The perils of reading the fake government org chart

Out of the many oddities of the democratic process in the west, two points stand out.

First, the average citizen has very little idea about how his government works.

Second, the average citizen has very little idea that he has very little idea about how his government works.

If pushed, I think the second point is the more remarkable one. It is quite an amazing feat of propaganda. The evidence that government doesn't work the way most people assume it does is all around them. But they somehow manage to never notice.

I think it comes back to the distinction between the real and the nominal organisational chart of government.

In the case of China, your average American understands that he has no idea how its government functionally operates. Furthermore, he also assumes, rightly, not to trust the notional description coming from China of how its government works. America has a Congress. China, as it turns out, also has a Congress. The average American, however, is likely to be correctly skeptical about whether this body is actually exercising any substantial decision-making authority. He suspects that finding out how China's government actually works is likely to be a difficult task, and one that will require some considerable research.

But for some reason, these thoughts never seem to occur to him about his own government, even though every single one would be just as appropriate.

In the case of America, he has been inculcated with the official organisational chart since birth. There are three branches - legislative, judicial and executive. They exist in a separation of powers, and all are ultimately answerable to the voters, who elect Congress and the President, and thus can eventually appoint all the Supreme Court nominees.

Granted, this is not an absurd description. All these bodies really do exist. At some point, perhaps, this was how governmental decisions in America were actually made.

On the other hand, our hypothetical reader would need to only click on a news website on almost any given day to find events that seem wholly inconsistent with this being the set of people who in practice make decisions as to how government runs.

To take but one example, it was recently announced that Harriet Tubman will replace Andrew Jackson on the $20 bill.

This, of course, raises a number of questions that the average person almost certainly never gets around to asking, but probably should.

Let's start with the basics.

Who, exactly, decided that this would happen?

As a beginning, he has absolutely no idea. Without googling, he couldn't even name the office behind this decision.

Reading through the article, we're told that this was announced by Treasury Secretary Jack Lew. Hands up, nice and high, if you've ever heard that name before.

More to the point, being announced by Jack Lew is not the same as being decided by Jack Lew. If it were just decided by Jack Lew, then we can somehow finagle all this akwardly into the notional chart. Obama appointed Lew, he could fire him (perhaps - who knows) and get someone else in who would put Jackson back on.

But how do you know who else was involved in this decision? Are you sure it was just Lew? There are 86,000 people working at the Treasury. You're certain it was just the top guy, on his own, who came up with the plan? Let's be honest, that seems pretty damn unlikely. If every decision is made singlehandedly from the top, what on earth are those 86,000 people doing each day?

If you fire Lew, it's possible the plan gets reversed. It's also possible that you've just fired the guy who's the spokesman, or the frontman for the operation. He'll just be replaced by someone else, and the show will merrily go on.

But even the 'treasury employees make the decision' model seems a little too neat. Indeed, the Washington Post article lists a number of groups and people that seem wholly alien to how this process is meant to work, including:
-Kari Winter, a professor who studies slavery at the University of Buffalo
-A viral campaign by a group "Women on $20s"
-Ben Bernanke
-A musical about Alexander Hamilton by Lin-Manuel Miranda, who apparently was personally contacted by Lew in the leadup to this decision (when it was decided that Hamilton wasn't getting ditched from the $10)
-Liz Maatz, vice president of government relations for the American Association of University Women

One of two things seems true. Either these people are part of the actual decision-making process. Or the Washington Post is just asking random nobodies to give their opinion

Which do you suppose is more likely? Who do you suppose knows more about how government operates, you or the Washington Post?

Because, dear average interlocutor, let us get to the heart of the matter.

You still believe the notional org chart, because this is all you know. This decision must come from the Secretary of Treasury, which comes from the President, which comes from us, the voters. Ergo, we can reverse this by voting for Trump in November, who certainly wouldn't put up with this nonsense.

Perhaps.

But didn't they tell you this when you voted for George W. Bush twice? Looking back, what exactly did that get you?

You would do better to start by admitting some basic truths.

You have no idea who made this decision.

You have no idea how, or if, it could be reversed.

You have no idea who is actually governing you.

And if you've gotten that far, why are you so sure that voting will fix it?

Subtle Hallmarks of Narcissism

I once had a friend who was at least at the sub-clinical level of narcissism (by my amateur reckoning of the matter). He was very clever, and got easily annoyed with people who thought were stupider than him, or who were wasting his time.

One of the things that manifested itself very strongly was that he was enormously sure of his own opinions. People who disagreed were nearly always morons, and were strongly mocked. This wasn't just on objective beliefs either - matters of taste, however arbitrary, were treated with similar absolutism. The gap between his taste and objective quality, in his mind, was zero. This would even occur when extreme positions were taken on otherwise similar issues. Because he was brilliant, his opinion on these matters must be right. He was also very funny, gregarious when he wanted to be, and and a keen reader of other people. I still count him as a friend, so don't get the wrong idea here.

So how do you tell that someone is narcissistic, rather than just stubborn and opinionated? There is, after all, substantial overlap. Do you fail to change your mind just because you believe things very strongly, or do you fail to change your mind because your belief in your own brilliance means that you simply can't contemplate the possibility of you being wrong?

One trait I observed was that when he did change his mind, he rarely acknowledged it for very long (if at all), and then proceeded to proselytize the new view with all the fervor previously given to the old. The self-image must be preserved at all costs. What you believe isn't strictly important. What's more important is that you're a clever, insightful person who makes good choices.

