11/20/2013

Quote of the Day

"To efficiently run a school, amplify fear (and destroy passion)."
     —Seth Godin, Stop Stealing Dreams.

8/14/2013

Thoughts on Third Parties and Elections as Theater


Thanks to our voting system of single-member district, first-past-the-post elections, structural forces pretty much guarantee that American elections will be between two major political parties, no more. (To political wonks, this is called "Duverger's Law.") There are ways to change the system to make third parties more viable—my favorite is called Instant-Runoff Voting—but for the most part, we can neglect those possibilities, since the two major parties are hardly interested in damaging their stranglehold on power.

Still, third parties exist. The most influential are the Libertarian and the Green Parties; and every so often people in the Republican Party rumble about breaking off and forming a "real" conservative party, perhaps organized around the Tea Party. Before anyone takes such a step, it is worth reviewing what exactly a third party is intended to do.

Third parties are generally incapable of winning elections. The exceptions, apparently, are either when the candidates of both major parties spectacularly self-destruct at the same time (as when Jesse Ventura won the governorship of Minnesota), or when the race is for a local position in a low-turnout, low-interest race that can be swung by a core of dedicated partisans. If you hope to win on a third-party line, my advice would be to find a boring political office in a sleepy jurisdiction where the incumbent is annoying his constituents and you have an unusual number of supporters, build a disciplined organization of volunteers, knock on a ton of doors, make friends with all the local power centers you can, and generally fight your way to victory by being better at retail politics than the other guys.

This seems a tall order, given that third-party activists are generally attracted to ideological conflicts and not retail politics. But the key, it seems, is to avoid drawing too much attention to yourself, so as not to spook the national parties into bringing their resources to bear. Done right, this strategy can help a third party develop a bench of seasoned public servants who are well-placed to advance to the higher ranks in politics.

What it won't do, however, is to drastically change people's minds on the major ideological conflicts of the day, the ones that motivate people to join third parties in the first place. Which is why most third-party candidates run for offices they cannot possibly hope to win: the presidency, governorships, congressional seats. That a handful of libertarians and socialists have managed to win elections to Congress over several decades proves the point: all the other candidates were not running to win.

So why run? The general theory is that by using the election as a platform to argue your point of view, you can influence people to shift their views over time. Third parties can serve as incubators for ideas that then diffuse into one or both of the major parties, carried there by sympathizers who then infiltrate the establishment. Libertarianism has had some success in influencing the Republicans in this manner, as the Greens and Progressives have to the Democrats. Still, it seems to me that most of the work there has been done by think tanks and public intellectuals, and the radicalized volunteers for third-party campaigns—not by third-party candidates themselves.

Most of those candidates have been quite counterproductive, in fact, in getting their real message out. Think of Alan Keyes's quixotic 2004 campaign against Barack Obama for the Illinois Senate seat. How many people did he convince that libertarianism is a reasonable ideology, compared to the people convinced that he was a machine-gun-crazed lunatic? (Granted, Keyes was nominally Republican, but let's be honest here.)

So if you are an activist for a third party and you want to run a campaign for the purpose, not necessarily of winning, but of changing the public mindset to favor your cause, how should you go about it?

It seems to me that the best tack is to eschew the traditional playbook for running an election. You are not going to win the vote; to try is to play into your opponents' strengths. What you want is not to assemble 50% of relatively ill-informed voters living in an arbitrary patch of land; you want to get into the head of the literate, engaged, politically aware people all across the country. The model to follow then is not retail politics, and not the sad pathetic strategy where you boldly state your positions in the most uncompromising language possible, and then sit back and wait for the public to spontaneously have a road-to-Damascus moment. You need a way to get people's attention, to break them out of the traditional patterns of political thinking, all across the country. You are trying to blow their minds.

In short, third-party activists ought to be developing a model of the political campaign as performance art.

