Introducing The Hyperbolsters

A defining characteristic of quite a few public personalities is that they latch on to partial truths but then take to hyperbole or mental excessiveness to attain their public cachet and court some kind of recognition. You know the sort I mean; you listen to them and can recognise that some of what they say represents a grain of truth, but that the whole quintessence of their rhetoric just makes their overall persona seem somewhat counter-productive in the debate. I call them the 'hyperbolsters'. Examples of the hyperbolster personality would be people like Peter Hitchens, George Galloway, David Starkey. Richard Dawkins, most in the Green Party, a few of the ultra hard feminists and of course, our old friend Jeremy Corbyn.

Hyperbolsters identify smidgens of truth - like, for example, some immigration problems, the need for wealth redistribution, bad foreign policy, parts of the country in slight declension, and bad elements found in religion, to name just a few, but greatly exaggerate the reality of those truths or greatly exaggerate the extent to which their own personal commentary gets to the heart of the matter and accounts for the complexity of the issues.

Even someone like that EDL chap Tommy Robinson picked a crumb of truth - that this government is quite supine when it come to dealing with Islamic fundamentalism - and turned it into something headline-grabbing.

I'd place Nigel Farage in the hyperbolster category, although he’s hyperbolic-lite rather than the full flavour variety. Over the years he's generated lots of support by identifying two key issues (immigration and the EU) that the other parties had always addressed poorly, and he's used them as vehicles for persistently gathering political momentum, as well as picking up support from quite a few protest voters along the way. In Farage's case, of course, all this culminated in achieving the end result (Brexit) that he set out to achieve from about 1993 onwards. 

That is how hyperbolstering grows from individuals to party-size groups, and UKIP and the Green Party are the two most mainstream cases in point. Hyperboslters multiply into parties by adhering to the political art of gauging the societal landscape, by identifying which tenets of domestic life certain sub-sections of the electorate care about but feel isn't addressed well enough by other parties, and then by creating a representative party that can promise such policies, while remaining far enough outside the mainstream to ensure they are unlikely to ever have to deliver them.

While this post is about hyperbolsters in general, not Nigel Farage, I think history will show that Farage's legacy will go down as one of those rare cases when hyperbolstering survived the fringes and embedded itself into the mainstream. As for the majority of hyperbolsters out there, if you happen to be a fan, don't pin too much hope on them.

The Philosophical Muser Vlog - Why We Should Carry On Rewarding Failure

What's The Biggest Factor In Your Success? I'll Give You A Clue: It's Not Your Sex, Age, Intelligence, Height, Good Looks, Family Background, Education, Skin Colour Or Even Your Hard Work!

Apart from as a token term, there isn't really any such thing as 'luck' in the world. Of course we ascribe fortune to events in retrospect: "It was fortunate that there was a parking space when Jack had only 5 minutes to spare before a job interview" or "Lucky there happened to be a doctor in the pub when Hilda became ill", but that's more aptly described as circumstances going our way. Luck and fortune are merely synonyms for a world in which chance occurs due to incomplete knowledge.

To the greatest extent we make our own luck in the world, but if there's one thing that could best be determined as a fortune indicator it is one's place of birth in the world. Whatever we want to call it - chance, fortune or luck - the most significant fact about you that underpins the probability of how your life will turn out is probably your place of birth.

That is to say, people have all sorts of ways of determining their successes and failures in life, plus lots of things beyond their control. But the biggest determiner that most profoundly affects humans' ability and opportunity to determine their successes and failures in life is their country of birth, because one's country of birth plays such a huge factor in facilitating these things.

That's not to deny that all sorts of human qualities are important, nor that our education, family background and hard work are key ingredients. One can't even deny that having many of the traits mentioned in the title are advantageous. But where you're born in the world is the primary determiner that determines to what extent all the aforementioned qualities and traits get a chance to play out into your success.

Whether you're born in, say, Bolton or Cambridge, there are not many barriers to fulfilling your potential compared to, say, whether you're born in England or North Korea (or Pakistan, or Somalia, or Burma). The determination gulf is much wider cross-nationally.

It's About Time We Talked About Fracking

After declaring that the government she leads will always be driven by "the interests of the many ordinary families for whom life is harder than many people in politics realise", Prime Minister Theresa May wants to ensure that families affected by fracking get a share of any money earned.

In effect it's a partial market solution to a problem of ownership of gas, ownership of land, and allocation of resources and funds - but it's not a solution that solves the problem that anti-frackers have, who won't settle for what they consider to be meagre gestures of financial recompense. It is that problem I will address here.

