Astral Codex Ten

George

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George

Article

George is a recurring person in the Astral Codex Ten archive, appearing 9 times across 9 issues between March 23, 2021 and July 05, 2024. The archive places it in contexts such as “His brother George is a self-employed cab driver”; ""George goes to great pains not to be misunderstood""; “All block quotes are from Progress & Poverty”. It most often appears alongside San Francisco, United States, Britain.

Metadata

  • Category: People
  • Mention count: 9
  • Issue count: 9
  • First seen: March 23, 2021
  • Last seen: July 05, 2024

Appears In

Source Context

Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.

Book Review: Antifragile
March 23, 2021 · Original source
Taleb gives the parable of John and George. John is a banker. He works for a big bank. Every month, the bank pays him a salary of $3000. In a good month, he gets $3000. In a bad month, he gets $3000.
His brother George is a self-employed cab driver. He makes an average of $3000 a month, but it varies a lot. If there's a big convention in town, he may be very busy and make much more than $3000. If there's an economic downturn and people try to save on cab fare, he might make much less than $3000.
John fancies himself protected from volatility. But he is only protected from small volatilities. Add a big enough shock, and his bank goes under, and he makes nothing. George is exposed to small volatilities, but relatively protected from large ones. He can never have a day as bad as the day John gets fired.
Your Book Review: Progress And Poverty
April 16, 2021 · Original source
In 1879, a man asked "How come all this new economic development and industrialized technology hasn't eliminated poverty and oppression?" That man was Henry George, his answer came in the form of a book called Progress & Poverty, and this is a review of that book.
Although 2021 seems better than 1879 in absolute material terms, George's complaint still rings true: healthcare and higher education are increasingly unaffordable, inequality is as bad as it ever was, and The Rent Is Too Damn High. And even if all of these measures had improved as well, we still have to contend with a fundamental complaint: how can human civilization have piled up an amount of wealth best described as absolutely banana pants insane, and yetstill have poverty, oppression and cyclical recessions? Yes, greed, evil, and human nature will always be with us, but isn't it weird that we haven't eliminated these economic problems the same way we've eliminated Smallpox, Scurvy, and having to write your scathing polemics about Thomas Jefferson by candlelight with a goose feather? Giving the mic back to George, he closes the chapter with this haunting quote, first written 142 years ago: If there is less deep poverty in San Fran Francisco than in New York, is it not because San Francisco is yet behind new York in all that both cities are striving for? When San Francisco reaches the point where New York now is, who can doubt that there will also be ragged and barefooted children on her streets? I'll just leave this here: Number of Homeless Children in U.S. At All-Time High; California Among Worst States. I. Wages and Capital George insists sloppy terminology leads to sloppy thinking. Naturally, he spends an entire chapter beating words to death to correct this. The Meaning of the Terms Let's start with Wealth. The common usage, both then and now, is "anything with an exchange value." George doesn't like how this mixes dissimilar things. By George, what is wealth? Wealth is produced when Nature's bounty is touched by human labor resulting in a tangible product that is the object of human desire. Labor is required, but the amount and type doesn't matter - George offers the example of simply picking a berry off a bush as an act that transforms nature's gifts into human wealth. Note particularly that human desire is an important requirement of wealth; it doesn't matter how much work someone put into something, if it doesn't gratify human needs or desires in some way, it's not wealth. Speaking of human desire, let's talk about Value. Where does a thing's value come from? The prevailing theory of the day was the Labor Theory of Value which originated with Adam Smith and David Ricardo, which says that Labor is the source of value. The early formulations were a bit ambiguous, here's Smith in Wealth of Nations for instance: The value of any commodity ... is equal to the quantity of labor which it enables him to purchase or command. Labor, therefore, is the real measure of the exchangeable value of all commodities. So... is a thing's value how much labor it takes to make the thing, or how much labor someone's willing to exchange for the thing? Nowadays Labor Theory of Value is most commonly associated with Marx. Marx picks a lane and says the value of something is tied to the amount of "socially necessary labor" required to produce it. George goes the other way: It is never the amount of labor that has been exerted in bringing a thing into being that determines its value, but always the amount of labor that will be rendered in exchange for it. - Henry George, The Science of Political Economy, p. 253 In other words, "a thing's value is whatever someone is willing to pay for it." This is in line with the so-called marginal revolution (the movement, not the blog) and modern theories of value. Labor Labor is the exertion of human beings. It's possible to labor to no avail (try punching a concrete wall), but typically humans labor towards an end, such as gaining wealth. But whether or not we accomplish anything with our efforts, George calls them labor. Labor isn't just making things, by the way – it's also moving or exchanging them. Production Production is labor applied "to the production of wealth." You know, productively. This is all human exertion that isn't punching a concrete wall and rewards you for your efforts with something that fits the definition of wealth. Said wealth is the "product of labor." Wages whatever is received as the result or reward of exertion is "wages." No distinction here is made between blue-collar work and white-collar work – whether one is called "hourly pay" and the other is called "annual salary," George calls them both "wages." It doesn't matter whether you receive them from your boss, from customers, or from nature. If you do work and get something from it, you have received "wages." With those basics under our belt, let's circle back to Wealth: What are some examples of wealth? By George, Gold is wealth. Teddy bears are wealth. Tesla roadsters and candy canes and young adult vampire romance novels are wealth. The same goes for fish you've caught, deer you've hunted, and cool looking rocks you've picked up on your morning walk. The value of these things may differ, but as long as they're tangible, originate in nature, someone ever did a lick of work to make or acquire them, and a human being somewhere desires them for any reason, they're wealth. It gets a little clearer when we ask what isn't wealth. And by George, Money isn't wealth. Articles of gold are wealth because they're tangible things that have been dug up, crafted, and fulfill certain human desires. But paper currency, digital currencies, and other things that aren't inherently valuable but merely represent value are not wealth (outside of putting their physical articles in coin collections or making paper airplanes, and so forth). Now don't get the man wrong, these things are certainly valuable. They're just not wealth. They are certificates that represent claims on wealth. For any computer programmers in the audience, money is a pointer to wealth. Likewise Stocks and Bonds and other financial instruments are not wealth. These are also just claims on wealth. A creditor's title to Debt isn't wealth, either, it's just a claim on the debtor's (typically future) wealth. And, writing as he was not long after the Civil War, George points out that Slaves are not wealth either but, represent "merely the power of one class to appropriate the earnings of another class." Wealth, thus defined, is the terminal "ground truth" bits of the economy, and all the financial layers on top are fancy IOUs that just encode various claims on it. George offers a thought experiment to test if something is wealth: if you produce a pile of gold, fish, or Lego bricks, you've clearly increased the amount of wealth in the world. But if you produce a giant pile of IOUs that just records who owns what and who owes what to whom, it doesn't matter how many of them you pile up or how long the chains of ownership get, you still haven't increased the amount of real wealth in the world. Again, this isn't saying the IOUs aren't valuable, they are. But they're only valuable because they ultimately point to real wealth. If you magically transported everyone over to a hypothetical Earth 2, carrying over all of Earth 1's money and financial instruments but none of Earth 1's tangible wealth, the value of all those IOUs would instantly evaporate. Now what about digital goods? Leaving things like Bitcoin aside for the moment, let's consider the case of a digital image file: By George, this is wealth. Digital though it may be, it's physically encoded on a storage device somewhere, and is thus tangible (it's not a pure abstract concept flitting about in Platonic heaven) and has its origins in nature. Human exertion built the computer that encodes it, and clicking the button that saves it to disk or displays it on your screen is labor. Finally, it directly satisfies human desires (mine, at the very least). It's value may be negligible, but it's wealth. By contrast, the digital bit sitting in some database that says I own a particular eBook or mp3 is just a digital IOU – a claim on the wealth that are the physical bits on my local storage device or remote server that digitally encodes the files. The fact that digital files don't seem particularly physical, and that they can be trivially and endlessly copied, doesn't mean that Henry George, magically transported to today, wouldn't regard them as wealth. Okay, so is there anything else that's not wealth? By George, Bitcoin isn't wealth, in case you were wondering. It's just a (very fancy) financial instrument, a digital claim on wealth. And that goes for most crypto assets – a token on some blockchain that says I own a painting by Banksy is just another IOU, regardless of the technical sophistication of its distributed trustless ledger. What about intellectual property? Copyrights, patents, and trademarks are all different forms of Monopoly – the exclusive, government-granted legal right to do a particular thing (publish a certain book, manufacture a certain product, use a certain name in business, etc). The exclusive right to do or produce a thing, valuable as it may be, is not the thing itself. By George, Monopoly is not wealth. But there is something big that is wealth – the C-word. Capital. By George, Capital is "wealth devoted to procuring more wealth", and it's the next thing he insists everyone is hopelessly confused about. He quotes Adam Smith, agreeing with him thus far: That part of a man's stock which he expects to afford him revenue is called his capital. ...and also gives us a short etymology lesson on the origin of the term: The word capital, as philologists trace it, comes down to us from a time when wealth was estimated in cattle, and a man's income depended upon the number of head he could keep for their increase. ("Per capita" being the Latin for "by head") By George, all capital is wealth, but not all wealth is capital. George notes capital is often described as being "stored up labor", and endorses this view – but what it really means, is capital is stored up production. It's not