Ditch the comprehensive platform. Ditch the exhaustive philosophical pamphlets; plenty of time for people to read them once you have already piqued their interest. Instead, create visceral, stunning moments of experiential clarity showing where your model is superior to that of the major parties. Create viral videos; file high-profile lawsuits against the corrupt parasites who exemplify the worst ills of the system you mean to fight. Gather volunteers to clean up a slum or build a house or plant a farm, organized around the principles you espouse. Distill your philosophy down to its very essence, an essence that explodes all the assumptions about politics, and then repeat that essence constantly—but not as an explicit lecture. Instead, make it the theme of every image, every piece of music, every organized gathering you do.

One example where people almost, but not quite, did this right was the Occupy Movement. The Occupy activists managed to create a massive event and transfix the attention of a national audience for a short time. If not for the general incoherence of their message, their ideals, their program, and generally their plan for getting anything done at all (including maintaining order in their own encampments!), the Occupy crowd could have pulled off a massive shift in our politics. As it is, even with the general failures of the movement, they still managed to galvanize particular covert tendencies within the Democratic party into coming out into the open. (Not that this was a good thing, but that's not my point.)

So yes. Politics as performance art. That seems to be the way to change things in this country.

5/17/2013

Thinking About Alliances

In my dissertation work, I'm attempting to develop ethical guidelines for when non-state groups have the right to go to war (that is, when they have Right Authority). My claim is that non-state groups can often represent their communities as well or better than state governments can, and the current argument that only states are allowed to go to war is absurd.

At the moment, my current obstacle has to do with one of the traditional requirements for Right Authority: the Authority's ability to control and discipline its subordinates. Basically, if fighters on your side are running rampant, attacking civilians, disregarding your orders, and ignoring attempts to broker ceasefires with the other side, then there is a serious problem with your claim of being a Right Authority. That's the way that the issue is presented, anyway. Underlying this treatment is the assumption that armed groups are part of a hierarchical chain of command.

The problem is that when you look at conflicts like the Mindanao struggle in the Philippines, many armed men are part of mostly-autonomous bands that might affiliate with MILF one day, with Abu Sayyaf the next, and pop off for a spot of independent banditry on Sundays. While they are certainly influenced by the demands of the organized group leaders, to call them part of a stable chain of command is ludicrous. Yet, given that, should the existence of such groups harm the standing of the organized units like MILF? That is, should you view such groups as examples of a failure of MILF discipline? Or should they be viewed in another way altogether, one that better fits the facts of the case?

Right now, I'm leaning toward the latter view. I think the best way to look at such groups is as members of an alliance with the major armed organizations. And that brings us to a key point: while political theorists have wrangled back and forth over the ethics of warfare, there has been practically zero discussion that I can find of the ethics of wartime alliances. Can you ally with bad actors? What obligations to control them might you have? If you do ally with bad actors and then fail to control them from committing atrocities or the like, does that ethical breach stand on its own or does it harm your own standing as a Right Authority?

I don't know the answer yet (though I suspect I'll be doing a lot more reading about civil wars, such as this book that comes highly recommended by some big names in the field). But I find it encouraging as a budding young scholar to discover such a rich vein of apparently untapped questions—especially since the topic of ethical alliances could have applications ranging from international relations, to civil wars, to even the institutional workings of democracy itself.

5/02/2013

When Hubris and Poverty Mix


I have just read a recent journal article by the brilliant scholar Peter Turchin, in which he elaborates on his theory of the dynamics of social instability over time and tests it on the United States from 1780 to 2010. Put briefly, his theory holds that one can expect a society to suffer greater social violence (such as riots or lynchings, as opposed to routine crime) in a relatively predictable cycle. The larger "secular" cycle occurs every 150 years; a smaller cycle of violence occurs roughly every 50 years, superimposed on the secular cycle. Thus in the United States, we had peaks of societal violence near the years 1870, 1920, and 1970, with the Civil War being the peak of the secular cycle. Turchin forecasts that the next secular peak should hit sometime around the year 2020. Turchin's previous work has detected the same sorts of cycles in societies from ancient China to revolutionary France.

Of course, detecting a pattern does not tell you what has caused it. Turchin's theory for when violence intensifies depends on two major factors. Both of these factors might derive from excessive population growth; in the early version of Turchin's work, he was focusing on agrarian societies in which population growth leads directly to food shortages. But now that he is considering Industrial societies, Turchin is focusing more on the immediate causes laid out below.