As everyone in this country knows very well, fracking is quite a divisive topic, with those opposed to it unlikely to change their minds as opposition to it is bound up in their group identity.

For me, with no group identity, when it comes to fracking I don’t actually have a dog in this fight – I think it’s a little too early to tell. As always I come to the proposition with an open enough mind to see how it plays out and whether the net benefits outweigh the net costs.

Because yes of course there are costs and downsides to fracking, but obviously there are potential benefits too - not least the fact that there is approximately 1300 trillion cubit feet of shale gas on our land - which is more than 500 years' worth of gas for the UK (not that we'll need that much).

The general feeling in the green camp tends to be one of alarmism: swallowing scare stories and off-the-peg media junk through the fear of any kind of tearing of the sacred holy veil of Gaia.

A better approach would be to say, if it turns out that the benefits outweigh the costs, then great, I’ll support it. If the opposite, then I’ll be first to speak out against it. But rather than foolishly swallowing something whole and trying to digest it slowly, it’s much better to nibble away at it and see how the empirical process plays out.

A few objections are levelled at fracking - that it is an environmentally unfriendly method of sourcing, and that is can cause little earthquakes.

There is no such thing as being an unfriendly method of sourcing energy, just as there is no such thing as a single price of a banana. The quality of being unfriendly is a relative term.

Fracking may turn out to be unfriendly compared to solar energy, but quite friendly compared to coal or oil. Besides, whether it's environmentally 'friendly' or not is only a small part of the picture, because the bigger issue is to do with utility, practicality and saleability.

As for the issue of fracking possibly causing little earthquakes - so what? This may possibly be an argument against fracking, but it's not obvious that it is, because it may not be.

In fact, given that shattering earthquakes that cause damage on a large scale have hypocenters far far deeper than the depths reached by drilling and then pumping water underground, it may actually be the case that those small dissipations of energy, in causing a few little earthquakes, reduce the number of large scale ones. 

Our progress towards using more renewables ought to be dependent on the consumers, and on whether it is beneficial to do so. Solar seems like it has much more of a future than wind, for example - in fact, I feel quite certain that in half a century henceforward the people of that time will be looking back at us and wondering what the heck we thought all the fuss was about.

Shale providers, like solar and oil providers, earn their living by how much the consumers feel the energy is worth at meeting their demand for warm houses, cooked food, and so on.

If there is a large social payoff to fracking for consumers - as measured, as usual, by what consumers are willing to pay - but nobody is fracking to meet this demand, other suppliers in search of a business venture will start solving the missing shale gas problem, rewarded by the payoffs of the revenue per cubic foot that is aligned with the benefit to customers. That is precisely how society should decide which energy sources should be predominant.

Life's gradual progression is very rarely a planned one (although to the naked eye it can easily give the appearance of being more 'designed' than it actually is) - it is a cumulative process that comes as a result of millions of ideas and exchanges going on in a trial and error process.

Discussions about things like fracking should never be alarmist where folk only fear the losses of some elements of the equation; it should be with the view that whichever provides the net benefit to society is the one that should be considered with most favour.

Geologists tell us that there are large amounts of gas locked into shales below the nation's floor, and it is common knowledge that less than 10% of our land is urbanised, so there is plenty of scope to install drilling rigs around the country if the benefits outweigh the costs.

Of course, this issue isn't helped by the fact that in the UK (unlike in America) pretty much all onshore natural resources like oil and gas are owned by the State, which means the Ricardian principle of land rent site being equal to the economic advantage obtained by it for its most productive use is likely to be sub-optimal.

What is needed, ideally, are proper allocations, whereby people whose land is shale gas rich can benefit from it (if they choose) - subject to consideration of the externalities (neighbours, locals) - as can all consumers who can buy cheaper gas. If it's done intelligently, then the costs of drilling for shale gas will be concentrated in areas of investors/providers, with benefits being widely distributed to consumers.

Generally speaking, though, I'm afraid there is too much lazy thinking when it comes to many of these 'controversial' topics - as there are a vast number of people who tendentiously operate on a kind autopilot logic of "If x involves some costs then we must not entertain x" - when, of course, in the real world, everything has some costs, because everything is a trade off - if you get less or more of something you get more or less of something else. If we discontinued everything that has costs we'd discontinue everything full stop

So fracking may be a bad idea, but it may be the case that people getting inexpensive energy, pensioners being affordably warm in winter, and low earners being able to cook without being petrified of opening the gas bill are worth what may be turn out to be tiny fusses over very little.

If we don't capitalise on the potential for more efficient energy provisions, we are effectively saying we don't prefer cheaper energy, which is exactly the same as saying we prefer more expensive energy, which is the same as admitting that we don't want to make life better for many people.

