Sometimes The Important Things Are The Hardest Things To Accept

The dogmatic interventionists, by whom I mean people enchanted by socialism and green politics, get so much wrong primarily because they have never understood the big tension that underwrites human beings' relationship with nature. That tension is one of conflict between order and disorder in the natural proceeding of things. Here's how it goes - and if I succeed in my task of making this easy to follow, some of you may acquire a fresh perspective on the matter of how we could view human beings and our interface with nature.

The fundamental axiom about being humans (or at least one of the fundamental axioms) is that we are evolutionarily primed to strive for order over disorder in just about everything we do. We may experience minor peaks and troughs, but the overall goal of each human is to be in a constant state of improvement - to favour ‘better' over 'worse’ and ‘right' over 'wrong’ and ‘true' over 'false’. The species wouldn't have been able to thrive without these qualities.

The human journey, especially in recent decades, has seen the explosion of millions upon millions of thoughts and ideas into standards and values that draw us gradually nearer to cultural and social convergence, and keep us pressing forward together in search of more and more improvement. Order instead of disorder is our cultural and social analogue. Whether it is a simple act like cleaning up some spilled juice, or pruning a garden, or something more complex like improving our own individual life, or trying to help a family get on the straight and narrow, or bringing about peace in a war ravaged country – progression is our shared preference. Where there is disorder we look to bring about order. 

But if you've been attentive throughout your life, you may have noticed that this puts us at odds with nature's natural tendencies. The reason being: nature tends towards the opposite direction - it tends towards disorder - and this is primarily due to the first two laws of thermodynamics. The first law of thermodynamics states that energy is conserved in any process involving a thermodynamic system and its surroundings.  That is to say, the increase in the internal energy of a system is equal to the amount of energy added by heating the system minus the amount lost as a result of the work done by the system on its surroundings.

The second law of thermodynamics states that the entropy of an isolated system which is not in equilibrium will tend to increase over time. This is what is meant by the notion that nature's tendency is towards disorder, not order. In a closed system, disorder increases with time, but amongst the tend towards disorder, when one bit of the system becomes quite ordered, there will be an exhaust of disorder elsewhere to offset the decrease in entropy, meaning the overall effect still produces higher disorder. This process is what we call thermodynamic disequilibrium, which exhibits a driven directionality of time irreversibly (that's why we see time going in one direction not two - forwards but not backwards).

But as you have no doubt noticed, nature is not maximally disordered. If it was, we would not be here to talk about it. In biological evolution we see this directionality of order in action, because there is an evolutionary arrow of time which locks in organised complexity in biochemical systems. That does not mean we have to believe there is intentionality in the system, much less that evolution has an end goal – but in the sense of being good at surviving at the genetic level, the ratchet mechanism that occurs in the system creates pockets of order. This is the process that humans try to mirror in our own endeavours.

And here is where things get even more interesting, because although nature's tendency towards disorder puts humans in tension with nature as we try to bring about order, there is another one of nature's fundamental principles that humans have adopted to make the progress as efficient as possible - and that is the principle of least effort (also known as the law of parsimony). Because the total energy content of the universe is constant and the total entropy is constantly increasing, nature always prefers low energy, to tend towards maximum entropy - that is, it will make the least effort to reach any observable pathway it tends towards. That is why, for example, when light travels it reverts to the path of least time; and it is why a hanging chain reverts to the shape of lowest centre of mass; and it is why soap bubbles revert to the shape of least surface area and volume.

Similarly, in human nature, the physical mechanisms that underwrite our drive forward, our biological evolution, the global economy, and the state of living things in terms of the planet, are also all bound up in nature's thermodynamic principle of the law of parsimony. Whether we are talking about Newton's laws of motion, the biological mechanism of natural selection, electromagnetic radiation, the second law of thermodynamics, or running a successful clothing business, installing machinery in a new factory premises, trying to get from London to Brighton, or setting up a remote controlled railway system for your children at Christmas time, all these things are underpinned by the law of parsimony - that what works most efficiently is the path that takes least effort and uses the least energy.

Consequently, then, there is often a big price to pay for the kind of short-sighted meddling we frequently see in things like climate change alarmism, strivings for enforced equality, stifling competition, price controls, state subsidies, damaging regulations, censorship, and most taxes you can think of - the human state of affairs would be greatly enhanced if left to many of its natural paths of efficiency, and would progress a lot quicker than it is being allowed to with the meddlings of the socialists and the eco warriors.

I'm not saying that everything the state does is a hindrance to progress; and nor would I wish to gainsay the idea that some social justice warriors begin their endeavours with good intentions. But quite often the motives of the establishment are not conterminously aligned with the overall human drive for improvment, which is cooperation and mutually beneficial transactions according to the Nash equilibrium of whichever system is in play during the transaction. Because of humans pursuing their best possible approach as per Nash equilibria, the agents of participation have to negotiate strategies that identify risk in order to have sufficient transparency to obtain an optimal (or efficient) end goal. When there is negative outside interference that distorts this process and diminishes transparency, we get perverse incentives and less-efficient outcomes.

And lastly, this has a big implication on the other of society's big incompetence - the hugely pernicious model of fabricated equality, whereby people try to artificially level the playing field to achieve equal outcomes. Given that the underwritten hardwiring of humans is competition for fecundity and species resilience, it is inevitable that strivings for equality of opportunity are problematical (although not necessarily undesirable) and drives for enforced equality of outcome are mostly reprehensible.

