Mobile Versus Immobile Societies

Samual Huntington and Bernard Lewis have described the current conflict with Al Qaeda as a Clash of Civilizations. An interesting perspective along those lines that I hadn't seen before is being put forth by Reuven Brenner in the Asia Times in an article titled Unsettled civilizations: How the US can handle Iraq. He describes the clash as being between an immobile civilization and a mobile civilization. An immobile civilization is generally agrarian or evolved from an agrarian society:

The main feature of agrarian societies has been their immobility. In these societies - as in almost all societies until the Industrial Revolution, and in much of the world still today - wealth was derived from the land. Farmers learned the minute details of cultivating their lands, of adjusting to changes in weather conditions and of the soil. This knowledge is so place-specific that it is no surprise that farmers were severely taxed by a maze of institutions, whose role centered around the idea of defending "one's land". It's always the least mobile who bear such burdens. [...]

In a world where wealth is derived from agriculture and natural resources (whether forests, coal, gold, diamonds, oil), the control of the territory must be insured. Controlling them means protecting, administering, exploiting and occasionally capturing lands. Without such controls, another land or resource-based country's army would capture the place. The institutions, values, culture, indeed the whole outlook of these societies, is shaped by being wedded to the territory. And though there are variations across such cultures, they give birth to one type of civilization - call it the "immobile" one.

Feudal lords, aristocracies and landed gentry, armed forces and police, government ministries, priesthood and bureaucracies provided protection to a place and, at times, imposed threats on neighboring, similarly immobile societies. A weak king or a weak ruler left his subjects at the mercy of his rivals. That's why people paid taxes - call it protection money, if you wish. The amount people willingly pay for such protection bears relationship to the costs of moving to a different area, out of both the plunderer's and the tax authorities' reaches. When people could not thus escape, and taxes became exorbitant, the immobile people occasionally rebelled.

Kings, feudal lords and dictators of various persuasion understood these features of immobile civilization. They saw the relationship between the areas they controlled and those controlled by others as hostile. One's gain of territory was another's loss. It was a zero-sum game world. Anything that would allow people to move more easily from one place to another was perceived as clear and present danger. It weakened one's power - and the tax base. Over time, people specialized in the myriad institutions of "immobile" civilizations and had a large stake in its survival. Whether their belief that this civilization continued to be "the best" when population grew was sincere or not, is irrelevant: delusions can be powerful when they serve one's interests. And deeds matter more than words.

It is not surprising, therefore, to observe throughout history and up to now that many rulers and governments have done everything in their power to condemn any trade or any group that drew its power from mobility. They were suspicious of merchants, traders, bankers and financiers, even people dabbling in technology, unless these technologies addressed solving the immediate problems of the immobile population. Some or all of these occupations had inferior status - usury laws being an early means of rationalizing such status. And although initially traders did not have such inferior status in Islam - Mohammed after all was a merchant before becoming a prophet - by the 10th century business become marginalized. This happened with the closing "of the gates of Ijtihad" (independent reasoning as applied to the sharia) in the 10th century, with some sects taking the Koran far more literally than others.

The priesthood helped conserve the status quo by teaching mythologies in the Middle East and later in Europe. India's caste system reflected a similar frame of mind. The bania, or businessman, is placed third in the four caste hierarchy, behind the brahmins (priests, teachers, intellectuals - the myth-justifying and preserving group) and the kshatryias (landholders, warriors, rulers), and one step ahead of the shudras (untouchables).

People in mobile societies, on the otherhand, have access to market capital and institutions that enforce contract law outside of government fiat. And it is this freedom to enter contracts that is the problem:

However, there is nothing more threatening to the institutions of immobile societies - based on the idea that contracts are a matter of status and hierarchy, and that everything is prohibited unless explicitly permitted - than a move toward contractual law. It takes time to escape perceptions shaped over centuries by institutions fitting an immobile world, and move from "status" to "contract". [...]

The mismatch between customs, traditions, institutions, skills and language - all still fitting a smaller, relatively immobile population - and the institutions needed to give an increasing number of young people hope and a stake in the future brings about instability, much as it happened in Europe for centuries. A fraction of these societies' members understand what's at stake, are ready to make the necessary adjustment and establish the institutions that would allow making the transition toward a "mobile civilization". This group looks to the US for guidance and support, political, military and financial. In contrast, members of the "immobile civilization" within Islamic countries consider that without the US's support, the "mobile" groups would lose power. With traditional leaders at the helm, traditional institutions would be sustained, and the glory of Islam could be revived. [...]