Moreover, if we don't capitalise on the ability to drill for gas one would presume it means we'll use more coal and oil for the same energy requirements, which one would have thought is contrary to the greens' aims as it will be worse for the environment (particularly as extraction costs for shale gas will surely be a lot less than in the oil industry).

The Government Is Electricity When It Comes To The Bathtub Of Banking

Worried about a potential nose-diving economy that is very unlikely to materialise (and long-term almost certainly won't), the quasi-governmental Bank of England’s basic rate is being lowered from 0.5% to 0.25%, with the actual UK government — driven here by Theresa May and Philip Hammond - favouring a scheme to force the banks to pass on lower interest rates to businesses in the hope of injecting new lifeblood in the small business sector and a borrowing system that favours them.

This is a big mistake because it treats both risk factors and interest rates as though they are mere numbers without important supply and signals attached to them. Generally, if savings are in scarce supply but there is a high demand for borrowing, then interest rates will rise.

This will reduce demand for borrowing (because with compound interest borrowing is expensive) but it will also increase the incentive for savers (because people who save will get a better return on their money).

As more money is saved, more capital becomes available to be loaned out, and the price (that is, the interest rate) will fall, making borrowing more enticing, and increasing demand for loans. Just like with any consumable good - cars, garden plants, laptops and oranges, the price of borrowing fluctuates in order that as closely as possible it matches savings supply with the credit demand.

Consequently, interest rates provide signals regarding the extent to which people are willing to forgo something in the present for something more desired in the future. So interest is basically a tax on borrowing, and factoring risk is an evaluation of the probability of a borrower defaulting on a loan.

There are two principal problems with the government's approach to this; one to do with artificially adjusted risk and the other to do with artificially adjusted prices of borrowing.

To take the second one first, when interest rates are lowered a lot of keen borrowers come along to capitalise. To satisfy this demand the Bank of England must increase the money supply, which drives up prices.

As people are borrowing to consume goods, not to store money, they will need more money, which the Bank of England must respond to with a further increase in the money supply, which further drives up prices, and round and round we go.

And when we have artificially adjusted risk, businesses are started up without the requisite risks of their failure factored in to the terms of the loan. A scheme that artificially favours small businesses avoids the mild deflation that brings about the healthy bankruptcy of insolvent businesses and the roadblock to future insolvent ones starting up in the first place.

Suppose a magic genie appeared to you and told you tonight's winning lottery numbers. One thing you wouldn't do is announce those numbers to everyone you know. Knowing they are worth a fortune to you, you'd select those numbers on a ticket, pay your £1 and become a millionaire at the weekend.  If you can make a logical connection - this makes matters clear on why governments pressuring banks to loan to small businesses is a bad idea.  

This harks back to the crazy days of Ed Miliband who very much wanted to establish a network of regional banks to lend to local businesses, based on supposed findings from the Small Business Taskforce that innovation is being inhibited due to the lack of bank-lending.  Because of the drop in bank-lending, his party, along with the Liberal Democrats, were keen to drive banks into a greater state of lending. This was a terrible idea then, and it still is now.

If a prospective business has the qualities to make it lucrative for investors then a bank will miss an opportunity to profit by not lending to the business. The obvious corollary is; if after an assessment a bank is not wilfully invested in a prospective business, it must believe that the project lacks the qualities to make it a lucrative, profit-making venture.  Hence, when politicians pressurise banks to lend to businesses they are often forcing them to invest in projects they believe to have a low chance of engendering profit. 

If you take the logic to its natural level, by proposing legislation that imposes compulsory lending from banks the government forgoes a great opportunity to make a profit by not capitalising on these opportunities themselves, rather like how a man who knows next Saturday’s wining lottery numbers forgoes a greater profit by telling everyone the numbers ahead of the draw. 

Instead of passing any such legislation or temporary duress, the government could hire people to invest in all these innovative schemes and channel the profits into good and profitable services for the benefit of the taxpayer.  That it doesn't, suggests that the government doesn't think these prospective businesses are worth investing in after all - which makes it crazy that they should force banks to do so.

This also makes it clear why not only is government interference in the markets often harmful - it also demonstrates why governments loaning to businesses that can't get a loans from the bank is unwise. What ought to be obvious is that if a bank isn't lending to a business it must think it has better ventures in which to invest. Alas, this seems not be obvious to a number of our politicians. 