Equality of outcome should not be enforced because of its ultimate futility - it is anti-human nature. It would be tantamount to forcing the species into a reduced level of prosperity on the basis of a highly questionable, undifferentiated uniformity. The reality is, if humankind was artificially flattened down to the common denominator of the most unskilled, least hard working, uncompetitive members, it would not be able to thrive as a species in the way it has.

There is transparent knowledge and empirical understanding of how reality operates, how humans thrive best, what helps our development along, what aids our psychological well-being, and what retards progress - and whether you choose to swallow the red pill or the blue pill is entirely a matter for your own conscience and whether you want to embrace reality, truths and facts, or dwell in the realm of illusion and denial. Just remember that no one really ever gets away with anything negative they do; and no one ever really fails to benefit from anything positive they do.

 

 

On Memes (Before There Were Memes About Memes)

I was scrolling through some of my archival writings when putting together one of my books, and in my 'Essays' folder I found this piece I'd written in 1997 about memes, which seemed oddly pertinent given today's news about the latest foolish EU directive to force online agencies to automatically filter out any copyrighted material uploaded.

I thought it worth sharing for one simple reason - not because I have anything fresh to say about memes, but because it did strike me that this is one of those rare opportunities to share an old perspective on something that may be widely in common parlance now, but that at the time of writing was a fairly esoteric term known only by those familiar with Richard Dawkins' seminal 1976 book The Selfish Gene, from which the term 'meme' was first coined.

So I'm sharing my meme essay, solely for the purpose of giving readers the chance to see what my younger self thought about the memes 21 years ago when he had no idea they would go on to be so widespread, and that the term would be co-opted to represent far more than in its inceptive use.

Reprinted below:

On Memes

A lot of people share ideas and views that are valuable (don't steal from your boss, look before you cross the road, white t-shirts are better than black ones on a boiling hot day, and so on). But a lot of people also share ideas and views that are foolish and damaging (give pregnant women thalidomide, price controls are a good idea, vandalism is cool, and so on).

One word can aptly describe why all this happens - and that word is 'memes'. Just like mutations in DNA, ‘memes’ are packets of information passed from mind to mind. Just about any piece of information has the potential to be passed on like a meme, so long as there is a reason for it to be passed on. When a pregnant woman thinks it's fine to smoke 40 a day, and when a leftie asserts that the world is unfairly unequal and that we need a revolution, they are both acting on past, often very subtle, information signals.

Consequently it is to be expected that people believe all sorts of great and foolish things, as society involves lots of meme sound-bites that get passed on rather like how germs get passed on - by contagion. The reason memes are somewhat analogous to genes in biology is that they have characteristics that lend themselves to being preferentially duplicated or repeated.

Of course, memes are not simply the copying of the same information over and over again; just like genetic mutations, they are susceptible to insertion (where something extra is added to an idea), deletion (where something is taken away) and point mutation (where a part of the idea is changed into something else), as well as straightforward duplication (the copying of an idea).

Memes are cultural, and as such they are Lamarckian in that they are acquired characteristics that are inherited. They comprise elements of cultural ideas, symbols or practices that transmit from one mind to another through speech, gestures, rituals, or other imitable phenomena - and as a consequence, they demonstrate both the wisdom and the foolishness of the human race.

They act as cultural analogues to genes in that they self-replicate and respond to selective pressures. If one thinks of examples such as catchy melodies, catchphrases, religious beliefs, superstitions, jokes, clothing, fashion and technology, we see that this gives evidence of the memetic propagation of language, terms and ideas. 

Here's an example. Suppose we have two memes with regard to girls’ hairstyles. Meme 1 involves a girl tying her hair in a pony tail, whereas meme 2 involves a girl tying her hair in barrel hitch knots. If tying one’s hair in a pony tail induces comfort, convenience, happiness and positive feedback, then meme 1 will be duplicated and repeated with increased frequency. If, however, tying one’s hair in barrel hitch knots induces more comfort, convenience, happiness and positive feedback, then meme 2 will be duplicated and repeated with increased frequency.

As a general rule of thumb, a meme will spread depending on how its characteristics affect the organism. The mark of a good meme is one that is often expressed in voluntary behaviour, relative to other memes, due to the fact that it has left the organism feeling rewarded. The fact that pony tails are popular and barrel hitch knots are not tells us everything we need to know about their selectability in girls' hairstyles.

Even as I observe the first few pages in today's edition of a friend's daily newspaper, meme theory seems well suited to describe the cycles observed in fashion trends (in today’s case, the rise and fall of skirt lengths depending on whether girls would rather be modest or feel suggestive), or the popularity of certain belief systems (in today’s case, the popularity that Buddhism is gaining as a reaction to the hectic pace of modern life, and the popularity that both Scientology and Kabbalah are gaining due to the celebrities that endorse them).

Not wishing to invoke any ‘conscious thinking’ to memes (at least, not in the sense we are discussing here), but given that memes are packets of information looking to get themselves copied through various kinds of receptacles (computers, newspapers, magazines, billboards, radios, letters, and most generally of all, brains themselves) there are inevitably going to be a great many bad memes that spread throughout populations causing harm to their hosts. 