First, whether from excessive population growth or technological disruption or whatever, there emerges a labor glut. The average wage drops in response, leading to diminished standards of living. Thus you see larger segments of the populace who are in a precarious situation, with the potential for violent outbreaks such as labor struggles, or ethnic competition with minorities, or political upheaval.

Second, there emerges "an oversupply of elites." This can happen for a few reasons, and Turchin focuses on the economic one. The low cost of labor means that it is easier for those on the top to become far wealthier than they might have done in a more normal setting, leading to the accumulation of vast fortunes and a polarization of society. A consequence of this is that there is much more competition for the leadership positions in society, such as control of government offices. Politics becomes more nasty and partisan, leading in extreme cases to violent rivalries between elite factions struggling to secure their hold on power. Such violence is made easier by the larger number of poor, desperate people in society who can serve as a demagogue's muscle.

In Turchin's research, he finds that oversupply of elites has the strongest association with societal violence. This is easy to understand when one looks at places like the Philippines, in which politicians routinely employ armed militias to attack competitors (a horrifying example was the Maguindanao Massacre of 2009), or the Congo, which has been wracked with coup after coup. But even in the United States, a surplus of would-be leaders will tend to produce extreme ideologies, such as militant unionism in the 1920s, or the present upsurge in eco-terrorism.

Yet a disparity in wealth is not the only way to create an oversupply of elites. Joseph Schumpeter, in his book Capitalism, Socialism, and Democracy, proposed that the growth of an intellectual class was profoundly dangerous to society. Intellectuals, he argued, are alienated from the society around them and believe themselves to be the natural leaders of a new, better, society that they will create. Philosopher Robert Nozick expands on this theme, arguing that intellectuals are those who are most successful in the artificial environment of the classroom; when (after two decades of endless success in school) they are exposed to the unforgiving "real world," many of them cannot handle no longer being the top dog. Seething with resentment and humiliation, they turn to radical ideologies and reject the society around them. After all, they should be the leaders! Aren't they brilliant, aren't they better than those who got C's on their tests?

It seems to me that many more people today aspire to being an "elite" than ever before. And the expansion of university education is to blame. For people in the "softer" side of the academic world, college does a poor job of preparing one for success in the real economy. At the same time, college students are constantly being told that they are America's elite—never mind that nowadays, around 68% of high school students go on to college! Combine that with the prevalence of revolutionary ideologies on campus, and we have a dangerous brew. (No coincidence that the Peruvian Maoist group Shining Path was begun by a university professor, and its initial members were hundreds of his students.)

Not to say that economic factors aren't at work either. American politics is becoming a contest of billionaire against billionaire, quite tedious to watch, quite alarming to live through. It remains to be seen whether the growth of mass connectivity will break this dynamic, or feed into it.

(Have I mentioned lately that my new book is available on Amazon Kindle? It's called The Best Congress Money Can Buy: Stories of Political Possibility. You can read the first story for free here, and then buy it if you like. Enjoy!)

4/30/2013

And Now, For Some Shameless Self-Promotion


There's been a slight change to the layout of this blog. As you look on the right sidebar, you can now see a new section titled "My Books," with a pretty picture just underneath.

As one might surmise, this is because I have published a book—The Best Congress Money Can Buy, a collection of short stories about political possibility. It is presently available on Amazon Kindle and will be available in hardcopy as well within a week or two. The first story is available for free on the Amazon page (which you can access by clicking on the image in the sidebar) using the "Look Inside" feature. Check it out!

If you ever wanted to read about replacing taxation with crowdfunded governments, congressmen who sell their votes to the highest bidder, or what happens when prisons are replaced with workhouses, give my new book a try. Plus, if you are a member of Amazon Prime, you can borrow the book for free on Kindle, and I get paid anyway—which is a pretty sweet deal.

God-willing, this will be the first of many publications. If you like it, please let people know by leaving a reader review on Amazon. Thank you all! Without my readers, I'm just another political nut talking to himself...

