City Journal Summer 2014

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Summer 2014
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Yevgeniy Feyman
When Culture Trumps Economics « Back to Story

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I would argue the culture that enhances or creates economic incentives is one that directs motivation (need or desire) towards successful examples. Lemon aide stands are now illegal for little kids and the only local examples of entrepreneurs in inner cities are the sellers of drugs. 50% of jobs are created by small businesses yet it seems only our immigrants understand that what work is. The intelligentsia tells us the only way people can succeed is to be an engineer or brilliant programmer to get ahead in life. We've become a nation looking for a job instead of looking for opportunity.
Pure meritocracy implements natural inequality, and inequality is innate

Charles Murray identified this thirty years ago in the IQ wars

I was a social science phd IQ quant then

commonsense also identifies it
- - -
the playing field is not level, and meritocracy is never pure, 'market' forces include absolutely anything at all

unions are economic players, government via minimum wage is an economic layer

all economic regulation is a market player

the question is meaningless

capitalism is usually conflated with profit motive, which helps to demonize and stupidify the debate; as in profits are evil per our current health economics debate

capitalism is more narrowly and usefully contrasted with the labor theory of value, value adding via capital

labor theory of value: the sweating worker, or geek techno creates welath ie adds value and therefore should be the beneficiary of the value added component

so what does the capitalist do to add value, lends money to enable the matter

what is the cap's rate of return,

answer? try free markets, subject to law enforcement which distorts free markets,
--

limitations on free markets within BOTH capitalism, and non-capitalism also

(1) monopoly (distinguished from economies of scale and
(2) government 'rentiers, ie
(a) economic regulation
(b) and crony capitalism
(c) various barriers to entry, regulations grandfathering.

for both capitalism and non-capitalism, interference with free markets, and emergent inequality, should be criminal

with criminals subject to capital punishment for capital crimes, including sterilizing the children of capital criminals to expunge the demon seed from the gene pool

the alternative is theft of value by forced equalization

equalization = theft (vs property = theft)

joke - why does marx only drink herbal tea
b/c all proper tea is theft
No thought seems to have been given by Feyman to the question of education. In Britain later readers are penalised throughout the school system and the prisons are populated by those "who can't read".

Children go into full-time school at too young an age for many of them, particularly boys. If children began formal education at the age of eight, or even 10 or 12, there would be very few who would not learn to read. The Scandinavian countries seem to understand this.

Later readers tend to be spacial, technical, artistic, creative thinkers who are severely penalised by an education system which has unrealistic expectations of very young children. So a great deal of human capital is being stunted and/or destroyed before it even gets a chance to show itself.

Since the system isn't going to change any time soon I would suggest home education.
No thought seems to have been given by Feyman to the question of education. In Britain later readers are penalised throughout the school system and the prisons are populated by those "who can't read".

Children go into full-time school at too young an age for many of them, particularly boys. If children began formal education at the age of eight, or even 10 or 12, there would be very few who would not learn to read. The Scandinavian countries seem to understand this.

Later readers tend to be spacial, technical, artistic, creative thinkers who are severely penalised by an education system which has unrealistic expectations of very young children. So a great deal of human capital is being stunted and/or destroyed before it even gets a chance to show itself.

Since the system isn't going to change any time soon I would suggest home education.
"Capital" is whatever means of production is in short supply in some given time and place. Advances in computers and materials science over the past century have made fairly deep analytical thinking the bottleneck. We aren't going to run out of fuels (though we have already run out of safe places to put CO2, we will soon master wind and solar to where they, together with nuclear power, can replace coal.) We aren't about to run out of iron ore, or even "rare earths". Medicine and universal grade school education have ensured that there will be no shortage of general-purpose labor. We can manufacture stuff to high standards with very little labor and materials input. We will soon be able to get along without truck drivers.

High-end human capital is the bottleneck of today's world. A purely capitalistic system may well speed the introduction of new and better products and services, but purchasing power, in such a system, will skew ever more towards those who are born with good genes and good epigenetics into a culture that values the kind of education that amplifies such native gifts into massive wealth.

There is some limit out there to how skewed, be it technically fair or not, the distribution of purchasing power can get before the 90% decide they want a bigger slice of a smaller pie if that's what it comes down to.
It is a very interesting piece, but really what is it saying that is not already known. In a globalised economy products compete on price and features, the low skilled work in production that can be done in Asia more efficiency (less red and green tape) and cheaper. The result is these jobs are effectively disappearing or see failing wages in real terms.

To "hide" unemployment governments re-define unemployment 1 hour of paid or voluntary work per month and they also shift unemployed to disability pensions. Add to this the make work ever expanding public sector and here we are, in the Western debt crisis.

In a global market the brightest data manipulators be they marketing, finance or legal interpretation will be able to charge huge and ever growing wages.

The poor and under-educated have a casualised service sector, largely reliant on debt fueled over consumption to prop it up. There is only one real answer let wages fall to a market clearing wage, default on the debt and start again - whose got the guts for the 1980's style recession?