In fact, in many respects a lot of the bad memes are more likely to be passed on than the good memes, because many of the ideas and beliefs that are most easily embraced are the overly-simplistic ones that we don't take enough time learning to resist. For example, a lot of beliefs are adopted because they facilitate polarising black vs white thinking, highly selective worldviews, emotional appeals for quick-fix solutions to complex problems, and attraction to the kinds of dogmatic certainty and trivialisation of contra-contentions that we see in cults and ideologically driven political groups.

Given the ease with which new memes are formed, and how rapidly they spread, humanity will always have memetic diversity, and this yields lots of competing ideas and human flaws regarding how to assimilate a multitude of ideas into a coherent worldview.

With genes there is selection for the fittest organism, where biological forms acquire traits that better enable them to adapt to specific environmental situations, which results in their improved evolvability due to the perpetuation of those beneficial traits in the generations that succeed them.

With memes there is nothing quite so effective. For memes, there is selection for the behaviour that the organism finds the most satisfying, easy to understand, personally self-congratulatory and culturally consistent - and this gives no guarantee that bad ideas won't endure - especially if, as seems inevitable, the world's population becomes more and more closely connected through increased technology capacity.

 James Knight 1997

It's Hard To Say Goodbye If You Won't Leave

Humans, through their short-sightedness, frequently make it difficult to get rid of the things they do not like, because they continually change the definitional goalposts to ensure the things they dislike do not die out. This is likely due to the fact that humans appear to show susceptibility to prevalence-induced concept change.

Take poverty as a good example. In his Wealth of Nations, Adam Smith cited the linen shirt as an example - that is: not being able to afford a linen shirt does not mean you are in poverty, but a society that deems poverty to mean you are unable to afford a linen shirt will see you as poor if you can't afford to wear one.

Many relatively poor people in the UK today have riches that their great grandparents wouldn't have thought possible. In the year 2018, the smart phone might be the present day linen shirt, as even most relatively poor people have one. In the future the linen shirt equivalent will be something only the richest today own - or it may be some technological wonder that hasn't yet been invented.

Another definition of poverty, the EU one, is any household income that is below 60% of the median income. This is a truly asinine definition (as I blogged about here) - not least because it ensures that poverty cannot fail to exist. If such a thing is measured by proportions of the middle of the income distribution, it is literally impossible for some people to avoid being in poverty, however well off they are.

I can think of numerous other examples where definitions are shifting to ensure it is harder for them to die out. Racism is a good case in point. Once upon a time racism would have been something like disapproving of inter-racial marriages or displaying a "No blacks, no Jews, no Irish, no dogs" sign in your shop window. Now it can be something relatively innocuous like not having enough ethnic diversity in your film crew or at your university, or being highly critical of terrible human inventions like Islam.

Sexism is another good case in point. Once upon a time sexism would have been something like believing a woman's place is in the kitchen. Nowadays even inequalities that have a perfectly natural outcome on the basis of individual choices can have sexism levelled at them.

 

People of 50 or 60 years ago would be amazed at how less racist and sexist society is today - yet hear some people speak and they give the impression that societal progress is imperceptible to them, and that they always want to be consumed by dissension and incongruity.

Aggression used to mean antipathy towards a person that results in violent behaviour or readiness to attack. Nowadays you can be accused of being aggressive if you mildly offend someone with a view that departs from the mainstream. Injustice used to be a more powerful concept, as did the concepts of truths and facts - but today the power of their meaning has been eroded away into a passive-aggressive relativism that seeks to undermine the edifice of human progression. The list goes on and on.

Consequently, in a world in which we've never been more prosperous, more knowledgeable, more equal, healthier, wealthier and with the highest standard of living, it seems that many people want to perpetuate their dissonance and actively seek ways to be unhappy with the world. We should, of course, continue to challenge genuine injustices and societal ills - but too often by changing the definitional goalposts people have an easy pretext for losing sight of perspective.

Because if the medium to long-term future resembles the past, I can conceive of upcoming scenarios in which almost everyone has a living standard that people of today would marvel at, but yet they habitually partake in complaints about annoyances that would make us scoff.

Perhaps it would be similar to how a young teenager from the Victorian period, who had to work all day in grotty, polluted, laborious, precarious conditions almost as soon as he was able, would be somewhat insensitive to the complaints of a young person of today who feels oppressed by patriarchy, and who hasn't yet managed to acquire the latest smart phone on sale in the shops.

Finally, with all this in mind, I will leave you with this prescient passage from Phineas Finn, which I think is easily Anthony Trollope's best novel:

"Many who before regarded legislation on the subject as chimerical, will now fancy that it is only dangerous, or perhaps not more than difficult. And so in time it will come to be looked on as among the things possible, then among the things probable;—and so at last it will be ranged in the list of those few measures which the country requires as being absolutely needed. That is the way in which public opinion is made."

"It is no loss of time," said Phineas, "to have taken the first great step in making it."

"The first great step was taken long ago," said Mr. Monk,—"taken by men who were looked upon as revolutionary demagogues, almost as traitors, because they took it. But it is a great thing to take any step that leads us onwards."