And much of the dangerous European torturing of language notwithstanding, there is no reconciliation between the two values. There cannot be. In this sense, the Osama bin Ladins of this world are right too: one of these societies must give up their fundamental values - or fight.

Based on this categorization of the civilizations, the author walks out on a limb and makes recommendations:

If the lasting remedy for preventing terror is then to speed up the move toward establishing institutions conducive to a "mobile" civilization within Islamic countries, what can the US do? First, as can be inferred from the above, the US had little choice but use power: the chances of domestic forces getting rid of a ruthless despot sitting on billions of gallons of oil are slim, if not nil. But what should the US do now? As the historical evidence summarized here suggests, expecting that one can create democratic institutions in countries where large segments of the population are still mired in mazes of institutions fitting an immobile civilization, is a dangerous delusion. Of course one can write beautiful constitutions, set up courts, institute voting. But remember, all Latin American countries, and some Middle Eastern, did that, without bringing about much real change. Who will enforce the spirit of these laws and institutions? Ataturk, remember, did it with the backing of the army, which followed him, having been the hero of the Dardanelles during World War I, defeating the allies at Gallipoli and being the only undefeated Ottoman commander when the empire collapsed at the end of World War I.

Iraq does not have either such a hero at present, an army, or even a reliable police force, and it is not clear how long it would take to build them. Without the presence of a force capable and willing to act, institutions promising "democracy", "rule of law", and "right to property" are no more than facades, giving rise to another "cargo cult". This term emerged on an isolated island in New Guinea. During World War II, airplanes would regularly arrive full of cargo, part of which was distributed to the natives. After the war, the planes stopped coming. Distressed, the natives built thatched-roof hangers, a beacon tower made of bamboo, and an airplane made of sticks and leaves. Priests prayed for the cargoes to return. And they waited. Many countries around the world, in the Middle East and Latin America in particular, became such cargo cults. Yes, the terms and institutions sound familiar: they have constitutions, promise equality before laws, have courts, and people vote. These societies have adopted the facade of a mobile civilization, but for the moment, leaving out its content. There cannot be such a thing as "democracy" where there are no "democrats". There may be a few in Iraq, but it does not seem that there are too many.

There seems to be little choice but for the United States and its allies to do two things: leave no doubts among Iraqis that the army is there to stay to back the emerging institutions. However, in order to bring about a speedier transition toward long-term stability, the US can encourage the move toward institutions that are the backbone of mobile civilizations: those that diminish corruption and encourage trade.

To achieve this goal more quickly, the US could suggest creating an international public trust fund, which would offer each and every Iraqi a fraction of oil-revenues, drawing on the Alaska model (as explained in my previous article for Asia Times, Oiling the wheels of a tribal society November 20, 2003). The other portion would be transferred to central and local governments, through institutions held accountable for the spending. This arrangement would ensure that people have an immediate stake in the new Iraqi system (pretty much as the giving of land and apartments had in post-communist countries), and incentives to cooperate and prevent sabotage, and offer collateral to up-start small commercial entities. The act would also offer a clear signal that the US is there not as an army plundering the country's resources, but to enforce the establishment of the type of institutions that an oil-rich, ruthless dictator would not do, imposing heavy costs on the rest of the world. It would give Iraqis collateral and something to start a new life with. Also, with less money flowing through a central government's hands, there could be less corruption. [...]

With revenues from oil being widely dispersed, the chances of much funding going for rebuilding centralized military and police powers are diminished. "Power" is dispersed and brought closer to the people.

Yup, that's all there is to it. Hang about for a few decades until they evolve into a mobile society. Works for me.

In the Knowledge Lies the Wealth

Jim summarizes various aspects of the state of the world and other than expanding a little on terrorism, there is nothing else I would change in his summary. Based on the summary, Jim asks what I (or anyone else on this blog) think the president should do for the next four years.

That's a tough, multi-faceted question. However, I'll start by going out on a limb on the domestic economic front. I think the President should pursue policies that maximize growth over the short term without being too concerned about the long term.

While this may seem reckless, I think there's substantially less risk to this approach than meets the eye. The reason I think this lies in asking why we are so much more productive than we were 100 years ago.

Economic texts often describe four factors of production: labor, capital (equipment, previously produced goods, etc.), land (natural resources), and entrepreneurship. The reason we are able to produce far more today than 100 years ago is that we have more knowledge. The labor force has more information available, we have more knowledge about how to optimize capital equipment, we have more knowledge about how to find and then minimize the use of expensive resources, and we have better understanding of business processes, motivational management, marketing, and finance.

