I remember being very little, and going with my grandmother every week to visit her my great grandmother in her care home. She really didn’t like her mother, form what I’ve heard of her she was pretty emotionally abusive, but because of what I suppose was familial loyalty took care of her as much as she could. On the car rides to and fro she’d complain to me, and would tell me not to talk unless one of them asked me a question while we were there. 

At her funeral, I asked why she was so upset if she didn’t like her. One of parents took me away (I don’t remember which), and she cried a fair bit. Little me made some bad decisions.

From what I’ve learned since, she wasn’t upset with her for dying. They really didn’t like each other at all. Sure, death is intrinsically sad, but I still don’t entirely understand. 

I’d say that familial loyalty to me was weak because my parents weren’t very nurturing or supportive. My mother trivialized all of my problems when I came to her, and never really talked to me unless she wanted me to do something or stop doing something. My father thought that everything I did I did to upset and undermine him, and made it a point to reduce me to tears with insults and threats (mostly to kick me out of the house) every few months when I got older. But it sounds to me like those things were true for her too.

I certainly don’t wish them death. I’m still young, and so the wounds are rather fresh. I can see myself being sad, but I can’t see myself attending to their deathbeds or weeping like she did over their graves. I wonder what it is that makes death hurt like it does.

Maybe I’ll feel differently when I get to be her age.

For a psyche test, and were in the chapter about test standardization and different intelligence metrics. We had both long since insisted that the other was smarter, and so on a whim I decided to take an IQ test. She did as well.

We both got the exactly same score. xD 138. We both took it twice to make sure, I suspected that it would be off the second time, but nope. 138 again. 

A happy coincidence. I’ve been having a lot of them lately. 

The second barrier to prosperity is the monopoly, discussed extensively in the previous section. Monopolies cannot be tolerated because of the destruction that they bring, and so the government has only two (or possibly) three options for dealing with them: breaking them up, or “buying in”.

Breaking up a monopoly is difficult. You can either force the the company to split in to pieces, which really encourages oligopoly markets (which are scantly better than monopolies), or force them to break down the barriers to entry for their market (which is impossible in many cases). When you can’t break up a monopoly, or don’t want to for practical reasons, the government has to “buy in”. Buying in doesn’t necessarily mean owning the company, it just means that the government takes control of it through powerfully restrictive regulations. The latter is better than the former by most metrics, and here is why: buying into a company is expensive, and risky if it goes out of business, and does not affect the entire industry in the case of an oligopoly market. It is favorable by some metrics however because it compensates the corporation for the intrusion, and allows the government to do somethings which they may be restricted from doing otherwise (for example, if the government needs information from a company which it is legally unable to acquire, it can simply buy a controlling interest of the company and then be entitled to the information).

Fierce market regulation of monopolies (utilities) is the norm in most industrial countries these days. One of the most classical objections is that it interferes with an industry, and hampers it. Let me start by saying that hampering it is kind of the point. Monopolies are in the position to screw their consumers, and the government has to step in. Of course it is going to cut into their profit margins, because screwing over the people is incredibly profitable. Again, corporations are not evil; simply amoral. We cannot blame them for trying to siphoning undue amounts of capital from the society and concentrating it into their hands because they can’t be efficient producers without those unfortunate traits, but we do have a duty to prevent them from doing that. If a monopoly company or an oligopoly industry is doing something that the people don’t want them to do, like unfairly raising prices or creating false scarcity, the government should feel free to legislatively ask them to cut it out. Corporations are remarkably easy to control with tax incentives and relations, and the government need not shy away form exercising that control. 

Utilities should always be highly regulated by the government in the fashion described above. A utility market has a high barrier of entry (requires lots of capital to enter), and is a service that people will in large part pay for even if the price was massively inflated. Examples of this include water, electricity, internet, and credit. In the modern world, the latter two are not regulated as utilities and as a result, the consumers are being exploited to an unacceptable degree.

Monopolies and oligopoly markets are not the only people that require regulation, as a note. When whole industries are doing things that are detrimental to society, a government should also feel free to restrict their activities within reason. As long as the government is affecting the entire industry equally, regulation does not present a barrier to competition, and in most cases will not create a barrier to entry in the marketplace.

The second tool that the government has to counter depression is far more overtly effective, conceptually simple, and by necessity less punitive. Fiscal policy is when the government adjusts the way that it collects and spends money to encourage people to spend money. The long and short of it is that when people aren’t spending money, the government can to keep things going. By pumping a whole bunch of money into the economy they can give people money, which they can then spend. With a progressive tax system and wellfare (to be discussed later) much of it takes place automatically. As wages fall people are taxed at a lower rate, and begin collecting state wellfare. This, however, doesn’t return nearly as much to the system as the system took from itself. The major tool of fiscal policy is financial stimulus. The government always needs to spend money on things like roads, and schools, and hospitals. During times of financial difficulty the government should go on a spending binge, ensuring that there is labor to be done and wages to collect for its people. The government can also lower taxes, but because of political difficulties they tend not to be raised again after the crisis, which leads to a debt spiral. In general, the tax rates should not be changed unless the changes are meant to be permanent.

