spiritual predecessor, Edgar Allen Poe, they had to sacrifice themselves to create enduring work.   Imagine what they could have accomplished had they been leisured aristocrats.
One small group of creative peers who needn’t fear for money are a more powerful force than an entire modern hive cluster of hundreds of millions where everyone is slave to money.
Constant busyness at pointless jobs is one of the biggest drains of productivity, the slayer of creativity in a population. The overworked do not tolerate idle creativity in others. Like-minded people are the substrate on which the individual grows. Just as guerilla insurgents cannot survive without a sympathetic population to harbor them.

Not long ago, societies could only afford to have a tiny number of people trying new things. But like efficient bodies honed by evolution, they made the small amounts of energy they spent on their R and D departments count so they were not subsumed by their competitors.
Now with greater modern wealth, we may do well to observe the successful practices of leaner times and apply them on a larger scale.

See also: Smart Socialism,
How the Middle Class Used to Be Affordable

Every Purchase Is A Vote

Whenever we walk into a store we can measure how much we’re like everyone else.  Imagine a planet where everyone was you.  What then would the inside of the store look like?  All the things you like would be available in abundance, their prices driven down by economy of scale.  How close then is the existing store to the theoretical ideal that serves you best?  We can’t expect everyone to be the same in real life; without the purchases of many different people, there could be no store.  So we must be willing to sacrifice some of our individual preferences to have a market.
The influence of our own vote though is tiny so we must have some significant overlap with other people for the offerings of the store to yield us benefits.  If most customers don’t want some of the same things we want, the store is useless to us.  A man, for instance, will likely never have any need for women’s clothing stores because he lacks overlap with the targeted electorate.
Imagine for a moment the store we’ve walked into is a grocery store.  The initial overlap in needs is very high.  Everyone gets hungry, so we have a great test case.  When we look at the store shelves, we see a purer sort of democracy than has ever existed in politics.  What’s for sale is what everybody wants.
What if most people want junk food though?  The grocery store will have lots of cheap junk food and the substantial food will be scarcer and higher in price.  Perhaps it just points to the reason why there never has been a true political democracy.  The masses might well make terrible decisions.  A people cannot survive leadership without some semblance of order and quality control.  But they can survive the consequences of eating too much cookie dough ice cream, at least in the short term.

We can draw a similar analogy with book stores.  We want to read, but the store is of no value to us if the only books available are sensational slush.  In this case, the mass of other people out there has proven to be a liability to our interests because of their lack of overlap concerning the details of an item we want.  And our paltry votes don’t even make a dent.

Let us look at the bestseller lists for books too, and the top 25 in music.  Or how about the most popular television shows and movies?  In a decently ok world, most items on these lists should be among the best, right?  But what if to our horror, we consistently see works of low quality, or insipid mediocrity exalted by the collective?
If you don’t like what most people like, you are in a way living in a zombie apocalypse, surrounded by shambling throngs of people whose tastes and interests run contrary to your own in every way imaginable.  Your voice is drowned out while everyone rushes to the theaters to see the next remake of a remake.

If you or I were to conclude our nature and preferences have remarkably little overlap with most other people out there, it does not make sense to make the sacrifices required to participate in their collective pools.  Banding with the masses proves more a liability than a benefit.  It makes far more sense to find those with a higher degree of overlap even if they’re just a few and pooling one’s demand with them instead, while isolating oneself from the slavering zombie hordes.

It is on this basis of collective compatibility that would underlie a modern caste system.  In the case of economics, each cluster of preferences would occupy separate markets from food, to clothing, and entertainment.  Perhaps such distinctions already exist informally, but it takes considerable knowledge, deep affiliations, and especially sheer wealth to sort out what belongs to one’s proper sphere.
In a more formalized order, each strata has no need to waste energy on self discovery, they naturally gravitate towards their proper places and live their whole lives therein, their votes compatible with the other voters of their breed.  With a more stable hierarchy, less struggle takes place and far more gets done.