Knowledge dwarfs capital in importance when it comes to wealth creation. Imagine that there were two parallel universes. In universe A, one day all capital disappeared, but the inhabitants retained all their knowledge. In universe B, the inhabitants retained all capital but forgot most of their knowledge. I'm certain that in a few years time universe A would be far wealthier.

Germany had almost all of its capital destroyed in WWII. This is almost a perfect example of Universe A. Yes, the Marshall plan replaced some capital, but it was actually a fairly small investment. Within two decades Gernany had accumulated a lot of wealth.

Afghanistan under the Taliban is an example of universe B. They chose to suppress knowledge (other than knowledge of Islam) and even with international aid, they were living in complete poverty. They were basically choosing to live in the stone age.

So more knowledge about production and services means more wealth. And the beauty about knowledge is that it's indestructible and lasts a very long time. Sure, there's not a lot of use for the body of knowledge regarding buggy whip production any more. However, no matter what happens in the financial realm, we still have our knowledge and can recover quickly.

So where does knowledge regarding production and services come from? I think it comes from two sources: people with a need for the knowledge create it out of thin air (necessity is the mother of invention) and from people sitting around thinking with interest in some topic but with no particular need.

The first type of knowledge creation I call "pull knowledge" because I think it's similar to "pull content" on the Internet. Pull content is content that someone goes searching for on the web and they "pull" information from the sites that contain the knowledge that is interesting to them. As that person is searching, they encounter advertisements and other "push content" that's "pushed" on them. The person who sits around and thinks new thoughts needs to then push the new knowledge out into the world for it to have any effect. As a result I call that sort of knowledge creation "push knowledge."

Product development requires pull knowledge creation. Basic research is push knowledge creation. I think both types of knowledge are required for economic growth, though I'm not absolutely certain that push knowledge creation is strictly required. However, I am pretty sure that some mix of the two is optimal. A necessary condition for both types of knowledge creation is that the populace is adequately educated. Once that condition is met, pull knowledge happens spontaneously as part of a self organizing economic system. Pull knowledge is stimulated by potential demand and as a result is maximized both by minimizing the resources extracted from the economic system and keeping inhibitory factors such as regulation to a minimum. I believe economic growth strongly stimulates pull knowledge creation which then strongly stimulates economic growth.

Push knowledge doesn't happen spontaneously, and how to make it happen and pay for it has been, and will continue to be, a subject of great debate. I don't have anything to add to this debate except to say that from my narrow robotics entrepreneur perspective, it seems to be working pretty well. The research coming out the universities meets my needs and I have no complaints about the quality or quantity of work. The funding for robotics seems to come mostly from defense and defense related agencies, with some money from corporations and the NSF. The research seems to be well balanced between what is useful in the near term and what I think will be useful after ten years and more. While on paper the Universities seem to have extremely high overhead, I think that the extremely low pay for faculty just makes the overhead rates look high. I think that in the field of robotics, the system for creating push knowledge works quite well and I don't think it could be made significantly better.

So if we grow as fast as possible, we create knowledge which in turn leads to the creation of yet more knowledge and more growth. What a wonderful virtuous circle.

What if we grow too fast? What if we grow so fast that things get out of balance? What if we create some financial bubble or some other potentially catastrophic problem?

It's certainly possible. But please consider a couple of things. First, I'm not aware of any time that growth and the policies that help stimulate it ever causing any catastrophic economic problems, at least not by themselves. The Great Depression followed a period of rapid economic growth that helped create a stock market bubble and crash, but it was Hoover's tight monetary and fiscal policy that caused the depression, not the rapid growth of the 1920's. The 1987 crash hardly caused an economic blip because it was handled well from a fiscal and monetary standpoint.

The other thing to consider is that potentially catastrophic problems are always in the making and have little to do with growth. For example, the Social Security and Medicare liability issues will be even worse if there is no growth. Growth wasn't a particularly significant factor during the 16th century Dutch Tulip-Bulb bubble, but it happened nonetheless, and was followed by a long and severe depression.

Indeed, growth tends to blunt catastrophes because that catastrophe ends up being a smaller percentage of the now larger wealth of the country. So, on the growth front, I say "Let's Roll!"

Bret's Definition of Terrorism

Jim wrote an insightful post that I will respond to piecemeal. Unfortunately (well, maybe fortunately), I'm leaving on vacation for a week and a half starting Thursday, so there will be a bit of a break in the action.