4/18/2013

Investing in True Value


(I should preface this post by saying that nothing in here constitutes a recommendation to buy or sell securities, etc.)

Working in finance as I have for years now, I am growing more and more convinced that our societal attitudes toward saving and investing have gone haywire. We now assume automatically that when one saves, one is chiefly saving for retirement or for your children's college; that such saving is primarily done through the financial markets; that there is nothing strange about (for example) keeping part of your portfolio in bonds that pay 2% while at the same time carrying a home mortgage charging 4% or more.

Our assumptions about saving are driven by a combination of government policy, such as the creation of tax-advantaged retirement savings vehicles like the 401k, and a financial industry that is eager to market itself as the midwife of your future prosperity. Yet it seems odd indeed to save for a time that might be thirty or forty years off, when nowadays people can be laid off from their job at short notice—and if you want access to your 401k money earlier than the government prefers, you must go through lots of red tape to "prove" that you are in hardship. Otherwise, you are penalized.

It also seems odd that our first reflex is to use savings to buy securities. The long-term return for investing in the stock market is on the order of 7% or 8%, depending on your time period, and that assumes that you can phlegmatically wait out the bad periods without panicking and taking excessive losses. During the bad years, the destruction of your savings also causes immeasurable psychic harm to yourself and those around you. Stocks are still a decent vehicle for those with the discipline to invest over a 40-year window and then forget about it; their whole appeal is that your money can work for you without your personal involvement, freeing up your attention for other things.

Admittedly, some can make a study of market trading and, if they are of the proper cast of mind, secure annual returns that are much higher than the average—assuming that you are not one of the many who jump into such trading with dollar signs in their eyes, who then lose everything in a blaze of misplaced optimism. But here is another odd thing. To achieve above-average success, you must essentially turn stock market trading into a second job, or even a first job. Yet the whole attraction of stocks was that they shouldn't take up more of your time, no? And if you want another job that can turn your savings into profits, there are many industries with much higher rates of return on capital than stock market trading. Moreover, trading profits must necessarily come from someone else's losses; while in other industries, or other uses of capital, there is a net creation of wealth.

I've been thinking about this more because in the last six months or so, I tried my hand at options trading with disastrous results. At about the same time, I commissioned a pair of artists to illustrate a children's story I have written, which is nearly complete. The process of overseeing the book's creation has taken some work, but not much; it is also extremely fulfilling to see a work of art being created that will have my name on it. It was cheaper to commission the art than to trade options; and once the book is published, it would need only 20 books sold per year to achieve a higher annual rate of return than the stock market average. (It's a fun story, too, and should provide joy to many readers. To me, that's a definite plus.)

(Oh, and if you want to hear when the book is published, feel free to subscribe either here or on my other blog. The title is The Princess, the Dragon, and the Baker: A Hanukka Fairy Tale.)

There are many talented artists out there desperate for commissions, and lots of people with frustrated visions for artistic projects that they lack the skill to realize. Yet how many of these people are maxing out their retirement savings and handing their money over to Wall Street, instead of taking a fraction of that money and trying to bring something new into the world? Admittedly, many such projects wouldn't return a profit; but it would be a lot more fun than investing in WorldCom or Enron.

Other opportunities exist. Want a quick way to make 50% on your money? Buy in bulk at the grocery store. What about residential solar panels? Do you think you could beat a 2% return per year on them? What about investing in your own professional skills? For some people, improving their skills at working with others, or selling to customers, or marketing, or project management could easily increase their income far more than the same amount of money would earn in the stock market.

What about maintaining your health with a gym membership? Health care costs are a huge fraction of costs in retirement, and anything that can improve your health will pay off big. Plus, you'll enjoy your life more now, and you might even be more effective in your job.

I know people who are channeling excess savings into upkeep on their houses, rather than investing in the stock market. Stock market returns are unpredictable, they reason, and inflation is surely coming given our present central banking policies. But people will always need housing.