On Looks, Height and Higher Wages

When watching the Cathy Newman interview with Jordan Peterson a while back, I recall a moment when it looked as though he was going to suggest to her that if she was much less attractive she probably wouldn't be sitting there on television interviewing him. He did, of course, stop well short of saying that, and it may be that I'm misinterpreting on his behalf. But I do recall a point in the interview when it came across my mind: whether Cathy Newman has ever consciously considered that the job she is doing is itself quite narrowly selected for in terms of physical appearance.

This is all based on well known correlations between positive characteristics, like beauty and height, and higher earnings. Last time I checked, attractive women earn on average about 5% more than less attractive women, and attractive men earn on average about 10% more than less attractive men (it may have changed slightly since then). This indicates that the less-attractive men are penalised more in the labour market than less-attractive women. When it comes to weight though, heavier women are penalised with lower wages whereas men not much so.

But what is the causality here: Do people earn more because they are more attractive, or is it positive qualities associated with attractiveness that make them more likely to be in higher paid jobs? It's just a hunch, but I feel fairly certain that in the vast majority of cases it is not the good looks that are making people do well in the labour market - it is much more likely to be the things associated with good looks that play the vital role in this success. 

 

For an analogous example, I remember reading in a social science journal about 10 years ago that while height is advantageous in the labour market, the people upon whom this advantage is conferred are not the tall in general, but more often those tall adults who were also tall in high school. People who were not that tall in high school, but who went on to be tall in adulthood, did less well on average than those who were also tall all the way through high school.  

 

Similarly, just as being a tall high school pupil engenders confidence and status, I think it is likely that on average more attractive workers are more likely to be healthier, more confident, have a wider social circle, be less insecure and be more outgoing. And if this was the case since their school years, it would be unsurprising that this plays out with higher wages later on, as better looking people have more confidence in looking for promotions and higher self esteem when it comes to demanding more pay.

I've also noticed that good looks appear to be more of a priority for employers in businesses where good looks matter more - especially in the service industry. For fairly obvious reasons, consumers are more likely to care about a good looking barmaid or shop assistant or waiter than they are a good looking bus driver or cleaner or financial adviser. Similarly, if all those positive qualities associated with attractiveness help in the labour market, then you would expect to see, on average, better looking people earning more across the board.

But by equal measure, with these determiners, you should also expect to see outliers, where many less attractive people are out-earning their competitors by having positive qualities associated with being the physical underdog - like tenacity, perseverance, diligence, and other efforts that rely less on natural qualities and more on hard work.

I must admit, though, I'm still stumped as to why less attractive men suffer more in the labour market than less attractive women, given the looks are purported to be a more important aspect of womanhood than they are manhood. And I can't find any studies that shed any light on this.

The only thing I can think might be driving this is not that being less attractive is any more important for males than for females, but perhaps that work is, in general, a more important factor in male status-mongering - and therefore more women that are disadvantaged by looks have opted out of the labour market altogether, skewing the statistics.

Free Tampons For All: A Bad Idea

You'd like to believe that qualified doctors are fairly well educated people. Alas, on this occasion they have proposed a thoroughly foolish idea - that sanitary products should be handed out free to all menstruating people.

While it seems fairly obvious that it's a good idea for hospitals to provide sanitary products as part of the patient's course of care during procedures, I can't for the life of me understand why anyone would think it's a good idea for the state to subsidise sanitary products for the whole population.

When I think people are wrong, I can almost always see the reason why they think as they do. But not so here - I can't think of any merit behind the idea, when the alternative of providing money or vouchers for people who cannot afford these products is obviously so much more preferable.

I'm also baffled as to why the doctors voting for this want to stop at sanitary products for menstruating people. If it's the nature of the need that galvanises them, then why not have the state provide all the toilet paper for the population too? In fact, why stop there - water is an essential thing for life, so why don't we insist the state pays all our water bills too?

No, this is ludicrous. By all means, let the state help out with the provision of sanitary products in any cases where it is difficult for someone to buy them - when staying in hospital, in emergency cases in schools, etc - and naturally, let the state provide the funds for anyone who can't afford basic necessities like tampons, toilet paper, food, water and clothes. But for heaven's sake, don't let the state anywhere near the operation of providing sanitary products for the entire population. There are things called shops for that - and shops have the commercial nous and diversity of product to meet every consumer's needs.

A Botch Up Of Statistics: Do Gay People Really Have More Sex?

A friend posted a link to an article in The Economist that I ended up clicking on to read. It purports to dispel the myth that gay people have more sex by mining the data from a popular dating site. Here is what they claim to have found:

"It seems that the gay men, straight men, gay women and straight women on OKCupid have all had exactly the same median number of reported partners: six."

Dear oh dear. It would appear that The Economist is being sloppy here - it is taking its sample group from one source - a dating site called OKCupid - which has an above average number of people not in relationships, therefore an expected above average number of sexual partners. That is not an adequate sample group for determining whether gay people have more sex than the broader heterosexual population.

It would be a bit like checking the UK population for homophobia, but only surveying people in mosques; or checking who in the UK population has obtained five GCSEs or more, but only surveying people serving time in prison; or checking the UK population for obesity, but only surveying people in gymnasiums. I have no idea whether gay people have more sex than straight people - but either way, mining such a small sample set from a popular dating site is not going to provide a reliable heuristic for determining one way or the other.