literally the labor that's stored up but the wealth generated by it, set aside and then dedicated to the purpose of getting more wealth. George insists that it is the owner's intention that transforms wealth into capital. If you buy an old factory to throw parties in for your hipster friends, it's just wealth. But the minute you decide to put it to work to make something useful (or start charging your hipster friends a cover charge at the door), it becomes capital. George therefore further insists that a laborer's daily bread and the clothes on their back do not count as capital, because a person has to eat and wear clothes whether they work or not. The laborer's tools (and arguably their steel-toed work boots) can however be counted as capital, because their purpose is to assist the laborer in getting more wealth by working for wages, and the laborer wouldn't acquire, use, and maintain those things otherwise. George has more exclusions: We must exclude from the category of capital everything that may be included either as land or labor. Human exertion (labor) by itself can never be capital. The products of human labor become capital when they are stored up and set to the purpose of getting more wealth. To muddle this distinction defeats the point of having separate terms for those things at all, and prevents us from reasoning meaningfully about how they relate to one another. Labor is not capital, and neither is labor by itself wealth, it produces wealth – and if it ain't wealth, it ain't capital. And that brings us to land. Land, land, land. By George, land is not wealth. And it's definitely not capital. The unique specialness of land is George's entire schtick and the very core of his philosophy. The term land embraces, in short, all natural materials, forces, and opportunities That means that a field or a meadow is "land", as is a mountain. But so are the fish in the sea, the clouds in the sky, veins of gold in the earth's crust, and the oil deep under ground. These things aren't yet wealth – not until human beings both a) desire them and b) touch them with labor. So... land is not wealth. But... how come? I mean, look: land is tangible, it "comes from nature", humans are always productively applying their labor to it, and it certainly seems capable of gratifying human desires. George sees this reasoning as understandable, but insists it's the root mistake that leads other political economists astray – because for George, land just is nature itself. Come again? Land is the ultimate source of all wealth, but it's most useful to think of it as a generator, acompletely separate entity from the wealth that human labor and desire draws from it. Players of Magic: the Gathering and Settlers of Catan should already have a solid grasp of this distinction: In modern times, George would grant electromagnetic spectrum and orbital real estate for satellites the same status of "land" that already applies to farmland and terrestrial real estate. We don't even need to speculate about whether he'd attach this status to sunlight because he straight-up predicted solar power: Even the lack of rain which makes some parts of the globe useless to man, may, if invention ever succeeds in directly utilizing the power of the sun's rays, be found to be especially advantageous for certain parts of production. (That's from Protection or Free Trade, footnote 19) The important thing to grasp about land is that it comes before everything humans do or make, and is itself a thing no human can make. Okay, smarty-pants, what about the Netherlands? They've been making land for centuries! Well, land in the Georgist sense doesn't refer simply to "dry land", but also the sea bed, the oceans, and the skies above. The "new land" in the Netherlands counts as an improvement to land that already existed. The seabed was always there, but by filling it in so you can walk around on it, now it's more useful to us (George has a lot to say about improvements to land, which we'll get to later). Okay, what is land not? nothing that is freely supplied by nature can be properly classed as capital By George, land is not wealth. And since it's not wealth, it's not capital. Okay, we get it. Land is very special to Mr. George and we must never put it in the same category as wealth, labor, capital, wages, production, money, or anything else. Why exactly is this so damn important? Well, by George, if you treat land the same way you would a bar of pig iron, an hour of work, or a dollar bill, before you know it you'll get poverty paradoxically advancing alongside progress, inexplicable bouts of industrial depression, literal genocides and holocausts (he's dead serious about this), and The Rent Being Too Damn High. With terminology now firmly established, George moves on to the relationship between wages and capital. 3-for-1 special on Wages, Capital, and Labor I'm condensing three chapters here because they all deal with the same basic thing. The question George wants to answer is: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living? The conventional wisdom of George's time is that wages are governed by a fixed ratio between the number of laborers and the amount of capital devoted to their employment, because "the increase in the number of laborers tends naturally to follow and overtake any increase in capital." So it doesn't matter how much capital you throw at employing workers, it'll just attract even more workers splitting it up, so although wages might temporarily wiggle a bit in the long term they'll always settle back to a "natural" minimum. (As we'll see in the next section, this argument stems from Malthusianism). George spends some time methodically poking holes in the theory (it's predictions don't line up with the facts he observes), and then sets out to prove his replacement theory (emphases mine): wages, instead of being drawn from capital, are in reality drawn from the product of the labor for which they are paid. He pulls a G.K. Chesterton to make his point: During the time [the laborer] is earning the wages he is advancing capital to his employer, but at no time, unless wages are paid before work is done, is the employer advancing capital to him. He starts by identifying the source of confusion: Because wages are generally paid in money, and in many of the operations of production are paid before the product is fully completed, or can be utilized, it is inferred that wages are drawn from pre-existing capital I mean, the old theory seems sensible: the employer has capital and uses it to pay wages. But however you slice it, capital's investment gets paid back by production when it takes its cut, so does it even make a difference to talk about where wages are "drawn" from? Value goes out, value comes in, isn't it all a wash? By George, it isn't: in the old theory, because capital "must come first", it follows that "industry is limited by capital - that capital must be accumulated before labor is employed", which leads to a reductio ad absurdum – We are told that capital is stored-up or accumulated labor – "that part of wealth which is saved to assist future production." If we substitute for the word "capital" this definition of the word, the proposition carries its own refutation, for that labor cannot be employed until the results of labor are saved becomes too absurd for discussion. George anticipates the following rejoinder – Well, when we say 'labor is paid out of capital' we don't mean it as an absolute statement for all stages of human development (or else we have a chicken-and-the-egg problem and civilization could never have begun), we just mean it applies to, say, every civilization that's left the stone age. George will have none of it and spends three entire chapters relentlessly beating to death the idea that wages are drawn from capital instead of from production. He starts with the simple case where wages are paid in the form of direct, concrete wealth, then moves on to the more complex case where people are paid in money and other instruments. Laboring for wages: Imagine a fishing village where nobody cooperates – each person digs their own bait and catches their own fish. Then they discover labor specialization and realize they can catch more fish together if one specializes in digging and the other in catching. So the digger digs, the catcher catches, and they share the fish. The digger really contributes as much to the catch as the one who physically pulls the fish off the hook even though the digger never directly "caught" a fish, and the fish he gets for his work is directly paid out of his contribution to the total production. Later, our fisherfolk invent canoes, and one stays home making and repairing canoes. This increases the haul of the digger and catcher, and the canoe-er gets paid out of her contribution to the increased production. And so it goes as society continues to advance. The work the specialist puts in causes more fish to be caught, and that person's wages is drawn from the growing pile of fish. As George puts it: "Earning is making." George gives another example: If I take a piece of leather and work it up into a pair of shoes, the shoes are my wages – the reward of my exertion. Surely they are not drawn from capital – either my capital or any one else's capital – but are brought into existence by the labor of which they become the wages; and in obtaining this pair of shoes as the wages of my labor, capital is not even momentarily lessened one iota... As my labor goes on, value is steadily added, until, when my labor results in the finished shoes, I have my capital plus the difference in value between the material and the shoes. And another: If I hire a man to gather eggs, to pick berries, or to make shoes, paying him from the eggs, the berries, or the shoes that his labor secures, there can be no question that the source of the wages is the labor for which they are paid. George goes on to say it doesn't matter if you're paid in money or directly in wealth, because the money is a direct claim on the underlying wealth. It also doesn't matter if you get paid on commission. Imagine a whaling ship where each crewman gets paid a share out of whatever the ship catches. When the ship sails back into port with a hold full of whale oil and bone, the crew gets paid in money, the owner simultaneously adds to his capital oil and bone. The crew's money directly represents their share of the concrete wealth that is the oil and bone. The owner's capital hasn't decreased, and the workers drew their wages directly from the production. So let's get to the point, Mr. George – wages aren't drawn from capital but instead from production. Great, let's grant that – so what? George hammers away at this because thinking wages are drawn from capital leads to a false conclusion, namely that "labor cannot exert its productive power unless supplied by capital with maintenance." "Maintenance?" Well, workers need food and clothing and they get paid by their employers, so you could imagine capital as a limiting factor on labor. But by George, food and clothing isn't capital, it's just wealth, as we said before. And with regard to wages, the point is that the employer always gets "paid" first, because the second the laborer produces value, the employer's capital increases: As in the exchange of labor for wages the employer always gets the capital created by the labor before he pays out capital in the wages, at what point is his capital lessened even temporarily? Okay, but what if I'm just a terrible businessman and I pay somebody $500 an hour to smash Ming vases, then sell the fragments as aggregate to a construction crew for a few pennies a pound, all at a tremendous loss? Surely then the laborer's wages must be drawn from my capital, because there's not enough productive value generated by the labor to draw them