Jim wrote:

Terrorism is an extreme form of intolerance combined with a fanatical desire for retribution of perceived wrongs.

I would say that terrorism is sometimes used by those with extreme intolerance and fanaticism, but I would like to propose a more general definition:

Terrorism is a military tactic, generally utilitized by organizations having no possibility of victory in a conventional or nuclear military conflict. As with all military tactics, the goal is to "defeat" the enemy, in other words to cause the enemy so much pain/cost that they become willing to take some action deemed important by the organization utilizing terrorism.

Terrorism usually (but not necessarily) contains a component consisting of violence directed at civilians. As such, it can generally only be used against populations that consider it highly immoral to intentionally kill civilians, even in military conflicts. If this were not the case, the attacked population, with its superior conventional military strength, would simply exterminate the population (civilian, military, and terrorists alike) partaking in, and supporting, the terrorist tactics.

I personally have difficulty distinguishing between terrorism and guerilla warfare. Since I have personally worked on weapons systems that have been deployed in Iraq and Afghanistan, I consider myself a perfectly legitimate military target, even though I've always been a civilian. In addition, the United States has intentionally attacked civilian populations several times (Hiroshima, Dresden, etc.), so clearly, it's a common conventional military tactic as well.

Osama's goal in using this military tactic called terrorism, is to destroy the West. And indeed, he considers that retribution of perceived wrongs. Those perceived wrongs extend all the way back to the crusades of the 12th century (he's mentioned those several times in his rambling video tapes). If he has his way, we will either all be dead or be muslims ruled by a caliphate headed up by Osama. As an interim step, he would probably accept that we completely leave all muslim countries and allow Israel to be destroyed. I don't see any realistic way to placate him, so we will have to kill him and his followers. Unfortunately, as Jim points out, military response to terrorism often seems worse than the disease, as it "tends to spread more intolerance even within the society that responds as well as within the receiving faction." So Osama may be able to bring down western civilization: if we don't respond, we're sitting ducks (for example, 9/11); if we do, we fan the flames of hatred and intolerance (for example, Madrid). Bummer!

More Jobs

More good economic news, this time reported in the The Guardian:

Another 284,000 jobs were created by the US economy in May as signs that the country's "jobless recovery" was over grew, Labour Department statistics showed today.

The number of new non-agricultural jobs exceeded Wall Street expectations of 200,000, strengthening expectations that the Federal Reserve would start raising interest rates from their current 46-year low of 1%.

Further evidence that strong economic growth was finally feeding into the job market was provided when jobs growth in April and March was revised upwards by a total of 74,000.

Over the past three months, the US economy created 947,000 jobs, the best three-month gain since the summer of 2000. [...]

Many economists now expect the economy to generate around 200,000 jobs a month for the remainder of this year - a pace that would meet the White House's once-derided forecast of a 2.6 million increase in job numbers this year.

Bret Still Feels Safer, Here's Why

It's funny (to me), but reading the Globe and Mail article referred to by Jim's post, made me assume that Chipman's comments were overwhelmingly negative. For example, the Globe and Mail uses adjectives like "dire" and says that the occupation and invasion of Iraq "proved" to be "powerful recruiting" points.

I then went and read Chipman's press release and it reads (to me) completely differently. To be sure, Chipman lists many criticisms (and I don't disagree with them), but it's much more balanced, with some room left for optimism, and little "proven" or "dire".

I've never argued that the Iraq war didn't have the potential to increase terrorism in the short term. I don't think even Bush claimed that there would be no short term increase. The long term is more important.

Even more important to me than the amount of terrorism in the long term, is the likelihood of the terrorist acts causing the downfall of western (and maybe all) civilization. The West can probably withstand suicide bombers and snipers and the like. After all, Israel does it, and we can probably get used to it too. And I think we'll have to. We can most probably even withstand a 9/11 size attack every few years and I think we'll have to learn to deal with that as well. I think we can most likely recover from chemical and biological attacks as well.

But what we may not be able to withstand is a nuclear attack. If terrorists manage to set an atomic bomb off some major U.S. city, that may well start a rapid progression towards the end of civilization. And then billions die.

I think it is unlikely that the terrorists can put together a nuclear weapon on their own. They will need a state sponsor for that. I think that Iraq was a potential state sponsor. Maybe not, but to me it's not worth taking the chance. I'm certainly willing to put up with more small scale attacks to potentially avoid the big one.

So yes, I feel safer.