I could take a stab at the problem from an economic perspective - but I have nothing to base it on, only conjecture. And given that The Economist couldn't do any better than a highly unrepresentative source like OKCupid, I presume that there isn't a comprehensive data set on this matter (I haven't checked - so do post a link to correct me if I'm wrong).

A more inquisitive way to consider such questions from an economic perspective would be to ask: what might motivate gay people to have more sex than straight people? I can think of one or two possible reasons why. Here's one. Gay couples are disproportionately childless, and are therefore probably likely to have more sex than couples with children. Being childless they are probably less tired; they probably have more opportunities of an evening in not having to worry about the kids. Added to that, parents have extra reasons to stay healthy and live longer, which is probably a factor too in their living less tumultuous lives.

Another factor I can imagine has had a bearing on the statistics would be that, sadly, gay people have incurred more hostility for their sexual orientation over the years than straight people (although it's a lot better now). That might have led to more 'in the closet' sexual activity, but also more depression and anxiety, where increased sex may have had some ameliorating effect. Persecuted and marginalised people may also end up caring less about their own sexual well-being too, which may mean higher incidences of promiscuity.

Moreover, gay people who have felt depressed and marginalised because of their sexuality, especially younger people, are probably more likely to go out more to places where sex is part of the night-time scene; and in those environments they are probably more likely to consume more alcohol too, which may also increase the chance of more sex (this is a pattern that has swept across the heterosexual social circles too, with the binge culture providing succour through superficial sexual sustenance).

A final reason, which may play out in their thirties, is that straight men are more likely to have their sexual habits constrained by women looking to be mothers, whereas gay men would not experience those constraints, thereby opening up their options for other partners, and may have more sex in those scenarios.

All of this may contribute to gay people having, on average, more sex than straight people - especially if the lifestyle involves more surreptitiousness, increased family pressures and fewer stable relationships. I don't imagine I can test these hypotheses, and they may turn out to be implausible - but I fancy they are more plausible than The Economist's report from a very unrepresentative data set which is bound to skew the reality of the situation.

My speculative stab at the truth is based on the well worn principle that people usually have good reasons for doing what they do - and I can at least conceive of some possible reasons for changing behaviour regarding these matters. On the other hand, let's hope (and perhaps presume) that we've come a long way since the days of gay people feeling more pressured and under more duress than straight people - and that these past differences in behaviour and lifestyles are now narrow enough to be imperceptible.

They're Fellow Humans, It's Not Rocket Science!

As most of us have known for years, migrants and refugees are good for economies - and now there appears to be 30 years of evidential data to back this up. This ought to be considered though in line with an important distinction between the benefits of having free movement of labour, and the problems of having free movement of people instituted in regulation (I blogged about this distinction here).

Because, you see, the thing that human beings ought to do, that they don't do enough, is think primarily about the benefit of immigration to the immigrants themselves, not through the very parochial lens of counting costs of immigration on indigenous folk. The two key benefits of immigration for immigrants are:

1) They work hard and try to make a better life for themselves and their family.

2) The better life they are making for themselves and their family is better here than it would be in their home country.

Some people assert that “It’s alright for you, you don’t live in a community that has been negatively affected by immigration!” This is true, but I would swing the twit-ometer back their way by saying “It’s alright for you too, you don’t live in a community like the ones from which the immigrants were escaping when they chose to come here!”

And we all know about Schrodinger’s immigrant – the one that simultaneously comes here to steal your job and sponge off the state on benefits. Schrodinger’s immigrant is largely based on the phenomenon of being angry at immigrants whatever they do, putting on your parts when immigrants work, and putting on your parts when they claim benefits; putting on your parts when they integrate too much, and putting on your parts when they stay in their own communities.

Lastly, you'll also know of those who complain about foreign aid, declaring that we have people on our streets that we should be helping first. It's a familiar piece of virtue signalling, but I would suggest to you that the kind of people who wish to care more about people in their own country by caring less about people in even poorer countries are not likely to be the kind of people who care about either group of people very much.

Edit to add: In this debate, most people forget to ask the primary question: why are wages low in a poorer foreign country and higher in the UK? The reason they are higher in the UK, of course, is because productivity is higher in the UK, thanks to better technology and advanced capital investments. Consequently, higher wages in the UK are the result of economic growth and prosperity - but equally, where wages are low in foreign countries that have the competitive advantage over the UK in a particular industry, this is wrongly seen as a threat, when in fact, it is another part of the UK’s increase in prosperity. 

This is also where confusion comes about lower foreign wages that are thought to be ‘unjust’ relative to UK wages. If industries in the UK cannot compete with industries abroad, it is not because of low wages abroad, it is because of high wages here: we have bid up wages so high that domestic industries are no longer as profitable and better off outsourced. This is another reason why tariffs are only pursued by economic imbeciles - they add weight to inefficiencies and starve efficiency by keeping prices high for consumers, and keeping competition and innovation down. They also misallocate resources, as industries that are protected from competition keep people and raw materials in areas of the economy that deny other areas of the economy those resources.

Immigration brings about similar benefits in terms of all the above!! 

Another Cracking Policy That Will Do More Harm Than Good

We just recently learned that big business bosses will be forced to justify salaries under new government plans, which include sex pay gaps, top end salaries, and also parental leave policies - the whole shebang. Not only is this is a terrible idea because of the misunderstanding of the facts - it is a potentially damaging idea that will probably harm those it seeks to help.