from! George says okay, sure, but only because I'm an idiot and will soon be out of business: Yet, unless the new value created by the labor is less than the wages paid, which can be only an exceptional case, the capital which he had before in money he now has in goods – it has been changed in form, but not lessened. Fair enough, Mr. George, but what if I'm building some enormously expensive multi-decade project, like a dam or a nuclear power plant or a cathedral? The kind of thing we call a "capital-intensive" project? What do you have to say to that? George points out that as laborers labor, they progressively add value to whatever they're producing. Take the case of a shipwright building ships for an employer – even if the boss can't sell a half-finished ship, it still holds value (for one, it costs less to finish a half-finished ship then no ship at all). And with every stroke of the laborer's work, the employer who owns the shipyard gets an incremental increase in his stock of capital. It is not the last blow, any more than the first blow, that creates the value of the finished product – the creation of value is continuous, it immediately results from the exertion of labor. A pedant would point out that the "last hit" that finishes the product which makes it ready for market adds disproportionate value, but George's point is just to establish that value is continuously created, and doesn't magically come into being allat once right at the end. George further points out that if you look at things like agriculture you'll see the market directly acknowledging his theory: As a plowed field will bring more than an unplowed field, or a field that has been sown more than one merely plowed... It is tangible in the case of orchards and vineyards which, though not yet in bearing, bring prices proportionate to their age. George freely admits that capital can be required for certain kinds of work, but he disagrees with what its purpose is. It's not a pool that wages get paid out of. He goes on for another chapter on "The Maintenance of Laborers Not Drawn From Capital" but I think we can safely skip it and move on. TL:DR – George hammers to absolute death the idea that Laborers derive their own maintenance (food/shelter/clothing/etc) from their wages, with George insisting it is drawn from production and... you guessed it, not from capital. At least some of George's ideas will not seem so radical to modern readers (especially those already critical of capitalism or neoclassical economics), but it's important to understand that at the time almost everything he was saying was considered deeply radical and shocking. Capital was the fundamental driving force of the economy and labor was utterly dependent on it, and the Malthusian theory of overpopulation was the accepted explanation for why wages were low and workers were starving. Political Cartoon literally demonizing Henry George – Puck magazine Oct. 20, 1886 The Real Functions of Capital Okay, Mr. George. You've spent three whole chapters beating me over the head with what the functions of capital aren't. So what are the functions of capital? Capital "increases the power of labor to produce wealth." How? By enabling labor to apply itself more effectively (power tools go brrrr)
Inline links: absolutely banana pants insane, Number of Homeless Children in U.S. At All-Time High; California Among Worst States, Labor Theory of Value, marginal revolution, blog, https://substackcdn.com/image/fetch/$s_!szbX!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F02e3f9db-5fe4-4a1b-bd19-5a13bac84aa1_500x500.png, https://substackcdn.com/image/fetch/$s_!cDFG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F28ef979e-83da-4d1b-8d81-5f08fd6103a5_516x600.png, https://substackcdn.com/image/fetch/$s_!PVE6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F68f4f7f0-2016-4fe9-9996-879a3c92db74_516x600.png, Protection or Free Trade, https://substackcdn.com/image/fetch/$s_!aeD5!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F348d4d74-8c98-42e6-b5f7-7bd79b30a816_960x611.png
By George, this is wealth. Digital though it may be, it's physically encoded on a storage device somewhere, and is thus tangible (it's not a pure abstract concept flitting about in Platonic heaven) and has its origins in nature. Human exertion built the computer that encodes it, and clicking the button that saves it to disk or displays it on your screen is labor. Finally, it directly satisfies human desires (mine, at the very least). It's value may be negligible, but it's wealth. By contrast, the digital bit sitting in some database that says I own a particular eBook or mp3 is just a digital IOU – a claim on the wealth that are the physical bits on my local storage device or remote server that digitally encodes the files. The fact that digital files don't seem particularly physical, and that they can be trivially and endlessly copied, doesn't mean that Henry George, magically transported to today, wouldn't regard them as wealth. Okay, so is there anything else that's not wealth? By George, Bitcoin isn't wealth, in case you were wondering. It's just a (very fancy) financial instrument, a digital claim on wealth. And that goes for most crypto assets – a token on some blockchain that says I own a painting by Banksy is just another IOU, regardless of the technical sophistication of its distributed trustless ledger. What about intellectual property? Copyrights, patents, and trademarks are all different forms of Monopoly – the exclusive, government-granted legal right to do a particular thing (publish a certain book, manufacture a certain product, use a certain name in business, etc). The exclusive right to do or produce a thing, valuable as it may be, is not the thing itself. By George, Monopoly is not wealth. But there is something big that is wealth – the C-word. Capital. By George, Capital is "wealth devoted to procuring more wealth", and it's the next thing he insists everyone is hopelessly confused about. He quotes Adam Smith, agreeing with him thus far: That part of a man's stock which he expects to afford him revenue is called his capital. ...and also gives us a short etymology lesson on the origin of the term: The word capital, as philologists trace it, comes down to us from a time when wealth was estimated in cattle, and a man's income depended upon the number of head he could keep for their increase. ("Per capita" being the Latin for "by head") By George, all capital is wealth, but not all wealth is capital. George notes capital is often described as being "stored up labor", and endorses this view – but what it really means, is capital is stored up production. It's not literally the labor that's stored up but the wealth generated by it, set aside and then dedicated to the purpose of getting more wealth. George insists that it is the owner's intention that transforms wealth into capital. If you buy an old factory to throw parties in for your hipster friends, it's just wealth. But the minute you decide to put it to work to make something useful (or start charging your hipster friends a cover charge at the door), it becomes capital. George therefore further insists that a laborer's daily bread and the clothes on their back do not count as capital, because a person has to eat and wear clothes whether they work or not. The laborer's tools (and arguably their steel-toed work boots) can however be counted as capital, because their purpose is to assist the laborer in getting more wealth by working for wages, and the laborer wouldn't acquire, use, and maintain those things otherwise. George has more exclusions: We must exclude from the category of capital everything that may be included either as land or labor. Human exertion (labor) by itself can never be capital. The products of human labor become capital when they are stored up and set to the purpose of getting more wealth. To muddle this distinction defeats the point of having separate terms for those things at all, and prevents us from reasoning meaningfully about how they relate to one another. Labor is not capital, and neither is labor by itself wealth, it produces wealth – and if it ain't wealth, it ain't capital. And that brings us to land. Land, land, land. By George, land is not wealth. And it's definitely not capital. The unique specialness of land is George's entire schtick and the very core of his philosophy. The term land embraces, in short, all natural materials, forces, and opportunities That means that a field or a meadow is "land", as is a mountain. But so are the fish in the sea, the clouds in the sky, veins of gold in the earth's crust, and the oil deep under ground. These things aren't yet wealth – not until human beings both a) desire them and b) touch them with labor. So... land is not wealth. But... how come? I mean, look: land is tangible, it "comes from nature", humans are always productively applying their labor to it, and it certainly seems capable of gratifying human desires. George sees this reasoning as understandable, but insists it's the root mistake that leads other political economists astray – because for George, land just is nature itself. Come again? Land is the ultimate source of all wealth, but it's most useful to think of it as a generator, acompletely separate entity from the wealth that human labor and desire draws from it. Players of Magic: the Gathering and Settlers of Catan should already have a solid grasp of this distinction: In modern times, George would grant electromagnetic spectrum and orbital real estate for satellites the same status of "land" that already applies to farmland and terrestrial real estate. We don't even need to speculate about whether he'd attach this status to sunlight because he straight-up predicted solar power: Even the lack of rain which makes some parts of the globe useless to man, may, if invention ever succeeds in directly utilizing the power of the sun's rays, be found to be especially advantageous for certain parts of production. (That's from Protection or Free Trade, footnote 19) The important thing to grasp about land is that it comes before everything humans do or make, and is itself a thing no human can make. Okay, smarty-pants, what about the Netherlands? They've been making land for centuries! Well, land in the Georgist sense doesn't refer simply to "dry land", but also the sea bed, the oceans, and the skies above. The "new land" in the Netherlands counts as an improvement to land that already existed. The seabed was always there, but by filling it in so you can walk around on it, now it's more useful to us (George has a lot to say about improvements to land, which we'll get to later). Okay, what is land not? nothing that is freely supplied by nature can be properly classed as capital By George, land is not wealth. And since it's not wealth, it's not capital. Okay, we get it. Land is very special to Mr. George and we must never put it in the same category as wealth, labor, capital, wages, production, money, or anything else. Why exactly is this so damn important? Well, by George, if you treat land the same way you would a bar of pig iron, an hour of work, or a dollar bill, before you know it you'll get poverty paradoxically advancing alongside progress, inexplicable bouts of industrial depression, literal genocides and holocausts (he's dead serious about this), and The Rent Being Too Damn High. With terminology now firmly established, George moves on to the relationship between wages and capital. 