But for some reason, speculation is the order of the day for most people. Even those skeptical of the stock or bond markets often turn to some other form of sterile speculation, such as buying gold, a metal which is allowed to languish in inert bars rather than being turned into jewelry or circuit boards or something else of added value. In part, this is because we have been trained as a society to avoid the hard work of overseeing other people and creating new things. Far easier to speculate; you might lose your money but at least you don't have to talk to anyone in the process.

Take stock of your own opportunities. Is there any way that you can use your capital to add wealth or beauty or skill to the world, instead of merely chasing speculative profits? And would such uses actually be more lucrative than the Wall Street slot machine?

11/25/2012

Concerning Cooperatives


Thinking about how to make an economic system that is more humane, and less riven by class struggles, many thinkers have advocated for workers' cooperatives (the Distributists being one example). Cooperatives differ from the traditional capitalist firm in that workers share ownership and management of the company, as opposed to being salaried employees with no participation in the profits besides what management feels like giving them. They differ from a socialist commune in that there is still private property, and individuals can benefit directly from the success of the firm, which tends to mitigate the typical Socialist tendency of "They pretend to pay us, and we pretend to work" and lead to more creativity and enterprise.
With these advantages, why hasn't the cooperative become more popular in the United States? In part, because cooperatives come with some drawbacks. First, if workers share ownership in the company, what happens when you hire new people? Does that mean that you've just diluted the ownership of the existing employees? If so, then there will be a tendency of the owner-employees to delay hiring more people, even if it means sacrificing business opportunities. Or do different classes of employees have different shares of ownership? If so, then the cooperative differs from a typical capitalist firm only by degrees.
How much of the ownership of the firm accrues to the investors, as opposed to the employees? After all, without the initial investment, there would likely be no business in the first place. And asking employees themselves to buy in, as some cooperatives do, places a high bar in front of poor job-seekers.
Additionally, there will always be a place in a large-sized firm for experts of some kind, who will be paid more for their expertise. Should such experts, be they management or whoever, also get a disproportionate share of the company?
All of these questions have answers, and the answers will vary depending on the particular needs of each cooperative. But even if you could come up with an ideal structure for your own situation, it is far from clear that existing law could support the ownership structure you want. To my knowledge, in the United States the most common means for employee ownership of their company is the ESOP, or Employer Stock Option Plan, and these are typically structured so that employees have partial ownership without true control. While American law has well-understood prototypes for traditional capitalist firms, like the C-Corporation or the S-Corp, there are few prototypes for worker-owned cooperatives.
If such prototypes existed, then new insights could be gained as people experimented with them and figured out what works and what does not in different contexts. And cooperatives could become more accepted in modern industrial economies—which is not to say that they would displace the typical capitalist firm entirely, or even mostly. Each firm structure solves different problems. The best structure depends on your own situation, and the imperatives of your industry. Still, more options are good.
One handicap of your typical utopian social reformers is that they tend to focus on parapolitics, action outside the system, rather than trying to work within the system. True, such parapolitics often has an effect, but you only get mass adoption of your ideas in the face of total collapse of the system you are opposing. In this case, those who seek to have the cooperative form catch on in society ought to be lobbying for its inclusion in the tax code, the same way that a C-Corp or S-Corp is. With an off-the-shelf model to work with, with well-understood procedures for sharing ownership and profits, more entrepreneurs may elect the cooperative model without any political or social goal at all—which is how you win.
Those who have read my previous pieces, advocating for a populist politics based on left-anarchism (to which I am presently giving the working title of "Arcadianism"), will not be surprised to read that such reforms of the tax code ought to be a major part of such a movement's platform. Cooperatives match very well with the social mindset of the Left, and they also cut directly against the Progressive agenda of corporate titans serving as intermediaries of the state, dictating terms to their subservient workers on behalf of grand social policies. Aside from which, cooperatives or other forms of alternative organization such as sociocracy address the problem where capitalist firms become "indigestible lumps of socialism" (a quote variously attributed to David Friedman or Kevin Carson), because of internal power hierarchies that mitigate the advantages of free trade.
Those on the libertarian right ought to be pushing for such reforms as well—but I doubt they will, which is why we need Arcadianism or something like it to play the same role in the Democratic Party that the Tea Party groups have done in the Republican Party.