What's behind the insistence that big companies are now mandated to calculate and publish their ‘pay gap stats’ is the spurious belief that there is an unfair pay gap between men and women (there isn't!) and that the firm's top earners are riding roughshod over the lower earners in the company (they are not!).

Not only have these politicians shown they don't have a very good eye for facts - what's more, even if it were true that there is an unfair sex pay gap or an unhealthy stratification, this policy is too low-resolution to get to the heart of it. Simply getting firms to publish their pay stats won't get to the crux of why, when there are differences, those differences exist. Only by comparing jobs like for like can this policy be illuminating - and this latest idea will not achieve such a thing.

A firm that publishes the mean and median salaries of the men and women in their workforce will omit many vital factors that determine pay, such as experience, qualifications, risk-taking, scalability, and several other minutia areas of the remit. A proposal that looks to redress what it thinks are illegitimate causes of a pay gap that are actually legitimate causes would do more harm than good. 

But that's not all of it - unfortunately, such an injudicious policy may well come with another unintended consequence - one that could actually disadvantage women in the workplace by skewing employer incentives to act against women.

A firm that is forced to demonstrate a 'fair' balance of sheet of equal pay when there is currently a 'fair' balance sheet of sometimes unequal pay is not going to help women, it will only harm both women and men, because some of the important factors that determined legitimate unequal pay (experience, risk, working patterns, qualifications, different priorities, etc) and some of things that determine what people value from a job (flexibility, shorter hours, career breaks, reduced responsibility, working from home) will be undermined.

It will be yet another example of a deleterious effect that comes when politicians stick their noses in where they do not belong.

Why Capitalism Is A Lot Like Magic

Magic is defined as the power to influence by using mysterious forces. The magician on stage bewilders his audience because he knows things about the set-up that the audience does not.

Capitalism is like magic because its powers are seeped in qualities that appear to be mysterious to the majority of the population. Even very prescient minds like those of Adam Smith, David Ricardo and John Stuart Mill were nowhere near envisioning just how this miracle of capitalism would take form.

The magic of capitalism, to the nascent enquirer, is that it appears on the surface to depart from the rubric of one of humanity's great laws - the law of diminishing returns. This is why so many people see capitalism as a zero sum game, and are so regularly confused by the fallacy of the fixed pie - it can be quite counterintuitive. After all, if I have more of something, doesn't that mean someone else needs to have less?

Sometimes, yes. If I buy the last packet of cookies in the local corner shop, the person behind me might have to wait until more stock is delivered. If I give you 2 slices of my pizza, I will only have 6 slices left instead of 8. Nature adheres to similar regularities: one barrel of oil sold in the market is one less barrel of oil in the ground. A potato farmer who digs up his yield has fewer potatoes in the soil.

But imagine a potato field whereby every time the farmer dug up his yield he ended up with more potatoes in the soil than before he started. And suppose that after digging up his mysterious additional yield he found that there were even more potatoes than previously before. If this process kept occurring, we would rightly infer that the farmer has a magic potato field.

Capitalism is like the magic potato field. It is not just a trading of goods and services - it is, at heart, a trading of ideas and innovations, and they do not yield diminishing returns; they proliferate in number, rather like (and also because of) populations increase because of exchanges of DNA through sex. When people think up ideas that go on to become light bulbs, combustion engines, stethoscopes, mousetraps, cat's eyes, cars, helicopters and space stations - the opposite of diminishing returns happens - we enjoy the law of increasing returns.

This is why capitalism is rather like magic - a non-supernatural miracle, if you like. The more we increase our prosperity, our progress and our standard of living, the more we can increase it further; the more ideas we have, the more ideas we will have; the more jobs we create, the more jobs we can create; the more we innovate, the more innovation becomes possible; and the better our standard of living gets, the better it can become.

Not only is this why capitalism is like magic - it is just about the only thing in the world of its kind: where individuals who pursue improvement for their own lives, simultaneously make everyone else better off by doing so. It is the great human cooperative; the greatest democracy; the greatest antidote to corruption and tyranny; and the greatest celebration of talent, diversity, individual sovereignty and equality (yes, equality) the world has ever seen or probably will ever see.

That so many people are its enemy; that they so willfully misunderstand it, distort it, cherry pick at it, formulate so many confused arguments against it, and call for interventions that retard its gravitas, stifle opportunities and impede its magical effects on fellow humans is one of biggest regrets we as a species should have.  

My Top 20 Exhilarating Things For The Mind To Master Before It Dies

In no particular order, my 20 things to take the time to master in life to attain an enriched & exhilarated mind:

1) Hume's distinction between causality and causation, and the fact that everything we know comes from experience

2) That mathematics is the territory and physics is the map, not the other way around

3) Aumann's Agreement Theorem

4) Price Theory

5) Applying nature's principles of natural selection and the law of parsimony to human applications of behaviour

6) Bastiat's principle of 'That Which is Seen and That Which is Not Seen', and the Broken Window Fallacy.

7) The nature of logic: that logic is derived from experience and arises out of our own conceptualising of the world

8) That everything to do with God is both a creation and a discovery

9) That the free will and determinism topic is not an 'either/or' proposition - it is a mathematical spectrum.