3-for-1 special on Wages, Capital, and Labor I'm condensing three chapters here because they all deal with the same basic thing. The question George wants to answer is: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living? The conventional wisdom of George's time is that wages are governed by a fixed ratio between the number of laborers and the amount of capital devoted to their employment, because "the increase in the number of laborers tends naturally to follow and overtake any increase in capital." So it doesn't matter how much capital you throw at employing workers, it'll just attract even more workers splitting it up, so although wages might temporarily wiggle a bit in the long term they'll always settle back to a "natural" minimum. (As we'll see in the next section, this argument stems from Malthusianism). George spends some time methodically poking holes in the theory (it's predictions don't line up with the facts he observes), and then sets out to prove his replacement theory (emphases mine): wages, instead of being drawn from capital, are in reality drawn from the product of the labor for which they are paid. He pulls a G.K. Chesterton to make his point: During the time [the laborer] is earning the wages he is advancing capital to his employer, but at no time, unless wages are paid before work is done, is the employer advancing capital to him. He starts by identifying the source of confusion: Because wages are generally paid in money, and in many of the operations of production are paid before the product is fully completed, or can be utilized, it is inferred that wages are drawn from pre-existing capital I mean, the old theory seems sensible: the employer has capital and uses it to pay wages. But however you slice it, capital's investment gets paid back by production when it takes its cut, so does it even make a difference to talk about where wages are "drawn" from? Value goes out, value comes in, isn't it all a wash? By George, it isn't: in the old theory, because capital "must come first", it follows that "industry is limited by capital - that capital must be accumulated before labor is employed", which leads to a reductio ad absurdum – We are told that capital is stored-up or accumulated labor – "that part of wealth which is saved to assist future production." If we substitute for the word "capital" this definition of the word, the proposition carries its own refutation, for that labor cannot be employed until the results of labor are saved becomes too absurd for discussion. George anticipates the following rejoinder – Well, when we say 'labor is paid out of capital' we don't mean it as an absolute statement for all stages of human development (or else we have a chicken-and-the-egg problem and civilization could never have begun), we just mean it applies to, say, every civilization that's left the stone age. George will have none of it and spends three entire chapters relentlessly beating to death the idea that wages are drawn from capital instead of from production. He starts with the simple case where wages are paid in the form of direct, concrete wealth, then moves on to the more complex case where people are paid in money and other instruments. Laboring for wages: Imagine a fishing village where nobody cooperates – each person digs their own bait and catches their own fish. Then they discover labor specialization and realize they can catch more fish together if one specializes in digging and the other in catching. So the digger digs, the catcher catches, and they share the fish. The digger really contributes as much to the catch as the one who physically pulls the fish off the hook even though the digger never directly "caught" a fish, and the fish he gets for his work is directly paid out of his contribution to the total production. Later, our fisherfolk invent canoes, and one stays home making and repairing canoes. This increases the haul of the digger and catcher, and the canoe-er gets paid out of her contribution to the increased production. And so it goes as society continues to advance. The work the specialist puts in causes more fish to be caught, and that person's wages is drawn from the growing pile of fish. As George puts it: "Earning is making." George gives another example: If I take a piece of leather and work it up into a pair of shoes, the shoes are my wages – the reward of my exertion. Surely they are not drawn from capital – either my capital or any one else's capital – but are brought into existence by the labor of which they become the wages; and in obtaining this pair of shoes as the wages of my labor, capital is not even momentarily lessened one iota... As my labor goes on, value is steadily added, until, when my labor results in the finished shoes, I have my capital plus the difference in value between the material and the shoes. And another: If I hire a man to gather eggs, to pick berries, or to make shoes, paying him from the eggs, the berries, or the shoes that his labor secures, there can be no question that the source of the wages is the labor for which they are paid. George goes on to say it doesn't matter if you're paid in money or directly in wealth, because the money is a direct claim on the underlying wealth. It also doesn't matter if you get paid on commission. Imagine a whaling ship where each crewman gets paid a share out of whatever the ship catches. When the ship sails back into port with a hold full of whale oil and bone, the crew gets paid in money, the owner simultaneously adds to his capital oil and bone. The crew's money directly represents their share of the concrete wealth that is the oil and bone. The owner's capital hasn't decreased, and the workers drew their wages directly from the production. So let's get to the point, Mr. George – wages aren't drawn from capital but instead from production. Great, let's grant that – so what? George hammers away at this because thinking wages are drawn from capital leads to a false conclusion, namely that "labor cannot exert its productive power unless supplied by capital with maintenance." "Maintenance?" Well, workers need food and clothing and they get paid by their employers, so you could imagine capital as a limiting factor on labor. But by George, food and clothing isn't capital, it's just wealth, as we said before. And with regard to wages, the point is that the employer always gets "paid" first, because the second the laborer produces value, the employer's capital increases: As in the exchange of labor for wages the employer always gets the capital created by the labor before he pays out capital in the wages, at what point is his capital lessened even temporarily? Okay, but what if I'm just a terrible businessman and I pay somebody $500 an hour to smash Ming vases, then sell the fragments as aggregate to a construction crew for a few pennies a pound, all at a tremendous loss? Surely then the laborer's wages must be drawn from my capital, because there's not enough productive value generated by the labor to draw them from! George says okay, sure, but only because I'm an idiot and will soon be out of business: Yet, unless the new value created by the labor is less than the wages paid, which can be only an exceptional case, the capital which he had before in money he now has in goods – it has been changed in form, but not lessened. Fair enough, Mr. George, but what if I'm building some enormously expensive multi-decade project, like a dam or a nuclear power plant or a cathedral? The kind of thing we call a "capital-intensive" project? What do you have to say to that? George points out that as laborers labor, they progressively add value to whatever they're producing. Take the case of a shipwright building ships for an employer – even if the boss can't sell a half-finished ship, it still holds value (for one, it costs less to finish a half-finished ship then no ship at all). And with every stroke of the laborer's work, the employer who owns the shipyard gets an incremental increase in his stock of capital. It is not the last blow, any more than the first blow, that creates the value of the finished product – the creation of value is continuous, it immediately results from the exertion of labor. A pedant would point out that the "last hit" that finishes the product which makes it ready for market adds disproportionate value, but George's point is just to establish that value is continuously created, and doesn't magically come into being allat once right at the end. George further points out that if you look at things like agriculture you'll see the market directly acknowledging his theory: As a plowed field will bring more than an unplowed field, or a field that has been sown more than one merely plowed... It is tangible in the case of orchards and vineyards which, though not yet in bearing, bring prices proportionate to their age. George freely admits that capital can be required for certain kinds of work, but he disagrees with what its purpose is. It's not a pool that wages get paid out of. He goes on for another chapter on "The Maintenance of Laborers Not Drawn From Capital" but I think we can safely skip it and move on. TL:DR – George hammers to absolute death the idea that Laborers derive their own maintenance (food/shelter/clothing/etc) from their wages, with George insisting it is drawn from production and... you guessed it, not from capital. At least some of George's ideas will not seem so radical to modern readers (especially those already critical of capitalism or neoclassical economics), but it's important to understand that at the time almost everything he was saying was considered deeply radical and shocking. Capital was the fundamental driving force of the economy and labor was utterly dependent on it, and the Malthusian theory of overpopulation was the accepted explanation for why wages were low and workers were starving. Political Cartoon literally demonizing Henry George – Puck magazine Oct. 20, 1886 The Real Functions of Capital Okay, Mr. George. You've spent three whole chapters beating me over the head with what the functions of capital aren't. So what are the functions of capital? Capital "increases the power of labor to produce wealth." How? By enabling labor to apply itself more effectively (power tools go brrrr)
Inline links: https://substackcdn.com/image/fetch/$s_!cDFG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F28ef979e-83da-4d1b-8d81-5f08fd6103a5_516x600.png, https://substackcdn.com/image/fetch/$s_!PVE6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F68f4f7f0-2016-4fe9-9996-879a3c92db74_516x600.png, Protection or Free Trade, https://substackcdn.com/image/fetch/$s_!aeD5!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F348d4d74-8c98-42e6-b5f7-7bd79b30a816_960x611.png
Carhart-Harris On Serotonin
June 15, 2021 · Original source
George at CerebraLab has a new review of Nutt and Carhart-Harris's paper on serotonin receptors (I previously reviewed it here). Two points stood out that I had previously missed:
Inline links: new review, Nutt and Carhart-Harris's paper on serotonin receptors, here
George's take on Carhart-Harris & Nutt is that this is influenced by the balance of 5-HT1A vs. 5-HT2A receptors - two different kinds of serotonin receptor. 5-HT1A is (to vastly oversimplify) the main target of antidepressants. The more strongly it's stimulated, the more likely you are to resolve prediction error by adjusting your predictions - the equivalent of stepping into a freezing shower, but then acclimating so that it feels okay. Suppose you're depressed/anxious/upset because your boss keeps yelling at you. With enough 5-HT1A activation, you're better able to - on a neurological level - adjust your world-model to include a prediction that your boss will yell at you. Then when your boss does yell at you, there's less prediction error and less suffering. This is good insofar as you're suffering less, but bad insofar as you've adjusted to stop caring about a bad thing or thinking of it as something that needs solving - though it's more complicated than this, since suffering less can make you less depressed and being less depressed can put you in a more solution-oriented frame of mind.