Positive Iraq Excerpts

I've generally avoided posting many links or excerpts regarding Iraq as I'd assumed everybody has seen more than enough of them - both negative and positive (I certainly have). I've been told that may not be the case so I will post some positive ones over the next few weeks as I encounter them.

This one is from the May 25, 2004, NY Post:

The fact is that the news from the battlefield in Iraq these past five or six days has been remarkably good. The forces commanded and directed by the thug-cleric Muqtada al-Sadr are on the run or nearly destroyed in three different cities.

Sadr's uprising two months ago was the moment at which even passionate supporters of the war and proponents of the success in achieving civil order began to grow terrified that somehow the United States might actually lose in Iraq. So shouldn't the fact that we're routing him be grounds for some optimism?

It's very meaningful that other Shiite clerics in the city of Najaf now feel safe enough to issue what must be judged an astounding denunciation of Sadr in the past few days.

As reported on the brilliant Healing Iraq blog, Najaf clerics laid the blame for the entry of U.S. forces into that holy city: "It is the movement of Sayyid Muqtada [Sadr] that has encouraged the occupiers to cross the red lines," the senior clerics in Najaf wrote. "And it is clear that the organization of Sayyid Muqtada - and whoever follows the Sadrist movement - were the first to violate the sanctity of" the city's holiest shrine.

The Data Versus the Story

Jim writes:

I'm beginning to suspect that Bret does not believe anything unless it can be reduced to an equation.

That's true in some cases. For example, consider the article Jim cites about the Iraq war generating more radicalized Muslims. I can find thousands of articles in mainstream magazines and other media that also put forth this opinion in a compelling and convincing manner. However, I can also find thousands of articles in mainstream magazines and other media (and I'm sure Jim's aware of them) that put forth the exact opposite opinion in an equally (to me) compelling and convincing manner. In such a case as this, I choose not to form an opinion until considerably more data comes in, which, in this case, will take years or even decades. Especially since these mainstream media have reported all kinds of stuff that turn out not to be true. One prison scandal does not make or break a war effort. It is only one data point.

Tidbits About Nationalized Healthcare in other Countries

Nationalized healthcare can be beneficial but can also be expensive. France is having problems according to this:

France offers its citizens the best healthcare in the world, and it isn't only the French who will tell you so. The World Health Organization ranks France at the top of its list.

The trouble is, the country cannot afford it. The French public health insurance scheme is heading for a $15.5 billion deficit this year, threatening to bankrupt the system.

Canada's healthcare system is also having some difficulties:

Prince Edward Island Premier Pat Binns warned, "our current system is not sustainable, the principles of the Canada Health Act are at risk, and health care as we know it will not survive the end of the decade."

I really don't know that much about it, but Jim mentioned he was interested in understanding healthcare and these articles struck me as interesting.

What Goodwill?

A common theme from the Bush hating portion of the populous is that under Bush we've squandered goodwill (here, for example) or that Bush's actions have damaged our reputation. The actions that have alledgedly caused the squandering or reputation reduction are always listed (e.g., invading Iraq, not ratifying Kyoto, etc.), but never the mechanism, nor the evidence that our reputation was particularly high in the first place, nor any evidence that our reputation is lower now. For example, I've never seen a worldwide poll conducted that shows that a significant majority of the six billion people on this planet have significantly less respect for a majority of American attributes today than they did, say, five years ago.

But I also never paid it much attention since the goodwill or reputation thing seemed to be a touchy feely sort of thing that didn't have much intrinsic value. In other words, all other things being equal, I'd just as soon people around the globe feel goodwill towards us, but if they don't, so be it.

But Jim recently wrote:

The U.S.'s reputation in the world is perhaps the lowest it has ever been, seriously inhibiting our ability to lead anything globally.

So now I have something more concrete beyond the touchy feely realm. Our reputation is low, and, as a result, it's inhibiting our ability to lead. Now I'm curious. What sorts of things are we now unable to accomplish (that we want to accomplish) because we can't lead because our reputation is lower than it was that we would have been able to accomplish five years ago when our reputation was higher? Things that we can still accomplish but at a higher cost because of the lowered reputation also count.

Personal Bankruptcy

As Jim has pointed out, personal bankruptcies hit record numbers in 2002 and looked poised to do so in 2003. Given that our population increases every year, that's not surprising. Indeed, it wouldn't be surprising if the number of personal bankruptcies set a new record every year. It has no real meaning by itself.