10) Harsanyi's Amnesia Principle

11) That morality is both objective and a human invention

12) The principles of Comparative Advantage

13) That competition and exchanges of goods, services and ideas are the primary things that drive progress

14) The Ideological Turing Test

15) The Coase Theorem and Pareto Efficiency

16) Which 'unequal outcome' situations are problems that need solving, and which are simply an aggregation of individual differences.

17) That physics and metaphysics seamlessly blend into one another's territories

18) The sorites paradox and its application to human ideas

19) The fundamental details that make up the great enrichment and the hockey stick of human progression

20) That the sovereignty, rights and liberties of the individual are primary over any group or association that individual has

Being Smart When Dining Out

I’ve been reading Tyler Cowen’s book on food - dubbed ‘New Rules for Everyday Foodies’ - which contains a few pearls of wisdom on dining out that I thought worth sharing.

1) At fancy and expensive restaurants (say, $50 and up for a dinner), you can follow a simple procedure to choose the best meal. Look at the menu and ask yourself: Which of these items do I least want to order? Or: Which one sounds the least appetizing? Then order that item. The logic is simple. At a fancy restaurant, the menu is well thought-out. The kitchen’s time and attention are scarce. An item won’t be on the menu unless there is a good reason for its presence. If it sounds bad, it probably tastes especially good. So order the ugly and order the unknown. You’ll probably get a better and more interesting meal.

While it’s not a watertight system, I like the idea of keeping it in mind as a possibility, as it has proved fruitful for me in the past. On the other hand, be wary of something Tyler Cowen neglects to mention. Some of the more attractive sounding dishes on the menu will be included for perceived consumer popularity - not for their high quality but for their high demand from less discerning customers. Chicken dishes often tend to be contained in this set.

2) When you enter a restaurant, you don’t want to see expressions of disgust on the diners’ faces, but you do want to see a certain seriousness of purpose. Pull out a mirror and try eating some really good food. How much are you smiling? Not as much as you might think.

Yes, indeed. Restaurants where there is lots of fun and laughter can be great places for a night out. But don’t necessarily be put off by a restaurant in which the patrons are eating quietly and not communicating much - it can often be a sign that the food is glorious. The average person, when devouring a gorgeous meal, probably focuses quite prominently on the food, and is less loquacious because of it.  

3) The larger the number of restaurants serving the same ethnic cuisine in a given area, the more likely the food they serve will be good. Why? Restaurants that are competing most directly against each other can’t rest on their laurels. They are also typically appealing to an informed customer base. And finally, they can participate in a well-developed supply chain for key ingredients.

True, restaurants in highly competitive areas are much more likely to keep up the high standards of cuisine that will keep the customers coming in. And as a corollary, sometimes you need to be wary of small towns with only one Chinese or Indian or French restaurant. If competition is sparse, sometimes standards will slip.

In addition

Now, as Tyler’s book is a heavily centred on American dining, it probably won’t surprise you lovely readers to learn that I’ve gathered a few of my own pearls of wisdom throughout my own dining experiences in the UK and in Europe:

Don’t necessarily have a main course

In decent restaurants, you are going to find some nice mains, but some lovely starters too, and a few decent side dishes. Given that you’re likely to experience diminishing marginal utility with a main (it is usually less enjoyable after consuming the first 50% on the plate), consider skipping the main course and instead order two or three starters and a side (or sometimes even better, if you’re a couple dining, two mains or six or seven starters and sides that you can share).

Restaurants will pretty much give you any combo you want if it's on the menu - just ask

If it's on the menu, it's in the kitchen - so as long as you don't commit the faux pas of offending the chef by asking him to compromise on a dish he or she has taken pride in creating, feel free to ask for any combination of things you’d like. If, for instance, you see halloumi as a part of a main, but you want another main, and halloumi as a side, and a sauce that’s in a dish you don’t want but you’d like it in one you do, tell the waiter, and you’ll usually find you get the exact dish you desire. You may even give the chef some new ideas! 

Specialising brings rewards

Try to avoid ordering a food that is not part of the restaurant’s speciality. Why is food sold at a bowling alley generally likely to be worse than food sold in a restaurant? The reason is - it's about speciality. A restaurant specialises in selling food; a bowling alley specialises in selling a good time bowling. Food is an additional extra in the bowling alley, but the main selling point of a restaurant, so you'd expect it to be less good in a bowling alley. Try to eat your lasagnes in Italian restaurants, your paellas in Spanish restaurants, and your curries in Indian restaurants, and so forth.

Pasta dishes are generally a bad thing to order

Why? Two reasons. Firstly, pasta dishes are one of the easiest and cheapest dishes to cook yourself (see my next one below). Secondly, pasta dishes are generally bad value for money in terms of the ratio of pasta to other ingredients: the dish has far more pasta than anything else, and consuming it is therefore a sub-optimal use of your taste buds and digestive system. If you’re in a restaurant with pasta on the menu, there will be plenty of superior choices instead.

Eat what you wouldn’t cook for yourself

It’s a good idea to regularly order dishes in restaurants that you are unlikely to eat at home or have cooked for you elsewhere.

Go to restaurants where rent is likely to be high but the owner not filthy rich

A restaurant in a high rent area has expensive overheads - and this in a highly competitive industry where over 50% of all restaurants close within three years of starting up. A restaurant in a high rent area needs to a have a continual standard of top notch food, or else face closure. And in highly competitive areas of the city too, this brings a high probability that the food will be very good.