5-HT2A receptors are (to vastly oversimplify) the main target of psychedelics. The more strongly it's stimulated, the more active your inference gets. George argues that this means psychedelics are more likely to get you to try to solve your problems. But is this really true? The average person on shrooms doesn't spend their trip contacting HR and reporting their abusive boss, they spend it staring at a flower marveling at how delicate the petals are or something. What problem is this solving? I think Carhart-Harris, Nutt, and maybe George think that this "active coping" isn't necessarily physical action per se, it's rejiggering your world model on a deeper level so that it's more creative and risky in generating strategies. It's a bias towards thinking of problems as solveable. This could potentially fit with the thing where people who do too much LSD become yogis or transhumanists or whatever; they're biased towards believing *all* problems are solveable, even the tough ones like suffering and mortality.
Does Georgism Work? Part 1: Is Land Really A Big Deal?
December 09, 2021 · Original source
[Lars Doucet won this year’s Book Review Contest with his review of Henry George’s Progress and Poverty. Since then, he’s been researching Georgism in more depth, and wants to follow up with what he’s learned. I’ll be posting three of his Georgism essays here this week, and you can read his other work at Fortress Of Doors]
Inline links: Book Review Contest, Progress and Poverty, Fortress Of Doors
For those of you wondering who this "Lars" guy is, I'm the Astral Codex Ten reader who reviewed Henry George's Progress & Poverty for the book review contest. Henry George is the founder of an economic philosophy known as Georgism which is principally concerned with the deprivations caused by unchecked rentiers. George is famous for promoting two specific policies, the Land Value Tax (LVT) and the Citizen's Dividend (what we would now call a Universal Basic Income).
Inline links: Progress & Poverty, Georgism
In real life you can't accurately assess land value separately from improvements, so even if LVT would work in theory, it doesn't work in practice Today we'll start with point 1, and subsequent articles posted in the next two days will address points 2 and 3. I'll probably write further articles on the subject, but I make no presumptions about whether I'll have worn out my welcome on Astral Codex Ten by then. If you haven't read the Book Review yet, I've posted a brief recap of the relevant concepts below. Otherwise, feel free to skip directly to the subsequent section. 0. A Brief Recap Georgism is a school of political economy that is really upset about, among other things, the Rent Being Too Damn High. It seeks to liberate labor and capital alike from those who gatekeep access to scarce "non-produced assets," such as land and natural resources, while still affirming the virtues of hard work and free enterprise. George uses the term "Land" to mean not just regular land, but everything that is external to human beings and the things they produce–nature itself, really. Georgism's chief insight is to move economic thinking from a two-factor model (Labor and Capital) to a three-factor model (Land, Labor, and Capital). It's chief (but not only) policy prescription is the Land Value Tax (LVT), which taxes real estate at as close to 100% of its "land rent" as possible (the amount of rent due to the land alone apart from "improvements" such as buildings). In actual practice, most Georgists seem to think 85% is a reasonable figure to target. Let's carefully unpack what those terms means. "Land value" refers to the full market value of a property, excluding all of its improvements, such as buildings. This is the portion of a property's value arising solely from its location and natural attributes (agricultural fertility, endowment of stuff like water, minerals, etc.). "Land rent" (AKA "ground rent") refers to the recurring rental income a property is capable of generating from the market because of its land value. It is Land Rent which Land Value Tax is intended to capture. You can think of it as a Location or Site Value Tax if that's more helpful. It's not a tax on the full market purchase price of a property, nor is it a fixed amount of tax per acre of land, but rather a tax proportional to the market value of the land alone (or better yet, the land rent). When assessed correctly, as LVT approaches 100% the market selling price of the land itself will approach zero. Don't let the "100%" confuse you, either. If a piece of land costs $10,000 to buy, and is leased for $500/year, then an LVT that captures 100% of the land rent is $500/year, which works out to a 5% annual tax of the land value. LVT should not be confused with a property tax. Property taxes consider land plus improvements (typically buildings). An LVT considers land value alone. Georgists assert that if we sufficiently tax land in this manner, we'll not only end the housing crisis but also fix a bunch of misaligned incentives that cause poverty to persist alongside economic progress, while raising a bunch of revenue that can lower or even eliminate other less efficient taxes, such as sales and income taxes. This is because virtually all economists agree that LVT has zero "deadweight loss"–a fancy word for a drag on the economy that makes certain activities no longer profitable. Other taxes with no deadweight loss include Pigouvian taxes on bad things, like congestion and pollution. But won't landlords just raise the rent to make up for the LVT, passing the burden of the tax on to the tenants? Georgists say no, because land is special in that it is scarce and nobody can make any more of it. Indeed, LVT is a rare form of taxation that actually boosts the economy, because it discourages rent-seeking and speculation. Some Georgists even go so far as to say that LVT can raise enough revenue to replace all other less efficient taxes, becoming the so-called "Single Tax," but this is not a universally held position among modern Georgists. To be clear, proponents of the "Single Tax" believe that LVT is sufficient for all public purposes and that no other taxes (such as income tax, capital taxes, and tariffs) are necessary for revenue generation, although they still might support carbon taxes or "sin taxes" on things they want to discourage. Georgism doesn't begin and end with the LVT, however, and the movement isn't solely concerned with real estate and tax revenue. Henry George was an early proponent of what we now call "Universal Basic Income," or as he called it, the "Citizen's Dividend" (funded by LVT, naturally). But even if you threw every penny of LVT revenue into the sea, the anti-sprawl effects of the policy are appealing enough by themselves to earn the endorsement of YIMBY's and urbanists like Strong Towns. If you take Georgism to its natural conclusions, you might start to question government-enforced monopolies over other kinds of "Land," such as electromagnetic spectrum, water and mineral rights, and orbital real estate for satellites, not to mention the deadweight loss created by intellectual property gatekeepers over, say, research papers. And if you have my day job as an analyst for the video games industry, one day you'll find yourself applying the observed 30-year history of housing crises in MMO's to virtual real estate sales in leading blockchain games. Some people come to Georgism because of their aversion to income and capital taxes, some want to use LVT to fund generous social programs, some are motivated by the beneficial environmental effects, and some just think the Rent is Too Damn High. No matter where you come from on the political compass, there's probably a way to mix up a club soda and Georgism that's right for you. 1. Is Land Really a Big Deal? Paul Krugman speaks for many mainstream economists when he admits that Georgist analysis is sound, but he insists that it's a moot point because land just isn't important anymore in the modern economy: Believe it or not, urban economics models actually do suggest that Georgist taxation would be the right approach at least to finance city growth. But I would just say: I don't think you can raise nearly enough money to run a modern welfare state by taxing land. It's just not a big enough thing. By George, if land just isn't a big deal, then LVT can't raise much money, the problems of speculative landownership are vastly overstated, and you can stop reading this article. The main tension between Georgists on the one hand, and Marxists and Neoclassicals on the other, is that the latter two significantly downplay land, centering the whole discussion instead on labor and capital. For Georgists, land is the key to understanding the whole economy. Krugman's main complaint is that LVT can't raise enough money, which is a response to the "Single Tax" movement in particular. In George's time, it was popular to advocate for a 100% Land Value Tax and the elimination of all other taxes. Keep in mind that in George's time, there was no federal income tax, and state and federal spending was much lower, so whether LVT could raise enough money wasn't nearly as controversial as it is today. But even if it turns out that a modern-day "Single Tax" isn't enough to cover the federal budget, Krugman misses the point. The purpose of LVT is not just to raise revenue, but to end speculation, rent-seeking, unaffordable housing, and wasteful, environmentally damaging sprawl. LVT is worth doing for those good effects alone. The revenue it generates doesn't need to fund literally every penny of government spending to still be a win, which is why Georgist economist Terrence Dwyer calls LVT "better than neutral." Liberal Krugman and conservative Milton Friedman both seem to agree that LVT has no deadweight loss, which means LVT, unlike income and capital taxes, doesn't create a drag on productivity. This means that if we can raise enough money from LVT, we can reduce at least some inefficient taxes, such as those on labor, while keeping government spending the same. Not only could this be popular politically, it would also boost the economy. Those are the claims Georgists make, at least. Let's see if they're true. Here are a few testable hypotheses that capture different aspects of land being a "really big deal": Most of the value of urban real estate is land
Inline links: the Book Review, political economy, Pigouvian, YIMBY's, Strong Towns, research papers, housing crises in MMO's, leading blockchain games, Paul Krugman, Milton Friedman, deadweight loss
Does Georgism Work, Part 3: Can Unimproved Land Value be Accurately Assessed Separately From Buildings?