Take Hopeful Harry who has been refused a bank loan for his prospective retail business.  What are the chances that Harry knows better than the bank about how to invest their money?  Very small; after all, as far as Harry is concerned the only perceived use of the money is to have it invested in his business. But as far as the bank is concerned, it has knowledge of all the alternatives that Harry doesn't know about, making the chances of Harry's business being the best prospective investment vanishingly small. 

If Harry has approached numerous potential investors and been turned down, it would be economic madness for the government to invest in Harry's business on the back of this.  In loaning to Harry - and businesses like his - the government has harmed society because it has invested money in ventures that are less conducive to success than the alternatives.

An economy in which investors are risking their own money has greater invectives for profit and economic mobility than when a government is risking the taxpayers' money.  Green tax breaks and eco-subsidies are not all they've cracked up to be either, as they interfere in the free market by gearing entrepreneurs towards ventures that factor in government subsidy rather than assenting completely to the mechanism of matching supply to demand.

When politicians tell you that the financial crisis occurred because banks were left to their own devices, they are speaking the opposite of the truth - the incentive to gamble is usually (and was in this case) greatest when excessive risks are not met with collapse but with government bail outs.

I'm not saying that when the public's money is at risk the State shouldn't have safety mechanisms in place - but the financial crisis largely came about because there were too few incentives to stop banks taking risks. Prior to the financial crisis banks were taking so much risk precisely because they were bootstrapped by government subsidies to the tune of hundreds of billions.

When the likes of Cameron, Osborne, Cable and Miliband complained about how irresponsible and greedy the bankers were - they were without perhaps knowing it also complaining about how much the bankers responded to government subsidies.  That is like a man who has paid a tattooist to tattoo him complaining that the tattooist has ruined his unblemished skin by indelibly marking it with the design. 

A healthy bank will protect everyday citizens' savings that are tied up in their accounts and offer customers security against the loss of their savings. Consequently, depositors' concern about the security of their money and their discernment in choosing with whom to deposit and invest is a necessary part of a well functioning competitive banking system.

It’s the removal of this that contributes to the banks’ propensity for excessive risk – for if customers deposited their money based on knowledge of a bank’s history of sound and consistent investment, then all the better for them and for the banking market.

And an important part of this security of borrowing and investment is bound up in the fact that as near as possible banks must allow interest rates to find their level by the mechanisms of supply and demand, and they must only loan to businesses that they've assessed as being highly probably solvent in the next few years and (hopefully) decades henceforward.

The Answer To The So-Called 'Inequality' Problem Is Not More Equality

Today the Wall Street Journal has pointed us to lots of research to show why there is no empirical evidence for Thomas Piketty’s highly flawed inequality theory being correct. Naturally this blog's author doesn't find that in the least bit surprising - I wrote my own critique of Piketty's ideas in 2014, which also came to those same conclusions.

Often people's intentions are noble and their goals are good, but their ideas on how to achieve those things are defected with fantasy. With Piketty's notions of inequality, however, the intentions and goals aren't even that worthwhile either, because we don't much need more equality - what we actually need is more freedom.

One of the most significant cultural memes in our modern society is the egalitarian one that obsesses about making an unequal world artificially more equal. What we should strive to improve more than anything is not equality, it is freedom.

Those who place a higher premium on equality over freedom miss one of the most vital things about being human - that as well as our similarities in terms of human qualities, it is our differences that engender the variety of things that make us prosper. Consequently, if you artificially impede some freedoms for the purposes of greater equality you impede the diversity that drives people's striving for progress.

For it is precisely those different tastes and abilities that give exhibition to the choices we make in creating such a diverse society and a diverse economy. It is because of these vast differences that people co-operate in trade, and it is because of this collective co-operation that people are incentivised to strive for innovation.

Consequently, then, what people striving for greater income equality ought to be striving for is greater opportunity, because it is opportunity that engenders value, and it is value that increases absolute well-being. Life is about ideas, and putting those ideas into practice. This involves a continual trial and error process best enjoyed when freedom enables it.

One of the most oppressive things that can be demanded in society is when people try to make equal, things that are better off unequal. We are equal only to the extent that we are all uniquely different and better for it. The celebration of and striving for optimal diversity is the antidote against the medicine of fabricated equality.

And I say 'optimal diversity' precisely because although we can have too little equality, such as in cases where opportunity is needlessly limited for some groups, we can also have too much diversity, such as in cases where a departure from a desired uniformity is socially and individually damaging (see here and here for more on this).

Let's Face It, Human Intelligence Is Boltzmannian, Not Gaussian

In terms of distribution of intelligence across the nation, rather than the assumed normal distribution - a Gaussian bell curve of intelligence (as above) - I think the distribution of people in the UK would more closely resemble the Boltzmann distribution (see below), where on the horizontal axis 0.1 is the lowest level of intelligence and 7 is a genius.

