…but capitalism doesn’t have to.

The poor popular reputation of free markets may be connected to the prevalence of deceptive advertising, especially for consumer goods and services.

Spend just an hour watching TV after midnight, and you’ll be bombarded with ads for penny auctionsinfant life insurance, sports betting (you’ll win thousands), anti-impotence drugs (or is it penis-lengthening? They’re never clear.), etc.

As Michael Caldara said in the first link above, “we don’t hear calls to regulate infomercials, get-rich-quick seminars, and fad diets”, but – perhaps we should?

I’d prefer vigorous enforcement against common-law fraud, but (in my humble opinion; don’t sue me,) these ads intentionally mislead the ignorant and incompetent. That’s why they air when most successful people are asleep.

To many people this gives the impression that capitalism is little more than legalized theft and deceit. A crackdown on these obvious (to me, anyway) cases of fraudulent advertising might go a long way toward improving the reputation of both government and business. Markets only work to society’s benefit, not to enrich those with the least scruples, when the basic rules of honest dealing are enforced.

If that’s too hard, another path would be an organization of ethical businesses that observe a code of honesty (complete with a membership seal).

This is not 100% cranberry juice. It's 100% Juice Cranberry. Which of course is entirely different. :-(

This is not 100% cranberry juice.
It’s “100% Juice Cranberry”.
Which of course is entirely different.

Where wealth comes from

June 29th, 2014

Our ancestors lived in caves, infested by parasites, chased by predators, constantly on the edge of starvation.

We live better than that now. We have nice things like houses, and medicine, and airliners, and indoor toilets, and the Internet.

How did that happen? Did we steal all that wealth from some other cavemen? From space aliens? No. People created wealth. Out of nothing – just plants and animals, dirt and air, and their own cleverness and work.

Some people are better at creating wealth than others. Just as an Albert Einstein is rare, or a Tiger Woods, or a William Shakespeare is rare, there are a few rare people who are vastly – incredibly – better at creating wealth than most everyone else.

Nowadays, these type of people become billionaires. They may not be better than most people at physics, or golf, or literature, or in any other way, but they have a rare talent for creating wealth.

And without wealth, we’d all still be living in caves.


Nota bene: I’m not saying that all billionaires get their money this way. Obviously, some get it by theft, cheating, or other types of crime, legal or not. But some really do earn it. William Jennings Bryan (“No one can earn a million dollars honestly”) was wrong.

Modern tech makes looking up owners from plate numbers trivial – you don’t need a plate scanner, you just need a camera and Internet connection.

When introduced 100 years ago, plates could have had the owner’s name on them – but that was considered an unreasonable invasion of privacy. Quasi-random plate numbers made looking up owners possible, but intentionally difficult and slow.

Technology has changed that. We accept plates now only because we’re used to them. Unless you think it’s also a good idea to require pedestrians to wear a giant sign with their name on it, it’s time to get rid of license plates.

Cars already have VIN numbers stamped all over them – that is enough. The VIN is printed small and isn’t readable by every passing person.

If you get pulled over for a traffic violation, then the cop can ask for your vehicle paperwork.

I’m going to start making a list of the elements of political dysfunction in the US. (These may apply to other countries as well, but I’m not familiar enough to say.)

From time to time I’ll come back to this post and add more. Maybe.

  • Good intentions
  • Stupidity
  • Unreasoning hatred

These three seem to make up the core of both left and right in the US.

Good intentions are what every normal person has with regard to their political views. Self-interest biases these of course, far more in some people than others. But most non-psychopathic people sincerely believe that society would be best off following their own political views.

Stupidity is also common to us all. Compared to the complexity of the world and of society, we are all stupid – some much more than others. But none of us can really predict the long-term results of the policies we advocate. Every action has direct effects, secondary effects, tertiary effects, etc… without limit. And there is no guarantee, or even reason to think, that the earlier effects will be larger than the later ones.

The unreasoning hatred is of the opposite side – it reflects the refusal to accept that those who disagree may have valid reasons for doing so, may not be motivated by self-interest or hatred, and almost certainly sincerely believe in their own positions.

Then we have the common human failings that affect us all:

  • Refusal to admit when we’re wrong – because of the effect on our reputations
  • Refusal to compromise, even if the compromise would be better than the status quo
  • Refusal to allow experiments, because of the chance that the experiment might prove the other side correct

Not that we’d ever admit these are the reasons for our positions.