December 11, 2021 · Original source
[Lars Doucet won this year’s Book Review Contest with his review of Henry George’s Progress and Poverty. Since then, he’s been researching Georgism in more depth, and wants to follow up with what he’s learned. I’ll be posting three of his Georgism essays here this week, and you can read his other work at Fortress Of Doors]
Inline links: Book Review Contest, Progress and Poverty, Fortress Of Doors
Ted Gwartney also gives online seminars. To prep for this article, I attended his 5-week course Assessing Land Values - Principles and Methods from the Henry George School of Social Science, which I'll reference throughout this piece.
Inline links: Assessing Land Values - Principles and Methods, Henry George School of Social Science
Henry George, for planting trees in whose shade he would never sit
Links For April
April 14, 2022 · Original source
4: Congratulations to last year’s book review contest winner Lars Doucet, who was interviewed by Jerusalem Demsas in a Vox article on Georgism (the article prefers the term “land value tax” and never mentions George by name, which is a surprising but I think defensible choice).
Inline links: interviewed by Jerusalem Demsas in a Vox article on Georgism
Book Review: The Gervais Principle
May 10, 2022 · Original source
The mediocre develop faster than either the talented or the untalented An alternative way of looking at these three laws is to note that defense mechanisms emerge to sustain addictions even when the developmental environment that originally nourished it vanishes. Defense mechanisms though, are more useful as a partial catalog of phenomenology than as a foundational idea. These then are the developmental psychology roots of the Gervais Principle. Recall that Cluelessness goes with overperformance. That overperformance is caused by arrested development around a strength, which has been hooked by an addictive environment of social rewards. Mediocrity is your best defense against addiction, and guarantor of further open-ended psychological development. And yes, for the alert among you who have spotted a connection, arrested development is the dark side of strengths in the sense of Positive Psychology. A strength in one situation is merely an entrenched piece of arrested development in another. In our model, the three development stages – Clueless, Losers and Sociopaths – correspond to different patterns of arrested development and different strength-addictions. That is, development involves progressing from one stage (eg school) to another stage (eg the real world). But if you’re too good at an early stage, you become accustomed to the reward you get from success. Suppose you loved school and did great at it. Then you get invited to participate in the real world, a noticeably non-school-like environment. You try it, and instead of getting praise/reward/validation all the time, you get those things rarely or not at all. If you can, maybe you go back to school (ie get a PhD), a strategy with problems of its own. But if you can’t real-world actually go back to school, instead you might remain permanently stuck at a psychological stage where everything feels like school, where you try to distort your perceptions until your world-model looks vaguely school-like, and where you use your school-based skills and coping mechanisms for everything. The particular example I just gave, about school, is Rao’s explanation for Dwight Schrute: Dwight, with his stern German upbringing, lacked the normal encouragement of early-childhood creative-performance instincts (we see several glimpses of this, including his attempt to read horrifying medieval cautionary tales to the kids during bring-your-child-to-work day, and his own description of his childhood, which left his brother actually developmentally disabled). He has therefore developed none of the addiction to childhood applause-seeking performance behaviors that have trapped Michael. Instead, Dwight found relief in the graded, performance-oriented worlds of school and varied medieval-guild-like worlds, such as farming, animal husbandry and karate. His attempts to understand the world of management, which is decidedly not a world of grades or guilds, are based entirely on peripheral guild-like elements. He is the only one excited about the Survivor-style successor-selection event Michael arranges (in the bus on the way over, he asks, “Will there be business parables?”). When he attempts manipulation, his mind naturally turns to hidden microphones, doctored documents and other elements of tradecraft learned from spy novels, and only rarely to psychology. He banks the occasional tactical victory, but cannot play or win the mind games required to beat the Sociopaths. In Dwight’s world, everything worth learning is teachable, and medals, certificates and formal membership in meritocratic institutions is evidence of success. Even where play behaviors are concerned, the Dwights of the world can more easily get lost in points-and-rules worlds. It is significant that Dwight has never seen/read Charlie and the Chocolate Factory (which is about creative-performance play), but is obsessed with gaming worlds and sci-fi/fantasy universes. Perhaps the clearest example of Dwight’s need for formal affiliation is his lame attempt at the insider stand-up comedy routine, The Aristocrats. To Dwight, everything is a formal contest, and there are always authority figures who provide legitimacy and rankings. He has no sense of humor (thanks to skipping early childhood), and has no idea how to actually evoke laughter, so he tries to ace the only formal membership test he can see, the ability to tell the Aristocrats joke. Michael, by contrast, can at least tell juvenile jokes, and Andy can manage some bad frat-boy humor. Rao argues that Michael Scott, the “boss” in the show, is stuck at an even lower level: Little children in normal environments win their first victories through creative performance: reciting nursery rhymes, drawing pictures, and demonstrating creative play behaviors. If they succeed too much, they get addicted to the typical adult reaction: Wow, aren’t you cute/clever? and, to a lesser extent, to admiration from younger siblings. In learning to thrive in this particular reward/penalty environment, little children rely mostly on responding to the emotional content of what they hear and see, since they do not understand much. With a few evolved defense mechanisms thrown in, to protect against adult realities that don’t conform to childhood environments, that’s exactly what it feels like to be Michael. When he hears somebody talking, all he hears is “blah blah blah good job, blah blah blah, how could you do this Michael?” in conjunction with facial expressions and body language. Michael’s head is a massive library of childlike mappings between situations, canned phrases and reactions. He is not completely responsible for his actions and utterances because he genuinely does not understand them. There is coherence in what Michael says though; he does not sound completely nonsensical because he reacts meaningfully to body language, facial expressions and emotional cues. “You talkin’ to me?” (borrowed from De Niro) is a belligerent line, and by pulling out that line when he feels threatened, and then displacing the tension with laughter, Michael is able to derail the conversation. His trademark joke, “That’s what she said!” is an extreme example. It makes no sense in most contexts where he trots it out; its only purpose is to dissolve tension and displace threats. Either laughing with Michael or throwing up your hands in frustration is a victory for him. The only effective response is to calmly ignore his disruptive actions, wait for the reaction to die down, and continue the conversation in dominant mode, like Cesar Milan with his dogs … Around Packer, his boorish friend, insulting and objectifying ways of talking about women gain approval, so he trots out borrowed, misogynistic man-talk. Withering under the collective glare of his politically correct employees, phrases like “respect women” gain smiles and halt frowns, so that’s what he offers. […] Here is why: delusions are closed logical schemes, where reality is mangled into the service of a fixed script through defense mechanisms, with the rest of the meaning thrown away. To manufacture original thought you have to look at/listen to reality in open ways for data. That is why Michael’s database is so full of movie lines. Movies are goldmines of canned situation-reactions that don’t require much present-reality data to retrieve. When kids quote adults or movies, they seem precocious, and gain approval. In an era where more kids are raised by TV than by parents, parroting movie lines comes more naturally than repeating bromides learned from parental figures or at churches and temples. Recall that social calendars force you through later stages whether or not you master previous ones. So what about later stages? Michael is not quite as enamored of medals and certificates as Dwight because (as a lousy student) he never got very good at earning them, and could therefore not get seriously addicted to them. Finally, Michael has poorly developed peer-affiliation drives. He wants to be the center of attention, not one among many equals in a huddle of peers. When Michael appears to be operating under a peer-affiliation drive (the sort that animates Andy), he is really casting child behaviors into a teen mould. He believes that specific people, rather than formal or informal groups, are cool or admirable (proxy parental figures, older siblings). If they are not cool or admirable, they must be made to view him as cool and admirable (younger siblings). I was struck by a line in an appendix, saying this is the same level that Nazi bureaucrats were at. Just for fun, let’s compare the rest of Rao’s profile of Michael with Arendt’s profile of Adolf Eichmann (all quotes taken from my Eichmann In Jerusalem review): Despite all the efforts of the prosecution, everybody could see that this man was not a “monster,” but it was difficult indeed not to suspect that he was a clown. And since this suspicion would have been fatal to the whole enterprise, and was also rather hard to sustain, in view of the sufferings he and his like had caused so many millions of people, his worst clowneries were hardly noticed. What could you do with a man who first declared, with great emphasis, that the one thing he had learned in an ill-spent life was that one should never take an oath (“Today no man, no judge could ever persuade me to make a sworn statement. I refuse it; I refuse it for moral reasons. Since my experience tells me that if one is loyal to his oath, one day he has to take the consequences, I have made up my mind once and for all that no judge in the world or other authority will ever be capable of making me swear an oath, to give sworn testimony. I won’t do it voluntarily and no one will be able to force me”), and then, after being told explicitly that if he wished to testify in his own defense he might “do so under oath or without an oath,” declared without further ado that he would prefer to testify under oath? And: The judges were right when they finally told the accused that all he had said was “empty talk” – except that they thought the emptiness was feigned, and that the accused wished to cover up other thoughts which, though hideous, were not empty. This supposition seems refuted by the striking consistency with which Eichmann, despite his rather bad memory, repeated word for word the same stock phrases and self-invented