This is quite intriguing, given that as a rule, approximately 68% of measured values (be they height, weight, blood pressure, and so on) fall within one standard deviation of the mean; approximately 95% of the values fall within two standard deviations from the mean; and a whopping 99.7% of all values fall within three standard deviations from the mean (also illustrated in the image above).

On the other hand, as you can see from the image below, the Boltzmann distribution is biased, and decays exponentially. The analogy to intelligence here being that if the y axis on the graph is number of particles, and the x axis is amount of energy, then no particles will have zero energy, some will have very low energy, many will have medium energy, and as we get to the lower part of the curve, we see only a relatively few people have super high energy. If you replace particles with people and energy with applied intelligence you’ll find it’s a pretty good analogy.  

If we take human intelligence, or perhaps more accurately the extent to which humans have ever applied their potential capacity, we find that it seems not to be like a bell curve at all - rather it's heavily skewed towards the low end, like the Boltzmann distribution. 

So, for example, on a scale of 1-100, where 1 is very low on intelligence, and 100 are the most brilliant minds, if you take the entire population of the UK, my experience indicates to me that the vast majority of people are in the category below 50, with about half being under 25. In fact, I'd guess that broken into percentages it would be roughly as follows, where percentage is percentage of the population:

1 - 25 (50%)

26 - 50 (30%)

51 - 75 (15%)

76 - 100 (5%)

(It's possible these figures might need slightly adjusting, but not by much).

Anyway, the result is definitely not a bell curve. Compare that to say, height or weight - these are bell curves because most of the adult population fall between 4ft 9 and 6ft 7, and 5 stone and 21 stone, which means the bell curve peaks at the average of those ranges and slopes downwards either side with a few rare cases outside of that range. Human intelligence appears not to follow the same patterns as weight and height, even though I think the average member of the public, strewn with democratic and egalitarian aspirations, would like to think differently.

But what makes it an even more interesting phenomenon is that in all likelihood random walk is implicated in many of the exponentially decaying statistics one sees - and even though the intelligence curve isn't symmetrical, it is still possible that a random walk model can account for some of the underlying statistical mechanics.

The general form of random walk arises because parameters and measurements are affected by multiple causes. Take nightclubbing as an example. Suppose in Norwich city centre in 2016 there is a sample group that regularly parties down Prince of Wales Road and averages to the value of n.

If we take a month, say July - each member of that group may go out partying in July. Once the causes that affect people's decision to go out are factored in, we can see many instances where n changes. If a person decides to go out partying, that amounts to a kind of step to the right; that is, it affects n by +1.

However. if a person doesn't go partying in July, that counts as a step to the left - meaning n-1. So assuming all the causes are independent, what we have is something that resembles a random walk-like scenario, hence, partying attendance statistics, when taken over the year, will start to follow a "bell" pattern.

However that won't necessarily be symmetrical, because there may also be exogenous influences at work. For example during certain times of the year, after Christmas, and the subsequent two or three months there will be a bias toward the lower end. Conversely, when it's a hot summer weekend, a bank holiday, or there's a major event in the city, the opposite will happen.

To understand why intelligence is Boltzmannian, not Gaussian, you have to understand that "biased" random walks are highly likely to return non-symmetrical curves. The Boltzmann distribution, which measures frequency distributions of particles over various possible states, arises in atmospheric density with altitude results of random walking molecular motions where there is imposed a maximum energy constraint on the atmosphere (this is due to energy conservation).

If the walk is moving into a space where the density of points in the space varies from place to place one again gets non-symmetry.  So given that human mental resources are limited, it could well be that the intelligence curve is a Boltzmann curve on the leeward side because human mental resources are subject to conservation laws, as well as being 'biased' towards the lower end of the intelligence spectrum - something we don't see in height or weight, which returns the bell curve pattern with the average at the peak of the curve. 

 



The Three Factions Of The Labour Party & The Sword Of Damocles That Hangs Over Them

The Labour Party is in the biggest mess in its history, which is particularly noteworthy given that we are only two decades on from arguably its political zenith with Tony Blair's landslide election victory in 1997.

Currently John McDonnell is accusing leadership challenger Owen Smith of backing a Labour split, when in actuality it is the persistence and tenacity of Corbyn as leader that would most likely cause a split.

Either way, a split would be absolutely disastrous for the Labour Party, because in terms of obtaining a majority in General Elections it would hand the initiative to the Tories for the foreseeable future.