Keynes’ major hypothesis concerned this, and Hayek, his biggest contemporary critic, had a lot to say about it. Much of what Hayek put forward were really just counterexamples to undermine Keynes, but one of his criticisms really resonated with me, and I would expect many others as well. Spending isn’t free. Of course the government can spend its way out of a pit, but the money has to come from somewhere. The government has two options here. One is monetary policy, and creating money, that can cause hyperinflation if managed poorly though, the other is borrowing from banks or other governments. These debts can be repaid later, and if it is done so responsibly the government might actually save money. In difficult economic times, labor is substantially cheaper. If the government waits for a crash to build all of their roads, they can get them built for substantially less money than it would take them at the hight of the financial cycle. Then, when the people are back on their feet and tax revenue is rolling in again, the government can pay back their debts. 

What if the government cannot borrow form other countries or banks at a reasonable rate though? Lets go back to the currency creation answer, and how to manage inflation. In essence, inflation is an easy path to redistribution. People with money will see it’s value decline, and when the government hands the money to the poor their overall net worth will rise. The poor spend a higher percentage of their income than the rich, so this will stimulate the economy. As long as the government doesn’t constantly print more and more money, and cause panicking, inflation can be managed. While drawing money in temporarily from other countries and from nowhere is preferable, the government might be better positioned to temporarily raise taxes on the upper class, in effect forcing them to spend their money (by having the government spend it for them) to get the economy moving again. This could disenfranchise them however, which isn’t good. In most situations, fiscal policy works wonders.

The first barrier to competition and prosperity is the fluctuations of the financial cycle. Capitalism has a very simple formula: the more money spent in an economy, the more jobs available to that economy. When people spend and consume, more labor is needed to satisfy the new demand (so more jobs are created), and when those new people have jobs they spend more money, which causes economic growth. The other side of that coin is that when people stop spending money, companies dismiss their workers because they need less labor. This forces them to stop spending money, which leads to more people being dismissed ad nausium. 

Before I go on, I feel I should explain the link between competition and prosperity. This was discussed in “the virtues of competition” part of the previous section. Sumatively, competition ensures fair conditions for workers, fair prices for consumers, and a high quality and great variety of goods, and with the constant turnover of the monetary ruling class brought by fiercer competition a greater equity of wealth. A lack of competition ushers in exploitation of the workers and consumers, a low quality and variety of goods (because the need for innovation is gone), and exacerbates wealth inequity to a great extent. As you can see, prosperity follows competition in a society, and capitalism alone is in no position to provide it. 

So lets talk about the tools that the government has to prevent the latter part of the cycle: monetary and fiscal policy. Monetary policy is when the government manipulates the supply of money that is in a society to encourage people to spend money. It works by the government essentially creating money out of thin air. This is going to get a bit technical. The total value of all of the currency that the government is determined by the demand for it internationally. If the people with the country’s currency are using it to buy goods from other countries, they need to exchange their currency for the currency used in the other country, increasing the demand for that currency and decreasing the demand for their own. In essence, although this is a simplification, the more people buying goods with the currency, the higher the value of the currency is. The government can lower the value of this currency by creating more of it. Demand fluctuates when people use it to buy and sell goods, and the supply fluctuates when the government either creates or destroys money. As a side note, the government gets the money it creates into the system by loaning it to banks usually (occasionally the spend it in stimulus). When they return it, they simply destroy the money. Creating money is good because when people have more money (even though the value of their money doesn’t change) they are more likely to spend it, and specifically when the banks have more money they will lend more of it out, which gives people more money to spend. 

The major criticism of this policy is that it creates inflation. That is, money gradually becomes less valuable. The reason for this is that the government doesn’t destroy nearly as much money as they create, because it would raise interest rates and discourage spending. As a result of that, society’s currencies become gradually devalued. It is generally accepted that a low and stable rate of inflation is a cost that the society can just consume to prevent economic depressions, which would be far more destructive. Keynes and Hayek spent the much of their lives debating this.

This could be very interesting. I was a little worried about them drawing the ire of Mossad for a little while, but they’ve pissed off arguably more frightening entities before.

Who is more powerful, the defence department of Israel  or the combined cyber-espionage might of Mastercard and Visa? We are about to see. 

Hopefully they will remain on top of the invisible arms race, because I trust them a hell of a lot more than most institutions. At least their motivations are pure.

http://www.anonpaste.me/anonpaste2/index.php?0c3787b9e504b257#4vuPTzmEXo9+uyq78aSSgvqJgb1nV5DwOZXdau60ajQ=

Life is so freaking busy lately, in a good way. I have to write one and a half pages for the next eight days if I want to keep up with my workload as of today. But I am interested in writing both papers. *

I started up playing Homines Inter Deos with a group of awesome people, and tomorrow I’ve got to GM for a few hours and I am completely unprepared. 

And I started dating someone a few weeks ago and we really like each other, so being all lovey dovey is cutting into my homework time.

Too many things are all happening at the same time. ;__; I hope I can keep my head above water.

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* One on Court Government in Canada and the other on The Professor and The Madman, which is the best work of fiction I’ve read in a while.