I’m sure there’s more I haven’t thought of…

Somehow the very words “Nazi” and “Hitler” have become almost unique synonyms for pure evil.

Godwin’s Law has formalized this – the moment “Nazi” is mentioned in any discussion, rational debate stops and you’re in the territory of moral absolutes.

For example, we can’t complain about over-the-top “Gestapo” tactics when SWAT teams are used for everything from drug raids, to high-profile debacles like Waco, to desperados wielding open wireless routers or rescuing Bambi.

No, we have to call these “Stasi” tactics. Because no matter what the reality, it can’t possibly be as bad as – or even rationally compared to – the Nazis. By definition.

And we have to invent new terms like “crony capitalism” instead of using the proper word “fascism”; because as soon as you say “fascism” you’re a crazy kook with no sense of proportion.

Not that Nazis weren’t evil – they were every bit as horrible as their reputation.*

But why are they perceived as uniquely horrible? What about Pol Pot, or Vlad the Impaler, or any number of historical conquerors who routinely murdered every single man, woman, and child in a captured city?

The Nazis were indeed evil, but the only thing unusual about their evil was how efficient they were at it and their proximity to the center of Western culture.

I can’t think of another defeated enemy that has become so demonized.


*If you like horror literature, try The Theory and Practice of Hell (Eugen Kogon, 1946). Unfortunately, it’s non-fiction. (Not for the weak of stomach.)

Pope Francis is quoted in the March 8 2014 Economist:

“While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by the happy few,” he has written. “This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control.”

No, “the absolute autonomy of the marketplace and financial speculation” is precisely what we don’t have. As an old-time socialist friend once said, “The main problem with capitalism is that we don’t have it.”

His Holiness has it exactly backwards, and in two independent ways at that.

First, “the earnings of a minority growing exponentially” is not a problem unless it comes at the expense of others. Reminds me of “Tax the rich, feed the poor/ till there are no rich no more”; it is poverty that we want to eliminate, not wealth.

Second, and less obviously, the reason crony capitalists have enormous fortunes is precisely because politicians do have the power “for the common good, to exercise any form of control”.

As long as politicians have power, whether “for the common good” or with any other excuse, to pick winners and restrict competition, people will find ways to corrupt politicians to get these goodies.

Whatever the original motivation, regulators are always and everywhere captured by the regulated, who write regulations for their own benefit.

Capitalism works for the public good only when people are allowed to freely trade with one another without permission or blessing from heavily armed government thugs.

The things Pope Francis doesn’t like about capitalism are not part of capitalism. They are part of the doomed attempts to “regulate” it. His Holiness doesn’t understand what capitalism is. Neither do most capitalists. Or most Republican “defenders of capitalism“. Maybe we need a new word.

Yes, everyone’s opinions tend to be self-serving.

That does not mean they are necessarily wrong. Some people may hold self-serving opinions that happen to be correct.

We must examine the validity of the arguments and data backing a viewpoint, not the motivation.

I read today that Pope Francis thinks the global economic system shouldn’t be based on “a god called money”, and that “Men and women have to be at the centre (of an economic system) as God wants, not money.”

Maybe he’s right. Our economic system should be about people – that’s who it is supposed to be for.

We should have an economic system that encourages people to help each other out, and voluntarily give one another the things they need. One that works without threats and coercion, and which makes people want to be nice and helpful to each other.

Here’s an idea I’ll call “smile economics” – it’s based on an economy of “smiles”:

Each time someone does something nice for a stranger (helps them out, gives them something they need, etc.), that person should give “smiles” in return – to show their appreciation of the nice thing. It might be a lot of “smiles”, or just a few, depending on how big the favor was.

(This would be mostly for use with strangers – people tend to be naturally nice to their friends and relatives.)

The people who accumulate lots of “smiles” would be those who are especially nice and helpful to others. Of course most people want to be perceived as nice, so wanting to have lots of “smiles” would act as a social incentive to encourage everyone to be nice to each other.

Now, when someone really wants a lot of help or something from other people, they could offer a lot of “smiles” for that help. Other people would know that they can really help someone a lot, if that person is offering a lot of “smiles” for the help. Because people want “smiles”, and everyone would know that others wouldn’t offer to give away many “smiles” unless they really wanted the help very much.

Here is the best part – even people who are not naturally nice – selfish people - would want to be nice, in order to get “smiles”.