The breakdown of the party's problems is underpinned by the fact that Labour consists of broadly three groups. They are:

Group 1) The Parliamentary party itself

Group 2) The party members and union members

Group 3) The rest of the Labour voting population

The first group consists of the 230 Labour MPs, most of whose primary concern is having a job and receiving their salary for being an MP, and most of whom are not Corbynites. Most Labour MPs hover around the centre-left. 

The second group are mostly Corbynites, and really do want Corbyn's brand of socialism brought into this country. They are campaigning hard and being very vocal in their unbending support for Corbyn. Naturally, being in their hundreds of thousands, group two is considerably larger than group one.

The third group, and by far the largest number of people out of the three groups, consists of everyone else that votes Labour up and down the country. In the past couple of decades the majority of this group seem to be more aligned with group 1 than group 2 - that is, they are fairly socially conservative, and are more likely to want to embrace a freer market socialism than Corbynites.

All that is quite commonly known - the members (growing in their thousands) are all-out for Corbyn, and as they have the ultimate vote, look likely to keep voting him in until the next election. MPs, on the other hand, feel certain (with justification, I'd suggest) that under Corbyn Labour has zero chance of winning an election, so will do all they can to adopt a position contrary to that of their members and oppose Corbyn.

So it seems we have the irresistible force of the majority of Labour MPs saying they will not support Corbyn, up against the immovable object of Corbyn saying he won't betray the members by resigning. What isn't so clear is quite how the landscape lies in terms of those that vote Labour up and down the country.

Those voters have seen so much change to the party's structure and composition in the past 18 months, it's unclear how the landscape is going to change, particularly as we have at least seven classes in Britain nowadays, and the mainstream parties are so alike these days it's a lot easier to get votes off each other (even UKIP can get votes of Labour these days).

 

Jeremy Corbyn wants a full fat socialist revolution; Owen Smith, his challenger, wants a socialist revolution-lite. Both have dangerous ideas.

 

We need a socialist revolution to about the same extent that biological evolution needs a young earth creationism revolution; that astronomy needs an astrology revolution; that the caloric theory of combustion needs a phlogiston revolution; and that the Copernican view of the solar system needs a Ptolemaic revolution - in other words, it's not what we need.

 

What's needed is for people to have better knowledge of the thing that's true and factual and beneficial to the world, not more of the thing that puts obstacles in the way to those pursuits.

 

 

 

 

 

 

 

What's The Best Essay Ever Written? Here's My Favourite...

What's the best essay ever written? Let me ask you to pretend there is such a thing. I like George Orwell's Politics and the English Language a lot. Oscar Wilde's The Soul of Man Under Socialism is very good. Isaiah Berlin's The Hedgehog and the Fox is probably better still. A great many of the essays by Ralph Waldo Emerson, GK Chesterton, Virginia Woolf, and Graham Greene are excellent, and there are quite a few I like by Mark Twain, Francis Bacon and C.S Lewis.

But I think my favourite of all is Leonard E. Read's seminal essay I Pencil (reprinted below), which once read should change the life of any reader that digests it. The basic outline of the essay Leonard E. Read illustrates is that nobody in the world knows how to make a pencil, because once you factor in the loggers, transporters, ore and graphite miners, steel manufacturers, lacquer appliers, and countless others in the production process, it literally took millions of people to make a pencil.

The truths behind it are far more beautiful and astounding than words can really capture. What makes it so beautiful is the sheer scope of what’s contained within – the years of different trials and errors, the innovations, the data-sharing, and the knowledge, information, and labour of millions of people spread out over the expanse of centuries required to make that pencil you hold in your hand.

  

The pencil, just like every object in front of you – your desk, the coffee cup, your chair, the wallpaper, carpet, light, plaster for the ceiling, and the electronic device on which you’re reading this blog post were produced by a collective effort that began hundreds (in some cases thousands) of years prior to your being born, by a cooperative of people that mostly never met each other.

 

That’s a story of the utmost elegance, but there’s another element to it: the end result of all those millions of units of collective effort has resulted in a pencil that costs a mere few pence to purchase – probably about 1% of the current UK hourly minimum wage. It’s a picture that’s really quite ineffable – a whole history of people giving their labour so that people of modern days could hold that pencil in their hand for a few pence.

 

Once you extend that picture to every good and service in the world, and every consumer, it shows the story of the free market as being quite a stupendous narrative. All of human history working together, each individual simply looking after their own needs (and their family), most absolute strangers to one another, in different geographical locations, at different times, and all comprising small elements in one gigantic progression explosion.

 

Please do consider all that when people tell you that capitalism is all about greed, selfishness and individualism. It is not, it is the opposite - it is about diversity, cooperation and being mindful of other people's wants and needs, as this tremendous essay illustrates better than any other I've read. Hope you enjoy...