Note that the bankruptcy rate (e.g. bankruptcies per thousand people) doesn't set new records every year. There was a significant increase in the rate during the Clinton years, but that seems to have largely leveled off now. There was also a bit of an uptick during this last recession, but that's typical and also not surprising.

Who loses when someone declares bankruptcy? Each of the players involved has different perspectives and the surprising answer is that from their respective perspectives, nobody loses.

Society and the economy as a whole don't lose. The same assets and wealth exist the instant before and the instant after bankruptcy. It's just redistributed. In fact, society gains because the burden of debt isn't as heavy and stressful to people so they can be more entreprenuerial and live closer to the edge which on average can be argued to allow them to live fuller, more interesting lives.

The party filing bankruptcy doesn't lose. That's why they filed for bankruptcy. Since their debt is erased, their net worth increases when they become bankrupt. Sure, there's significant disruption to their lives, but they were able to enjoy living significantly beyond their means, possibly for many years. After the bankruptcy, they can usually even still get credit, though on worse terms.

So that leaves the lenders. Lenders look at their aggregate portfolio. They have sophisticated statistical tools that predict bankruptcy rates for different classes of borrowers and set their rates accordingly. Some lenders actually court higher risk borrowers because they can charge an interest premium. So from their perspective, the bankruptcies were expected and paid for out of the larger pool of borrowers.

So society wins, the party filing bankruptcy wins, and the lenders win overall. What a deal!

Can You Own a Number?

I hereby copyright the number 2. No, you say? 2 is already in the public domain? Okay, how about 3? 4? 5? Okay how about:

15877575984212609504763115756706965291501878261851534087635
64891832003676869799297884259172109327688002986001480035883
23693523357010415077790251707695283137900002973952959101864
23581702643871648624628622998187372047371355120329162104057
208453097857559009117949551169826542064483858232069340889350149?

This number possibly has never been printed before. Do I own it now? By copyright law for the next 120 years?

Turns out this integer was generated by the expression 3⁶²⁵ (and then subject to double precision floating point roundoff error so it's not exact). And, of course, 625 is 5⁴. If I own the above big integer number, do I also own the expression 3⁶²⁵? And how about 3? 625? Subexpressions such as 5⁴?

Every integer can be generated by an infinite number of expressions containing all of the other integers. If I own the big integer above and all ways of generating it and the relevant subexpressions and integers, I own all of the integers. If I only own the integer but not all expressions and subexpressions that could possibly generate that integer, then my copyright protection is much less useful. In that case, anybody could copy a few numbers that could then be used to generate my number.

The contents of a CD or DVD is nothing more than a number. To be sure, it's usually a very large number, with possibly billions of digits. Somebody copyrights it and owns that number and every possible subsequence of that number as long as the subsequence is large enough to be deemed unique. And they apparently own every possible expression for generating that number as well. Otherwise, Napster could have simply created three different numbers for each CD, people could have downloaded those three numbers, and Napster would have done absolutely nothing illegally. If, after downloading the three other numbers, a user regenerated the copyrighted number, they would have violated copyright law, but not Napster. But if Napster can have the three numbers (which everyone knows full well can be used to generate the original number), Napster might as well be able to copy the original number as well.

So, we have a paradox here. Either a copyright holder owns all numbers, or he has virtually no protection.

I think that copyright should apply only to the number when it is presented to a medium that converts the number into something physical. In otherwords, if I have the number that represents Madonna's latest album on my computer (and I haven't paid for it), or even on a CD, it should not be a violation of copyright unless and until I cause that number to be played so that someone can hear it. I think this is the only approach to copyright that makes sense.

Crisis

I've noticed that Jim uses the word "crisis" a lot more than I do in the posts on this Blog (and comments). Jim has used it 15 times, six times for Bret (but 5 of those were quoting or responding to Jim), and Howie once.

I'm wondering if it's just coincidence, reflects overall pessimism/optimism, reflects an affinity for the word, or is based on a definitional difference. I have a hunch it's just a definitional difference.

I would say that we haven't really had an economic crisis in this country since the Great Depression and would like to know what Jim considers to be a crisis.

Must an economic contraction be at least 2%, 5%, 10%, 20%, 50%, or 80% to pass the threshold for an economic crisis?

Must the unemployment rate exceed 6%, 8%, 10%, 15%, 20%, 25%, 40%, or 60% to be called a crisis?

Or is there any other way the concept of economic crisis can be related to numbers?