Why? It’s true that nasty people often don’t care what people think about them. But in order to get help and other things they want from strangers, they’d need to offer “smiles”. Probably they’d have to offer even more “smiles” than nice people, because people don’t generally want to help nasty people. So, in the “smile economy”, nasty people would have to to be nice to others, in order to get the “smiles” they need to get the things they selfishly want for themselves. (Because, in this system, they can’t just buy what they want with money – they need “smiles”.)

“Smile economics” actually makes nasty people want to act nice, in order to satisfy their own selfish desires. It actually makes their own selfish interest drive them to be nice to other people! How about that!?

Of course, to do the most good, the system should be utterly universal and work between strangers of all races, religions, and nations, no matter where they are. We want to encourage people to be nice to one another no matter who they are. Anyone who said, for example, that someone in Brazil shouldn’t do nice things for someone in China (or any other pair of countries) would be seen as evil – because wanting people not to be nice to each other is evil. Nobody should ever tell anyone not to be nice to one another.

What do you think?

Addendum – A few people who have read this think it won’t work because people can just make fake “smiles” all the the time (as many as they want) in order to get things. They have a point. So let’s say that everybody gets a certain limited number of “smiles” to spend – maybe eight or ten each day (they can save them as long as they like).

Addendum #2 – In case it isn’t clear, it doesn’t need to be “smiles” that people give as a reward. It could be anything that’s limited in number which other people value – for example pretty marbles (if they’re hard to get), or shiny rocks, or little pieces of gold. Or what the Spanish used to call “pesos de ocho” (pieces of eight). Or Greek drachma, Pakistani rupees, or Thai baht. Japanese Yen would work. Or Bitcoins. I suppose those all have their pros and cons, but it doesn’t really matter.

You get the idea now, I’m sure. Pope Francis is going to love this idea!!

This turn of events I did not expect. Perhaps I should have.

Barack Obama who, famously, received the Nobel Peace Prize for not being George Bush…turns out to be George Bush, after all!

Will the Nobel committee ever recover from the ignominy?

Did you know I invented many of the key technologies used to drive today’s world?

It’s true – I did. All by myself. I ran across this yesterday:

Inventing deconvolution...in 2011

It’s a 2011 scribble from when I was inventing deconvolution.

In fact I’ve invented so many common technologies that I’ve forgotten about most of them. A few that I do remember are:

Technology Concept Implementation Notes
Dither ~1974 - As a child playing with circuits.
FIFO queues 1978 1978 I called them “circular buffers”; never heard of terms “FIFO” or “queue”.
Remote Desktop[1] ~1980 - I was going to do it for the TRS-80 (Models I and III) and call it “Guest/Host”.
Web prefetch ~1984 - Well, prefetch for web-like services, anyway. Pre-fetch the results from each of the 6 or so menu options on CompuServe Information Service (CIS), to save download time on your 300 bps modem.
Key splitting ~1990 - Split a key into N parts, of which M (M <= N) are needed to use the key.
Google Earth 1990 1991 I started a company to do it. We were going to use CD-ROMs, because they hold so much data. Sigh.
Internet-controlled thermostat 1997 - From my notes: “Thermostat with Internet interface so you can remotely set and test (and read history?) via Internet (or POTS); for travelers.”
Superresolution ~1999 - Motivated by early digicams with lenses that could resolve more detail than the sensors of the time.
Deconvolution ~1999 2011 For lensless imaging. Dropped it when I discovered it required far more bits of ADC than available in real sensors (or even real photons).
Camera orientation sensor ~2001 - Gravity sensor in digital camera detects if it’s being held in landscape or portrait orientation, then sets a bit in the image to display it properly.

Of course, I don’t claim to have been the first to invent any of these things.

The astute reader will note that all these invention dates are all long after these technologies were already well-known. That’s because I re-invented them independently (having never heard of them). The chance to do that is one of the perks of having little formal education.

I’ve often thought that more than 99% of what any individual learns during a lifetime is lost when they die – only the tiny fraction of 1% that gets written down, successfully taught, or copied, benefits anyone else. It’s a terrible waste.

And this shows that even for that tiny fraction of 1% that is written down, many people (perhaps most?) end up having to re-discover it from scratch, either because that’s easier than understanding someone else’s explanation, or because it’s too hard to find out that someone else already has solved the problem.

Makes you think a bit about the meaning of “obvious at the time the invention was made to a person having ordinary skill in the art“, doesn’t it?


[1] I did have a little bit to do with inventing RDP (the first invention, that is), but that wasn’t till the 1990s…