 

I Pencil, Leonard E. Read

I am a lead pencil—the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.

 

Writing is both my vocation and my avocation; that's all I do.

 

You may wonder why I should write a genealogy. Well, to begin with, my story is interesting. And, next, I am a mystery—more so than a tree or a sunset or even a flash of lightning. But, sadly, I am taken for granted by those who use me, as if I were a mere incident and without background. This supercilious attitude relegates me to the level of the commonplace. This is a species of the grievous error in which mankind cannot too long persist without peril. For, the wise G. K. Chesterton observed, “We are perishing for want of wonder, not for want of wonders."

 

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that's too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because—well, because I am seemingly so simple.

 

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn't it? Especially when it is realized that there are about one and one-half billion of my kind produced in the U.S.A. each year.

 

Pick me up and look me over. What do you see? Not much meets the eye—there's some wood, lacquer, the printed labeling, graphite lead, a bit of metal, and an eraser.

 

Innumerable Antecedents↩

Just as you cannot trace your family tree back very far, so is it impossible for me to name and explain all my antecedents. But I would like to suggest enough of them to impress upon you the richness and complexity of my background.

 

My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods. Why, untold thousands of persons had a hand in every cup of coffee the loggers drink!

 

The logs are shipped to a mill in San Leandro, California. Can you imagine the individuals who make flat cars and rails and railroad engines and who construct and install the communication systems incidental thereto? These legions are among my antecedents.

 

Consider the millwork in San Leandro. The cedar logs are cut into small, pencil-length slats less than one-fourth of an inch in thickness. These are kiln dried and then tinted for the same reason women put rouge on their faces. People prefer that I look pretty, not a pallid white. The slats are waxed and kiln dried again. How many skills went into the making of the tint and the kilns, into supplying the heat, the light and power, the belts, motors, and all the other things a mill requires? Sweepers in the mill among my ancestors? Yes, and included are the men who poured the concrete for the dam of a Pacific Gas & Electric Company hydroplant which supplies the mill's power!

 

Don't overlook the ancestors present and distant who have a hand in transporting sixty carloads of slats across the nation.

 

Once in the pencil factory—$4,000,000 in machinery and building, all capital accumulated by thrifty and saving parents of mine—each slat is given eight grooves by a complex machine, after which another machine lays leads in every other slat, applies glue, and places another slat atop—a lead sandwich, so to speak. Seven brothers and I are mechanically carved from this “wood-clinched” sandwich.

 

My “lead” itself—it contains no lead at all—is complex. The graphite is mined in Ceylon. Consider these miners and those who make their many tools and the makers of the paper sacks in which the graphite is shipped and those who make the string that ties the sacks and those who put them aboard ships and those who make the ships. Even the lighthouse keepers along the way assisted in my birth—and the harbor pilots.

 

The graphite is mixed with clay from Mississippi in which ammonium hydroxide is used in the refining process. Then wetting agents are added such as sulfonated tallow—animal fats chemically reacted with sulfuric acid. After passing through numerous machines, the mixture finally appears as endless extrusions—as from a sausage grinder-cut to size, dried, and baked for several hours at 1,850 degrees Fahrenheit. To increase their strength and smoothness the leads are then treated with a hot mixture which includes candelilla wax from Mexico, paraffin wax, and hydrogenated natural fats.

 

My cedar receives six coats of lacquer. Do you know all the ingredients of lacquer? Who would think that the growers of castor beans and the refiners of castor oil are a part of it? They are. Why, even the processes by which the lacquer is made a beautiful yellow involve the skills of more persons than one can enumerate!

 

Observe the labelling. That's a film formed by applying heat to carbon black mixed with resins. How do you make resins and what, pray, is carbon black?

 

My bit of metal—the ferrule—is brass. Think of all the persons who mine zinc and copper and those who have the skills to make shiny sheet brass from these products of nature. Those black rings on my ferrule are black nickel. What is black nickel and how is it applied? The complete story of why the center of my ferrule has no black nickel on it would take pages to explain.

 

Then there's my crowning glory, inelegantly referred to in the trade as “the plug,” the part man uses to erase the errors he makes with me. An ingredient called “factice” is what does the erasing. It is a rubber-like product made by reacting rape-seed oil from the Dutch East Indies with sulfur chloride. Rubber, contrary to the common notion, is only for binding purposes. Then, too, there are numerous vulcanizing and accelerating agents. The pumice comes from Italy; and the pigment which gives “the plug” its color is cadmium sulfide.