clichés (when he did succeed in constructing a sentence of his own, he repeated it until it became a cliché) each time he referred to an incident or event of importance to him. Whether writing his memoirs in Argentina or in Jerusalem, whether speaking to the police examiner or to the court, what he said was always the same, expressed in the same words. The longer one listened to him, the more obvious it became that his inability to speak was closely connected with an inability to think, namely, to think from the standpoint of somebody else. No communication was possible with him, not because he lied but because he was surrounded by the most reliable of all safeguards against the words and the presence of others, and hence against reality as such. And finally (this time in my voice): If [Arendt] has any thesis at all, it’s that Eichmann believed in something larger than himself. We usually encourage this sort of thing, but I think the prosocial version involves having a specific larger-than-yourself thing in mind. Eichmann (says Arendt) just liked larger-than-himself things in general, and the Nazi vision of eternal struggle for racial supremacy was the biggest thing he could find in the vicinity. We’ll later see that he had a strange respect for Zionists, and this was because they too believed in something larger than themselves. Eichmann’s infamous cliches were the cliches of pomp and circumstance and glory and high words, the ones which made him feel like he was engaged in a great enterprise whether or not there was anything behind them. The reason he admitted neither to “just following orders”, nor to a deep personal belief in anti-Semitism, was that his loyalty to Hitler came from neither. When Hitler said to kill all the Jews, he gladly complied; if Hitler had said to kill all the Christians, he would have done that too. Not because he was a drone following orders to save his skin, but because he believed. Not in any of the specifics of Nazi ideology. Not even in Hitler’s personal judgment. Just in whatever was going on at the time. IV. When he gets to the next section, on Losers, Rao mostly forgets the developmental psych. Now this is a book on status economics. Rao’s poetic description: Each of them – and they constitute 80% of humanity – is born the most beautiful baby in the world. Each is an above-average child; in fact the entire 80% is in the top 20% of human beings (it’s crowded up there). Each grows up knowing that he or she is deeply special in some way, and destined for a unique life that he or she is “meant” to live. In their troubled twenties, each seeks the one true love that they know is out there, waiting for them, and their real calling in life. Each time they fail at life or love, their friends console them: “You are a smart, funny, beautiful and incredibly talented person, and the love of your life and your true calling are out there somewhere. I just know that.” The friends are right of course: each marries the most beautiful man/woman in the world, discovers his/her calling, and becomes the proud parent of the most beautiful baby in the world. Eventually, each of them retires, earns a gold watch, and somebody makes a speech declaring him or her to be a Wonderful Human Being. You and I know them as Losers. Being a Loser means clinging to the delusion of being special, while also being fully accepted by your social group (indeed, your specialness only matters instrumentally and insofar as other people appreciate you for it). But these two imperatives are Scylla and Charybdis: insist too hard on actually being special and you’re a narcissist who everyone hates; try too cravenly to seek acceptance, and you’re acknowledging other people are better than you. Rao views Loserdom as a series of conspiracies to manage this paradox. The end solution looks something like "everyone is special in their own way”. Loser dynamics are largely driven by Lake-Wobegon-effect snow jobs, which obscure pervasive mediocrity. But unlike the delusions of the Clueless (false confidence of the Dunning-Kruger variety which we saw last time), which are maintained through the furious efforts and desperate denials on the part of the deluded individuals themselves, Loser delusions are maintained by groups. You scratch my delusion, I’ll scratch yours. I’ll call you a thoughtful critic if you agree to call me a fascinating blogger. And we’ll both convince ourselves that our lives are to be valued by these different measures. Loser above-averageness is generally not based on an outright falsehood. Unlike Michael’s pretensions to comic genius, which are strictly not true, Pam really is the best artist in the group. The delusion lies not in a false assessment of her artistic skills, but in the group choosing to evaluate her on the basis of art in the first place. In other words, Losers are too smart to fool themselves. They enter into social contracts which require them to fool each other […] At the life-script level, the game-playing social contract creates complete nominal illegibility. Each individual in a group is judged according to a custom life script that makes it impossible to compare two lives within the group. Pam’s life has a redemptive script based on the fact that she is the cutest one in the office, can paint well, and forms the “It” couple with Jim. Kevin’s is based on the fact that he is in a band. Creed’s uniqueness lies in his weirdness…Remember, you are unique, just like everybody else. A second, corollary paradox: Groucho Marx joked that he wouldn’t belong to any club that would accept him as a member. But then why do people ever associate in clubs? Suppose you joined a club that was clearly not good enough for you - maybe you’re a famous billionaire and they’re a bunch of losers who watch crappy TV in a basement once a week. Why would you be in this club? But suppose you tried to join a club that was clearly too good for you - you’re a poor person with no social skills, and you apply to the rich billionaires’ country club. Why would they ever accept you? This suggests that people won’t join clubs that are too much higher or lower status than they are. But why would they join clubs that are even slightly higher or lower status? Wouldn’t you expect nobody ever joins anything except in the vanishingly rare case where their status and the club’s status are exactly the same? Rao is trying to make the point that all associations require some level of status illegibility. If you knew status perfectly - if you went around with “Status: 6.8/10” tattooed on your forehead - then you could see a club all of whose members had statuses 6.2 - 6.5, and know that you could do better. So instead, the same social conspiracy that keeps people convinced they have useful talents, also keeps status illegible. This takes the form of everyone teasing each other, creating a constant churn of minor status increases and decrements which is too complicated for anyone to track properly. (Rao says that the single-highest and single-lowest status people in any group can sometimes be legible - creating an observable range for what status people in the group can be, ie “we’re for people between 6/10 and 7/10” - but the middle always has to be illegible, to allow the majority of people to preserve their polite fiction that they’re among the higher-status members of their group.) This section on status economics ends with a digression on jokes. Not as in knock-knock jokes. Jokes where one person makes fun of another, gaining status at their expense. These kinds of jokes are status economics transactions. According to Rao, the minimum viable Loser joke is three people: the joker, the victim, and an audience. The joker makes a joke. The victim has a chance to retort (eg “takes one to know one!”) and the audience decides how to mentally update everyone’s status. Rao uses examples from The Office, but I haven’t seen it, so I was thinking about an episode of Seinfeld: When George was stuffing himself with shrimp at a meeting, Reilly remarked, "Hey, George, the ocean called. They're running out of shrimp." Slow-witted George could not think of a comeback until later, while driving to the tennis club to meet Jerry. His comeback was: "Oh, yeah, Reilly? Well, the jerk store called, and they're running out of you." Jerry, Elaine, and Kramer did not think 'jerk store' was a good comeback mainly because "there are no jerk stores." Elaine suggests, "Your cranium called. It's got some space to rent." Jerry suggests, "The zoo called. You're due back by six." Kramer finally thinks George should just tell Reilly that he slept with his wife. After discovering that Reilly was let go from the Yankees and now works for Firestone, George flies to Akron, Ohio just to try the jerkstore line. When he says it, however, Reilly responds, "What's the difference? You're their all-time best seller." George, unprepared for this, ends up using Kramer's line. He's then told that Reilly's wife is in a coma. Rao asks: in what sense did Reilly successfully “score” on George? Suppose George had been a very stupid person, and hadn’t understood that Reilly’s comment was supposed to be teasing/hurtful; he would have been unaffected. Or suppose he had something totally outlandish (“Yes, but there are canyons on Mars”), then insisted that it was a brilliant comeback and let Reilly exhaust/embarrass himself trying to prove it wasn’t? In contrast, if there had been a third person there (let’s say a love interest who both George and Reilly were pursuing), this pointless narcissistic zero-stakes game would become relevant: the love interest gets to evaluate the two against each other, and award status to the victor. This isn’t always the wittier of the two. You can also imagine a world where George says “Excuse me, I have an eating disorder, I think it’s incredibly stigmatizing for you to bully me like this.” Then the third person gets to decide whether to treat this as Reilly making a hilarious joke and George being too thin-skinned to take it, or as Reilly saying something offensive and George bravely calling him out. Crucially, if she wants, she can let her decision hinge on whether she liked Reilly or George better to begin with, or whether one or the other would be a better ally in the future - so this is part status-transaction and part status-test. But in the actual Seinfield episode, there is no love interest. George and Reilly are trying to score points on each other, totally unaware that this is meaningless. For Rao, this is a sure sign of Cluelessness - anyone with social skills would realize no status could be gained or lost and the whole game is pointless. So Loser jokes are 3+ people, and Clueless jokes are 2 people. Continuing the pattern, a Sociopath joke must be for one person - the joker amusing himself, totally unconcerned whether anyone else appreciates it. V. Sociopaths aren’t necessarily evil. They’re just . . . unbeholden to anyone else. They might still follow the rules because it advantages them to do it, or because they have personally chosen to follow some moral code they happen to like. But they don’t crave approval from anyone, not even abstract concepts. If the Clueless come from arrested development, and Losers from normal development and its attendant status economics, Sociopaths are formed by a sort of dark enlightenment. They have a moment when they realize nothing is true and everything is permissible. Rao’s poetic side writes: Sociopathy is not about ripping off a specific mask from the face of social reality. It is about recognizing that there are no social realities. There are only