If we consider grocery stores again.  There already are grocers that cater to different tastes, but they do so mostly through being more expensive.  They decisively segregate their clientele using high prices but in so doing produce a form of value signalling rather than pure optimization.
In a correctly stratified caste system, a store ought not to rely first on higher prices as an isolating mechanism but instead be able to focus on being able to provide the best possible value given the votes of the consumers of the higher castes.
We may consider pure status signalling such as paying extra for ‘organic’ produce a penalty that certain voters agree to pay in order to form a barrier.  But if such a barrier is already formalized by the agreement of voters, then there is no need to pay such penalties and all effort can be put into providing the best value possible for the voting coalition.
We can imagine similar principles applied to real estate.  Those who pay high prices to keep undesirables out of their supermarkets apply the same tactics to property ownership and school districts.  Again, the cadre of voters in an unstable hierarchy is forced to pay penalties to segregate themselves into a mutually beneficial electorate.  In a stable caste hierarchy, their neighborhoods and schools are delineated by force of their votes, leaving them free to build value rather than spend most of their wealth insulating themselves against incompatible demographics.
As it is, many people try to isolate themselves from the gales of popular mediocrity by working long hours for decades.  So hard is their task that they barely manage to reproduce, managing only to replace themselves in the best of times.  The most productive creatures effectively barely scrape by at subsistence.
Because their natural habitat is saturated by hostile tribes unless they build cost-prohibitive barriers, they are forced to spend most of their effort just trying to chisel out their desired place, which in a Correct order should be theirs by natural right.

As a final thought experiment, consider how idiotic most advertisements are on television, youtube, and in print.  This is what most people find persuasive or these ads would not exist.  Every advertisement is a glimpse into the heart of the average person.  Don’t like what you see?  Then you are participating in the wrong commercial electorate.
How would advertising change then if we dominated the commercial electorate?  Would it even exist in the same form?

See Also:  Shelters From Planned Obsolescence,
Friction of Association and Social Selectivity

Does the Decline Make Statistical Sense? Does the American Way Make Financial Sense?

The American economy is worth 15 trillion, still over twice as big in absolute terms as a distant 2nd place, China a desperately poor nation with a huge population…
But is that wealth proportionally useful compared to other places?
If we consider GDP by purchasing power parity, China with many times more people still has only 75% as much relative wealth as the US.

The US national debt has passed 100% of GDP but the US remains one of the worlds most reliable debtors: 2% of GDP, 7-8% of Federal Revenue more than pays off all the
interest each year.  The federal government spends 4x as much each on social programs and the military!
The American debt burden would not impress struggling European powers during the Napoleonic wars.
Nations like Japan are far worse off with close to 150% GNP in national debt or Greece at 200%. Germany isn’t that much better off at 85%

The net US trade deficit is by far the largest in the world at about 450 billion, but another 30-40 billion a year of exports could plug the gap and the difference still pales in comparison next to the massive size of the US economy.

The numbers tell us that the US is a monster, yet those of us who live there are experiencing relentless and accelerating decline.  How do we explain this against awe inspiring numbers?
After all even a US in relative decline is still surpassed only by the entire EU.

Here’s some reflections on reconciling the reality on the ground with the statistics?

Virgin Bride: Unbuyable

Wife: Average income just an entry ticket to the arena

Girlfriend: Average income just an entry ticket.

Job Security: Unbuyable

House: At least $200,000 (realistically far more paid after interest, no one can afford that out of pocket)

Car: At least $10,000 if new. (realistically far more paid after interest, no one can afford that out of pocket)

Rent: At least $600/month, $7200/year even in cheap areas after utilities and fees.

Education: 16 years to satisfy basic prerequisites, consuming at least 6 years from age able to enter workforce. Possibly more than a decade with higher degrees. A doctor or successful lawyer may earn a lot but has to compensate for 10+ years of working part time or not at all. Filling a big black hole of years of tuition + living expenses.

Children, Family Before Age 30: The price is a life of grinding poverty.

How much just to break even?  A couple million dollars earned over a couple of decades? Even if everything goes as planned, break even by middle age?

The simple truth that stares us in the face: The “normal” lifestyle with house/apartment, car, job doesn’t make financial sense.
It entails a huge expenditures of time and energy in a desperate bid to break even.
In the past, people may have had prospect of having a family and securing their genetic futures, but now even this basic reward(readily available to many poor peoples all over the world) is elusive.

Just a glimpse at these basic expenses shows us that rent seeking, fees, tuition, royalties, interest on assets and payments is where wealth can actually be made.

Right now what keeps people going? Fear that the only alternative to the “break even track” is to live in true uncertainty of survival.

The United States remains fantastically wealthy on paper yet is the average person’s life essentially any different than the average across time and place?

Is someone in a poorer country who can hope for a genetic future in their reproductive prime, surrounded by supportive family, with an ancestral home to live in, a family trade to aspire to, in fact, better off?

Are Americans as atomized individuals a whole that’s less than the sum of its parts?
Are Americans despite their unprecedented wealth undermined by backwards and wasteful social institutions and culture?

Or is the present trend of declinism as the numbers suggest, a misguided fad?

Insights on this matter?

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