Finally, here’s one for staff restaurant frequenters - be on the lookout for the kitchen’s incentives

If haddock was on the menu the day before, you might want to think twice about ordering fish pie if it’s on the menu a couple of days after.

Further reading --

On Tipping

On How To Split a Restaurant Bill

If Jeremy Corbyn Managed A Restaurant

The Economics Of An 'Eat All You Can' Buffet

They Don't Know When They Are Onto A Good Thing

A parliamentary committee has got its knickers in a twist, believing that the tuition fee system for England's universities is ripping off students and giving taxpayers poor value for money. The reality is, the system is not ripping off students - the size of the debt the committee is balking at is to do with there being far too many students, doing degrees not worth their price to the taxpayer.

Currently around 45% of student loans end up being written off, so if the article is right in saying that in the next 25 years the debt is going to rise to £1 trillion, then at this rate the cost to the taxpayer will be in the region of £450 billion of unpaid debt (this will be offset by tax revenue from post-graduate earnings, but that would still come into the treasury in tax revenue if prices of degrees better matched their value to society).

The report calls for "immediate reforms" - such as “cutting interest rates on repayments”. This is a foolish idea: interest rates constitute the price of borrowing, and should not be cut, because money loaned now will not be worth as much in the future, so the interest reflects the cost of the loan to the lender. If you’d lent me £50 in 1989, and I insisted on paying it back in 2019 - it doesn’t take much imagination to work out who comes out best on the deal.

The student loan system isn't a terrible system if and when graduates pay it back through their high earnings. The system is geared towards bridging the disparity between your peak earnings, your peak equity and your peak debt, because the majority of your biggest expenses come in your first two decades of your adult life, and the majority of your equity and highest earnings come in the last two decades of your working life.

Consequently, cries that the system is unfair to students are really quite laughable - unless you have a very odd interpretation of the word 'fairness'. A post-graduate student who goes on to earn £24,000 a year will pay back just £42 per month. Earn £27,000 a year and he'll pay back just £65 a month. Earn £30,000 a year and the repayment is a meagre £87 - hardly unreasonable sums.

The main thing that muddies the waters in this system is when too many students are doing degrees. And it isn't surprising to find in a study that when prices of degrees are more in line with what they cost to obtain, the motivations to find higher paid work are more apparent - which is exactly what we'd hope to find.

Further reading - if you would like a more detailed treatment on this, I once put it all down in a blog here:

Everything You Need To Know About Why We Absolutely Should *Not* Scrap Tuition Fees (But Were Afraid To Ask)

Creative Destruction: The High Street 'Crisis' Is Like Trump's Tariffs In Reverse

 

Many people are bemoaning the so-called high street crisis as being indicative of some kind of prophecy of doom on our retail industry. Now while we can all feel sympathy for the people that lose their jobs because of this, the overall picture is that just the opposite is happening: the closure of the high street shops is democracy's way of saying that better things are happening elsewhere, and that on average, the public is reaping the rewards of an ever-changing society.

This is why it's like tariffs in reverse. Tariffs benefit a small proportion of the domestic population, and hurt the rest of the population, to engender an aggregate loss. High street store closures hurt a small proportion of the domestic population, and benefit the rest of the population, to engender an aggregate gain.

What I'm describing here is standard in economic theory: it is a natural selection-type filter known as Schumpeter's 'gale of creative destruction' (after the economist Joseph Schumpeter). It is the market's way of saying that demand for whatever you are providing, or for the way you are providing it, is declining.

Creative destruction transmits informal signals, not just about who should be selling what, and how, but also about maximising investments, prudent and imprudent capital ventures, selection pressure on innovation and efficiency, new training opportunities, alternative products and improved technology.

Creative destruction is not just a filtering effect on struggling businesses and industries, it is also an opportunity for greater competition, which channels creativity, modernisation and material advance. It does not mean an end to high street stores; it means there is a niche opening for better ones. Competition doesn't just drive drown prices for consumers, and ensure increased efficiency from suppliers - it provides fresh opportunity for would-be businesses to enter the market and add to the value created in society.

Those high street shops, at their best, will not be retailers struggling to compete with more efficient and cheaper online competitors - they will be small businesses like bakers, butchers, patisseries, cafes, restaurants, takeaways and so forth, that are continually able to provide goods and services that people prefer over the bigger retailers, often to enjoy the sense of community spirit too.

Creative destruction involves losses in society as well as gains - but the 'creative' part far outweighs the 'destruction' part - as the threat of bigger competitors acts as a driver for new ideas and opportunities, and continual demand for improved products and services.

To the small minority of politicians who think the so-called high street crisis is their cue to call for state intervention in the shape of bail-outs, subsidies, tax breaks and financial restitution - this is as clumsy as it is foolish. Any political attempts to cushion the blow only serve to distort the vital information signals regarding where capital is best allocated, where labour is best employed, and which businesses and industries are likely to create the most wealth and value in society.

 

Finally, it shouldn't have slipped your notice that the political buffoons appearing on media outlets recently bemoaning the mass decline in high street retailers are the exact same political buffoons who've been so influential in helping these closures along by imposing literally billions of pounds of increased overheads on these companies through their inflated minimum wage legislations and fattened up taxation on businesses. Statist chickens always come home to roost.