masks. Social realities exist as a hierarchy of increasingly sophisticated and specialized fictions for those predisposed to believe that there is something special about the human condition, which sets our realities apart from the rest of the universe. There is, to the Sociopath, only one reality governing everything from quarks to galaxies. Humans have no special place within it. Any idea predicated on the special status of the human — such as justice, fairness, equality, talent — is raw material for a theater of mediated realities that can be created via subtraction of conflicting evidence, polishing and masking. Mask is an appropriate term for any social reality created through subtraction, because an appearance of human-like agency for non-human realities is what the inhabitants require. By humanizing the non-human universe, we make the human special. All that is required is to control people who believe in fairness, is to remove any evidence suggesting that the world might fundamentally not be a fair place, and mask it appropriately with a justice principle such as an afterlife calculus, or a retirement fantasy. […] When a layer of social reality is penetrated and turned into a means for manipulating the realities of others, it is automatically devalued. To create medals and ranking schemes for the benefit of the Clueless is to see them as mere baubles yourself. To turn status-seeking into a control mechanism is to devalue status. To devalue something is to judge any meaning it carries as inconsequential. In terms of our metaphor of masks of gods, the moment you rip off a mask and wear it yourself, whatever that mask represents becomes worth much less. So the Sociopath’s journey is fundamentally a nihilistic one. The climactic moment in this journey is the point where skill at manipulating social realities becomes unconscious. Suddenly, it becomes apparent that all social realities are based on fictional meanings created by denying some aspect of natural, undivided reality. Reality that does not revolve around the needs of humans. The mask-ripping process itself becomes revealed as an act within the last theater of social reality, the one within which at least manipulating social realities seems to be a meaningful process in some meta-sense. Game design with good and evil behaviors. Losing this illusion is a total-perspective-vortex moment for the Sociopath: he comes face-to-face with the oldest and most fearsome god of all: the absent God. In that moment, the Sociopath viscerally experiences the vast inner emptiness that results from the sudden dissolution of all social realities. There’s just a pile of masks with no face beneath. Just quarks and stuff. Both Losers and Clueless are trying to manipulate other people’s impressions of them. Sociopaths are trying to manipulate reality. Reality includes other people’s impressions - if your goal is to become President, in some sense you care what the electorate thinks of you. But it’s an instrumental goal. Sociopaths crave the Presidency (or whatever) and use other people’s good opinions as stepping-stones. Losers and Clueless crave the good opinions directly. Once you stop craving other people’s good opinions, you lose some mental blocks that would normally prevent you from coming up with manipulative strategies. Rao says the most basic Sociopath manuever is “heads I win, tails you lose” - coming up with some way of arranging systems so that they get the credit for good results while avoiding the blame for bad ones. A simple strategy is to come up with a plan and appoint a Clueless pawn as Director Of The Plan. If the plan goes well, it was always your idea and you hand-picked and mentored the person who carried it out. If the plan goes poorly, it was always the director’s idea, you maybe thought it had some promise but he clearly bungled the execution. But this is a weak 101-level version of the maneuver; the real thing involves a bunch of bureaucracies, committees, and total deniability. Rao theorizes that most of the middle layers of companies are giant and powerful machines built by Sociopaths to guide and redirect the flow of blame and credit. Is everyone else against this? Do they view it as duplicity and oppression? Rao says no. Sociopaths aren’t just CEOs. They’re priest-kings, creating meaning for everyone else. The Clueless demand a world of legible rules, legible rewards and punishment, and a legible Authority tracking everyone’s balance. Sociopaths, who create companies, religions, governments, and every other form of authority, help Clueless people live in the legible gamified rank-able worlds their minds crave. I’m less able to follow Rao’s explanation of “Loser spirituality” and how Sociopaths control it. My guess is something like: Losers “worship” positive emotions, belongingness, and “good vibes”, within carefully obfuscated conspiracies of mutual status-blindness. These aren’t really capable of dealing with the real world: a typical fiction is that “we’re all really talented and gave our all on this project”, but in fact the project might be failing. Sociopaths are outside those conspiracies and outside local status competitions, ie your CEO isn’t going to share banter over a glass of beer with you. So they are allowed to (carefully, emotionlessly) communicate/represent/convey reality to the status-maintenance conspiracies in a way where no particular member loses status by admitting reality first. Although in some vague sense the Sociopaths are oppressing and manipulating everyone else, this isn’t how it feels from the inside: both Clueless and Losers are grateful to the Sociopaths for taking the burden of confronting reality off their shoulders. If the Sociopath fails at this, and a Clueless or Loser has to confront reality unmediated, they’ll either have a very bad time but eventually bounce back, or become a Sociopath themselves. VI. So that’s The Gervais Principle. Is any of it true? I don’t find myself or the people I know best falling clearly into any of these archetypes. They’re useful to have around. I can see pieces of all of them. But none are a great match. I can see bits of myself in the Clueless archetype. I like legible systems. I’m the person who did really well on standardized tests, really badly at networking, and ended up in medical school because it was the highest you could go on test scores alone. I’ve occasionally suggested that all politics should be replaced with some kind of system for calculating how much utility every option has, then doing whichever one is best (bonus points if it’s on the blockchain). But I’m bad at listening to authority figures,and quit my last job to start my own company. Also, Clueless people are supposed to be bad at using language in original ways, and I’m a professional writer. Sociopaths are supposed to fiercely distrust collectivism and come up with their own, usually utilitarian-inspired morality, which I identify with. But I can’t manipulate my way out of a paper bag. Also, a few weeks ago I got in an argument with a clerk over the right amount of change, after double-checking it turned out I was wrong and the clerk was right, and even though this was in an airport and I will definitely never see that clerk again, I felt embarrassed about the interaction for hours, and still feel pretty bad about it. Doesn’t really feel very ubermensch-ish or transcended-the-need-for-other-people’s-good-opinion-y. I have a group of friends, and within that group of friends I’m acutely aware of the things I’m unusually good at vs. bad at, and I worry a lot about whether my strengths qualify me to be a member in good standing. My status within that group is illegible and I prefer that to the alternative. Does that make me a Loser? Who controls the microphone in my head? Whose approval do I crave? When I was younger, I remember pretty vividly that it would be whoever I had a crush on at the time. When I started blogging, it became my blog audience. But sometimes it gets hijacked by random store clerks. And I particularly remember being invited to an event with some big name tech people, fretting about whether they would like me, exerting some willpower to remind myself that I was valid with or without their approval, and then realizing afterwards that what I had actually done was fantasize about how if I wasn’t obviously craving their approval, they would be impressed by my independence and put-togetherness and respect me even more. So fine, I (and the few other people I know well enough to use as examples) don’t naturally fall into any of these categories. Whatever, Rao said (in one sentence) that everyone has multiple types. But then what’s the use of this categorization system? If I invent three random types of people: Green: introverted, long hair, likes the cold, complains too much
Inline links: defense mechanisms, The Aristocrats, Eichmann In Jerusalem, an episode, the real thing, that make me a Loser
Links For April 2024
April 04, 2024 · Original source
He’s now trying to get other people to replicate his results more formally. He says a replication attempt will take $300 worth of tech, specialist trainers who might cost up to several thousand dollars, and “3-4 hours of effort a day for two weeks”. If you’re interested, email him and he’ll try to set something up with you via Zoom calls. He says he prefers to work with groups of 2-3 subjects who can provide a couple of controls each. You can reach him at george3d6@gmail.com . If you do, email me and let me know you’re doing it, as a sort of pre-registration and so I can follow up with you later. I have very high priors on these kinds of claims being false, and I think you should only do this if you think it would be a fun experiment even if it didn’t work. Related:
22: George H (formerly of Cerebralab, now of Epistem.ink) claims that Increasing IQ Is Trivial and the scientific consensus that it’s impossible is just scientists being too cowardly to try interesting things (see also his counter to Gwern’s “Algernon” argument here). He says that he was able to increase his IQ 7-9 points (after controlling properly for learning effects) and that the first two people to try to replicate his method got 10 and 11 point increases). He’s being a little coy about what exactly the method is, because he doesn’t want too many people trying it half-assed and messing it up, but says it involves:
Inline links: Increasing IQ Is Trivial, here
Your Book Review: Don Juan
July 05, 2024 · Original source
But Byron? After all, it’s been a century Since George gave up his life to join the Greeks In breaking from their Turkish penitentiary Before the Brits could lap up their antiques. However great his corpus, what adventure re- Sung here can match its author’s final weeks? Yet still, I told myself that I’d review one, And so I guess we’ll settle for Don Juan.
Inline links: breaking, their antiques
But Byron makes the story, well, Byronic: Propelled on by the clip-clap of his cadence, It’s devilish, of course, but less demonic, In subject after subject making stray dents, With tangents far too long to be so chronic, That leave us, puzzled, questioning the way dents Like George’s grow to chasms while digressing— It does, I must admit, keep readers guessing.
Juan had lived through shipwrecks, loves, and warring, ‘Ere he arrived in London Town at last; Compared to that, the rest is rather boring, As Byron dwells at length upon his past: Society can’t help but leave him snoring, Yet he can’t help but satirize his caste; And so we get soirées that blend together, Though George’s wit still sears in milder weather.