The Mugwumpery

Lee Kuan Yew passed away yesterday.

Much to my regret, I never met him. I did not agree with him about many things.

But he was the greatest single benefactor of mankind in history.

As a direct result of the actions of Harry Lee and his “socialist” People’s Action Party, billions of people were lifted out of abject poverty, through reforms first in Singapore, then copied in China and in much of Asia.

Billions of people.

Today Reuters quotes Lee as saying in 1986 “We have to lock up people, without trial, whether they are communists, whether they are language chauvinists, whether they are religious extremists. If you don’t do that, the country would be in ruins”.

He outlawed long hair on men in the 1970s. Banned the sale of chewing gum. And, of course, many drugs.

Those things don’t fit with my politics. But look at the result. Singapore, once almost a synonym for filth and poverty, today is arguably both the freest and wealthiest country in the world. And – billions of people.

Deng Xiaoping, architect of China’s rise through market economics, based directly on emulation of Lee Kuan Yew’s policies in Singapore, famously said “it doesn’t matter whether a cat is black or white, if it catches mice it is a good cat”.

Lee’s cats caught mice.

And so, despite everything, I mourn Lee Kuan Yew.

And, about our political disagreements? Maybe I’m wrong.

[Yes, the 2004 version; I just saw it.]

For decades, movies about humans vs. aliens or humans vs. robots were thinly veiled parables about racism, xenophobia, loving thy neighbor, etc.

Especially so if one of the main characters is black.

No spoilers here, but at the start of this movie Will Smith’s character hates robots. Hates them for no obvious reason.

But this movie is not about racism or foreigners, or anything even vaguely like that. It is actually about robots.

By the end of the movie, Smith no longer hates robots. But not because he’s learned to be a better person. Oh, no, that is not the reason at all. Because this movie is not about that – it’s about intelligent machines.

I won’t say more – see it. But this movie rejects many standard Hollywood tropes and comes up with something genuinely fresh. And it shows that at least some people in Hollywood (Will Smith, anyway – who is also a co-producer) are able to make movies – even starring black people – about things other than racism. Imagine that!

And it has some important things to say about robots – things that may not occur to you until the next day after you see it.

It’s not an Asimov story – it just takes his robot stories as background. But I think Asimov would have liked it (so will Nick Bostrom).

It’s not a perfect movie, so one star off for that. But see it. 4/5 stars.

Arbitrage is the act of moving things from a place where they’re less valuable (cheaper, if you like) to where they’re more valuable (more expensive).

Normally the term is used in financial transactions – if a ton of wheat is worth $200 in Chicago and it’s worth $250 in Houston, I can buy it in Chicago, sell it in Houston, and make money. That’s arbitrage.

But – that’s just a financial manipulation; a trick played with numbers to cheat the system. I haven’t really created anything or done anything useful.

Right?

Tho it may seem that way, not right. Economics is not intuitive.

Suppose I have a pile of wood. It has some value. I get tools, work hard with them, and turn the wood into a house.

(If you’re outside America, assume a pile of stones – I know you people think making houses out of wood is crazy.)

The house is worth a lot more than the wood pile was.

This also is arbitrage. We don’t usually call it that, but it is – I’ve moved the low-value wood in such a way that it’s now a high-value house.

Yes, I used capital (the tools) and labor (the work) to do it, but that’s how I did it – not what I did.

This is where all wealth comes from – moving things around from less-valuable conditions into more-valuable conditions.

Capital and labor and technology are useful only when they help with arbitrage (digging holes and filling them up again uses labor, and shovel-capital, and scooping-technology – but doesn’t create any wealth).

Another example – when I was in kindergarten, sometimes I’d get sent with a salami sandwich (this was before in-school cafeterias). I didn’t love salami – I preferred tuna. But a friend had a tuna sandwich, and preferred salami. We’d swap. (Yes, I know that’s not allowed anymore.)

By swapping, we turned two not-highly-valued sandwiches into two more-valued sandwiches – because we each preferred the other’s sandwich. The sandwiches remained exactly the same. But the value increased – by arbitrage.

Back to the ton of wheat in Chicago. Let’s ask why wheat is cheaper in Chicago. There must be a reason, even if we don’t know what it is. Maybe there was a bumper wheat harvest in Illinois (where they keep Chicago), so there’s more than people can eat. Maybe they like rice better. Whatever.

In Houston – the opposite. Maybe there’s a pizza holiday that uses up lots of wheat. Or a bad harvest in Texas…again, whatever.

The point is, by moving the wheat from Chicago to Houston, I’m moving it from where it’s needed less to where it’s needed more – afterwards, there is less excess wheat in Chicago (and more valuable money), and less shortage in Houston. So I made both places better off.

Which means it was not a trick – I really did do something useful. I created wealth. And some of that wealth I get to keep (some will go to the seller in Chicago, and some to the buyer in Houston – exactly how much depends on negotiating skills, buy/sell spreads, etc.).

So arbitrage is where all wealth comes from. It is the sole reason we don’t live in caves anymore.

Murphy’s law anticipated the Everett-Wheeler conjecture (viz., “all permutations will be explored”).

Which I find ironic, considering that neither Everett nor Wheeler wrote about keyed connectors at all.

Google sells the use of user information.

It is not the same thing.

Selling “Joe Blow works at Acme Corp and shops for sex dolls” is selling user information.

Selling “I will advertize your sex dolls to people who shop for them” is selling the use of the information. Only Google knows you are Joe Blow at Acme with an interest in sex dolls. The advertiser does not; they just get a service that makes use of Google’s knowledge.

Yes, Google knows your stuff. Yes, you have to trust them with it.

But they don’t have to – and don’t – sell your info in order to profit from it.

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 still 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:

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:

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…