 

No One Knows↩

Does anyone wish to challenge my earlier assertion that no single person on the face of this earth knows how to make me?

 

Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others. Now, you may say that I go too far in relating the picker of a coffee berry in far off Brazil and food growers elsewhere to my creation; that this is an extreme position. I shall stand by my claim. There isn't a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how. Neither the miner nor the logger can be dispensed with, any more than can the chemist at the factory or the worker in the oil field—paraffin being a by-product of petroleum.

 

Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me. Each one wants me less, perhaps, than does a child in the first grade. Indeed, there are some among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me. Perhaps it is something like this: Each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants. I may or may not be among these items.

 

No Master Mind↩

There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work. This is the mystery to which I earlier referred.

 

It has been said that “only God can make a tree.” Why do we agree with this? Isn't it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? We cannot, except in superficial terms. We can say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the life span of a tree? Such a feat is utterly unthinkable!

 

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies—millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

 

The above is what I meant when writing, “If you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing.” For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand—that is, in the absence of governmental or any other coercive masterminding—then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

 

Once government has had a monopoly of a creative activity such, for instance, as the delivery of the mails, most individuals will believe that the mails could not be efficiently delivered by men acting freely. And here is the reason: Each one acknowledges that he himself doesn't know how to do all the things incident to mail delivery. He also recognizes that no other individual could do it. These assumptions are correct. No individual possesses enough know-how to perform a nation's mail delivery any more than any individual possesses enough know-how to make a pencil. Now, in the absence of faith in free people—in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity—the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental “master-minding.”

 

Testimony Galore↩

If I, Pencil, were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there is testimony galore; it's all about us and on every hand. Mail delivery is exceedingly simple when compared, for instance, to the making of an automobile or a calculating machine or a grain combine or a milling machine or to tens of thousands of other things. Delivery? Why, in this area where men have been left free to try, they deliver the human voice around the world in less than one second; they deliver an event visually and in motion to any person's home when it is happening; they deliver 150 passengers from Seattle to Baltimore in less than four hours; they deliver gas from Texas to one's range or furnace in New York at unbelievably low rates and without subsidy; they deliver each four pounds of oil from the Persian Gulf to our Eastern Seaboard—halfway around the world—for less money than the government charges for delivering a one-ounce letter across the street!

 

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

 

 

 

There's Something You Should Know About The Rise Of These Prominent Figures

The Corbyn phenomenon and Farage phenomenon in Britain, the Sanders phenomenon and the Trump phenomenon in the USA, the Le Pen phenomenon in France, the Wilders phenomenon in the Netherlands, and the Tsipras phenomenon in Greece are all very different in various ways. But they have a couple of notable things in common.

Firstly, they constitute a movement of people based on the personality, character and views of a single leader who titillates them ideologically and publically vocalises the beliefs they have. And secondly, they are groups of people, often the least well educated in society (though there are, of course, plenty of exceptions), that feel let down by other politicians’ fabrications, past and present.

These movements consist predominantly of people who’ve fallen for the half-truths and falsehoods that politicians have told them, and the misjudged promises they’ve made, about how our citizens will be well off in terms of jobs, education and well-being.

The mass disappointment that turns people onto the coattails of the figureheads above is based largely on the ubiquitous embellishments of economics that fail to account for how global trade and competition penalises uncompetitive domestic industries, and that domestically we were never going to continue to have the lion's share on the manufacturing we once had.

Because the reality is, a large proportion of the lost domestic industry that's lamented, the declining social mobility, the high levels of youth unemployment in some parts and the widening levels of income inequality are all the result of masses of people in the developing nations starting to prosper by becoming more involved in the global market.

Just like with science, economics goes through its own Kuhnian paradigm shifts as well. People are quite used to seeing how new technology changes the labour market landscape, and they embrace it because they see the tangible benefits of having better technological sophistication, and also that the economic pie isn't fixed, meaning better technology doesn't mean fewer jobs.

What they don't see anything like as well, hence the misguided hope they place in the aforementioned political icons, is that things like the lost domestic industry and the widening levels of income inequality are a natural process of people in poorer countries becoming better off through trade - they are not things that our domestic politicians can do very much about, and nor should they.

As I've mentioned before in this blog, the benefits of global trade are rather similar to the innovations of new technology in that on the whole everyone is being made better off by it.

Consequently, then, the Corbyns, the Trumps and the Le Pens of this world find themselves being hailed as the antidote to the laments and so-called injustices of large groups that feel left behind and not listened to by the establishment, when in reality what they want done for them, and what is promised will be done for them by these leaders, either cannot be done, or when it can, would actually make them far worse off than they currently are.