I know, I'm a numbers guy and Jim is a story guy, but try to speak my language so I can better understand what a crisis is (in the economic sense). Or is this a case of not being able to define it, but you'll know it when you see one?

New Blogger Help

Anybody have any idea how to get the post window to wrap the text in this new counfounded blogger post window? How annoying!

April Jobs Report: It’s All Good

The April Jobs Report shows more good economic news:

On its face, the April jobs report released today by the Labor Department looks good, but the details look even better. Job growth was far above expectations in both the payroll and the household surveys, the rate of unemployment dropped to 5.6 percent, hourly earnings grew by 0.3 percent, and, best of all, the number of people suffering long-duration unemployment declined by hundreds of thousands. This is the first time in years that the labor markets show universally positive gains in every area—job growth, wages, and hours—in almost all sectors and across all demographics. The U.S. economy is moving from recovery into a self-sustaining expansion.

Payroll employment jumped by 288,000 workers in April, the second straight month of strong employment gains. The data also show that the number of working Americans is at an all-time high of 138.57 million, according to the household survey...

Not bad, given that Bush has been characterized by certain economists as the worst President for the economy since Herbert Hoover.

Senator Seeks Gods Resignation

This must be a misprint, but I found it funny:

Once those people are identified, Biden said, Bush must "demand the resignations for whoever is involved in this policy, and that includes Lord God Almighty himself."

Sorry God, you're fired!!!

Victor Davis Hanson

In today's opinion journal, Mr. Hanson has an excellent summary of the hawkish right's perspective. I'm not pointing to this article because I agree with its premises, or because I expect anyone else reading this blog will agree, but because I think that many people do agree with the article's contents, and it's clear why someone who did agree would then be supportive of Bush and his foreign policies.

Hypershapes

Here's a new saying to try:

"It's better than a badly angled million dimensional hypercube in the eye."

I'll bet you never heard that particularly nerdly variation of the "sharp stick in the eye" saying before.

Hypercubes are nasty things. Consider a unit-square. Each of the sides is one half unit from the center. However, the corners are farther from the center than the sides: about 1.4 times as far. The corners of a cube are even farther relative to the sides: about 1.7 times as far. For a four dimensional hypercube the ratio is 2.0.

For a million dimensional hypercube, the ratio is 1000. What this means is that if you take a 3 dimensional projection of the hypercube tilted at just the wrong set of angles, you can get one really nasty, spikey shape with some points coming 1000 times farther out from the center than others. Let's just say you wouldn't want to sit on one by mistake. If this blog supported pictures, I'd post the shapes here for lower dimensional hypercubes, so you could see what I mean, but I can't, so I won't.

One last thing about hypercubes. The number of vertices is 2 ^N where N is the number of dimensions. For a 1000 dimensional hypercube, there are far more vertices than subatomic particles in the universe.

Hyperspheres are as sexy as hypercubes are nasty. They are wonderfully smooth everywhere. Just as a sphere is more smooth and sexy than a circle, a 4 dimensional hypersphere is even sexier than either of those. An infinite dimensional hypersphere is infinitely sexy. You just want to touch one. It makes me drool just thinking about it. Well, maybe not, but you get the idea.

I know what you're thinking now that you've read the above, admittedly rather off-the-wall, paragraphs. Either Bret has lost his hyper-marbles completely, or has just jumped off the nerdly deep end. Have no fear, there's method to my madness. I'm going to write, over the next couple of years, a series of posts describing everything from Marxism to Bushisms as interactions of vectors in high dimensional hyperspaces. I'll try to introduce the concepts in hyper-byte sized chunks. Bear with me, as it will take a while to get to the meat. The meat is not necessarily useful, but it is (I think) interesting.

Borrowing Forever

Suppose I were to keep a diary. And suppose that for every two days I live, I write about one day of my life in my diary. Then, when I die, I will have written about one-half of my life.

Suppose an immortal deity were to keep a diary and also takes two days to write about each day of his existence. How much of his life will he end up chronicling? All of it! Because he will write about each day N on days 2N and 2N+1. There are no days that he won't write about.

The difference between the time limited and the forever applies to borrowing as well. If I borrow more than I pay off every year of my life, when I die there will be, by definition, unpaid debt that will never be paid and at that point my estate would be bankrupt (if not before). However, it's not quite the same for a government. If the U.S. government borrowed four percent of GDP each year forever, and the U.S. economy grew four percent each year, also forever, would the total government debt:

(a) Spiral out of control causing the government to go bankrupt; or
(b) Asymptotically approach 1.04 times GDP and level off?

The answer is (b). In other words, the government can borrow forever, and as long as there is some growth, the total debt as a fraction of GDP will approach some constant level. 1.04 times GDP might be a bit high, but if the deficit were only 2% on average, the total debt level would be 0.52 times GDP, a pretty manageable value. Higher growth reduces the level further. Inflation (i.e., higher nominal growth) reduces it further.

Indeed, that is why Social Security and Medicare dwarf deficits when considering future government liabilities. As long as there's growth, deficits today matter little in 50 years.

Also, even this year's deficit doesn't look like it will be as bad as first expected. According to the Washington Post, Federal Deficit Likely to Narrow by $100 Billion:

Smaller-than-expected tax refunds and rising individual tax receipts will pare back federal borrowing significantly for the first half of this year and could reduce the $521 billion deficit projected for the fiscal year by as much as $100 billion, Treasury and congressional budget officials said yesterday...

U.S. government deficits are way down on my list of worries at the moment.

Now I'm Worried

The IMF Boosts Economic Outlook for U.S. and Global Economies and gives credit for strong growth to Bush's 2001 and 2003 tax cuts:

The global economy, after being battered by recession, terrorist attacks and war, should grow strongly this year and next with growth in the United States hitting the fastest pace in 20 years, the International Monetary Fund predicted Wednesday. [...]

The IMF predicted the global economy would expand by 4.6 percent this year after growing by 3.9 percent in 2003. Those growth rates are 0.6 percentage point higher than the IMF's last global forecast made in September.

For 2005, the IMF sees continued strong global output of 4.4 percent.

For the United States, the IMF predicted growth this year of 4.6 percent, which if it comes true, would be the fastest growth rate since the U.S. economy expanded by 7.2 percent in 1984. That represented a 0.7 percentage point increase in the IMF's September forecast. [...]

However, the IMF downgraded its forecast for a number of countries in Europe which have been struggling to find the right mix of policies to bolster lagging growth. Countries using the euro, which has hit record highs recently against the falling dollar, will see growth of just 1.7 percent this year as the weaker dollar boosts the competitiveness of U.S. exports against European products.

The IMF gave credit to President Bush's 2001 and 2003 tax cuts and low interest rates engineered by the Federal Reserve for fueling this year's economic rebound.

The IMF so often gets things exactly backwards that now I'm truly worried that the global economy is about to collapse.

Trying to Understand

Jim writes:

It's hard for me to understand, Howie, how you can hang your hat on this premise.

It seems to me, that in many of the debates occurring in this blog, Howie and I disagree with Jim, but we (or at least I), understand his position and his reasoning. On the other, it seems that Jim not only disagrees with us, but can't even understand our reasoning, the implication being that our thinking is irrational. I don't think we're irrational. Instead, I think there are three subtle, but significant differences in our world views that, if taken into account, makes it fairly straightforward to understand how Howie and I can arrive at significantly different opinions.

The first difference in world view involves the perception of government. It looks to me like Jim believes the government is (or at least should be) moral and beneficial. Howie and I believe that government is inherently immoral but still beneficial. I think that there are more areas where government can be beneficial than Howie, but Howie and I share this underlying world view. Since Jim, Howie, and I all agree that government can be beneficial, it's no surprise that we support many of the same policies and don't support others.

Because I believe that most government means are immoral, I focus much more on the results than on the actions of those governing. I'm not so concerned when Bush and other government officials lie or use immoral means since the very existence of the government is immoral (in my opinion). On the other hand, if one were to think that government should be moral, then it would be very important that all government actions be (or at least try to be) moral. This creates a vastly different perspective of almost everything the government does.

The second difference is that Howie and I read different things than Jim and assign different weights to the information we glean from those documents. For many topics, the available information is extremely murky, at best. In Iraq, for example, I don't think anybody has a really good understanding of everything that's going on. Depending on what you read, the situation is either just terrible or going swimmingly well. Depending on which sources you deem reliable, a radically different world view results.

The last difference is our views regarding war. Other than some of those in the military, few people like war. However, given that, there is still a wide range of thresholds for when people consider war to be a possible option. I hate war, but there are a number of things I hate even more than war. Jim hates war, and there are probably substantially fewer things he hates more than war relative to me. Again, this significantly affects our fundamental views of the world.

Starting from different fundamental positions regarding perception of government, information sources, and war should make it easier to follow our logic. I'm not expecting Jim to agree with our opinions since he has a different fundamental viewpoint, but it should be possible for him to understand our logic.