But that, to my mind, wasn't the key giveaway about narcissism.

The guy was a perfectionist in his job, and thus slow to actually complete projects. At some point, he didn't get promoted, and so was leaving the industry to work elsewhere.

Based on a hunch, I asked him at some point what things he had changed his mind on during his time in the job. I had suspected that it would be nothing at all, but that turned out not to be true.

He told me instead that when he started he had thought that good work would get rewarded, and the competent would rise to the top of the profession. But over time he saw that the senior ranks were just filled by rent-seeking people who had got themselves into positions of authority and expropriated smart, hard-working junior people.

Sensing that I might be on to something, I asked him to clarify something else. Had he learned or changed his mind on anything in a way that had caused him to update negatively about himself?

He paused, and considered the question for a few seconds, quite obviously for the first time. 'No', was his answer, which was the truthful one. He thought he was good, and didn't need to BS with false humility.

And I realised this was the crux of the issue. What he had learned, in other words, was that he was too good for the job he was in.

A narcissist can learn, and a narcissist can change their mind. But they can never change their mind in a way that causes them to update negatively about themselves.

If he had failed in the job, the problem must be the job.

And this also helped explain something else that I suspect is common to narcissists, and possibly to low empathy types who lean towards sociopathic behavior (I truthfully can't always distinguish these two cases cleanly, which shows that I'm not a psychiatrist, just an interested amateur - my friend I put mostly just in the narcissist category). Sophisticated narcissists who are low on empathy can be very good at reading other people, and using this to manipulate them. But every now and again, they'll also make spectacular own-goals in social situations that leave everyone else scratching their heads.

When I tallied up what caused these in the case of my friend, the one thing that he wasn't able to see clearly was what other people thought of him. He thought that everyone loved him, whereas a lot of people didn't. He could read people in general, and he could read what other people thought of themselves, but because his own image of himself was so dominant, it prevented him seeing what others thought of him.

I hereby volunteer as a job interview question 'what is something that you changed your mind on in a way that caused you to update negatively about yourself'. It's one that people won't have a canned answer for, and will tell you whether they're actually able to see their own weaknesses, or whether they lean towards narcissistic self-adulation.

The Other Great Geographic Discontinuity

Discontinuities are interesting things. When small differences in inputs result in large differences in outputs, it can sometimes give hints as to what exactly is causing what.

For instance, Douglas Almond's great paper on the in-utero effects of the Spanish Flu gets you mostly convinced just by a single picture

The ideal case observes a sharp discontinuity in a single input variable and examines the effect on the output. Economists search for these perfectly clean cases like financial traders search for arbitrage. They find them about as often, too.

But sometimes you get a second best instance - a case where a good fraction of the inputs stay smooth and continuous, and yet you observe a discontinuous shift in the output. This suggests that one of the remaining variables is having a large effect.

This is especially true in the case of development. The classic problem, concisely stated, is that goods go together and bads go together. In other words, countries tend to have good governance, good rule of law, a free press, low corruption, etc. or they have none of these things.

Boosters of the polite consensus wisdom occasionally enjoy pointing out the difference in light patterns between North and South Korea.



It is indeed a striking one. Scott Alexander cited it in his Anti-Reactionary FAQ as supporting the proposition that the quasi-monarchy of North Korea seems to result in much worse outcomes than the capitalist social democracy of South Korea.

Fair enough. So it does. Though of course what we're really seeing is the sum of all the differences between the North and South since the Korean War. The main quibble is the extent to which Kim Jong-Un is a good representation of monarchy as a system of government, but I take Alexander's point.

But if you're going to play that game, you have to take the comparisons that are not flattering to your world view, as well as the ones that are.

One such equally stark comparison is between Haiti and the Dominican Republic.





No, they didn't draw the border at some magically discontinuous shift in micro-climate. This is all one island of Hispaniola, split into two parts. It's just that the Haitians deforested their part of the island, leaving the land looking like it was denuded by a plague of locusts. The Dominicans, however, didn't.

And this is the start of a series of differences that are not quite as stark as North and South Korea, but they're pretty darn stark nonetheless. Haiti is supremely screwed, as bad as anywhere in the Third World. We're talking GDP per capita of $661 and life expectancy of 63 screwed. The Dominican Republic, by contrast is at $5442 and 74. Not exactly first world standards, but functional enough that westerners want to go there on holidays. To slightly modify the Hilltop Hoods - like a free trip to Port-Au-Prince, you don't want it.

And there basically is no polite explanation for why this is. The standard banalities about the causes of poverty don't get you very far. If Haiti's problem is that it was colonialized, so was the Dominican Republic. Admittedly the Haitian part was run by the French for more of its history, versus the Dominican Republic being run by the Spanish. But people don't usually clamor to attribute strong economic success to Spanish colonialism. In fact, the Dominican Republic was run as a colony for considerably longer, as recently as 1865 (compared with Haiti, which kicked out the French for the last time in 1804). Indeed, Haiti actually invaded and ran the Dominican Republic from 1821-1844, and got to implement some of its disastrous policies then.

The other sob stories don't get you much further either. Both areas had a lot of slaves. Both were administered by the US during the 20th century. And while the Dominican Republic produced a lot more sugar during the 20th century, this seems better understood as effect rather than just cause, as Haiti produced lots of sugar during the 18th century, and climate-wise could have done so again.

So since the countries were united for most of their history, one must expect that the causes might seem to be differences that were more pronounced after 1844.

First off, Haiti had killed most of its white population in a genocide, and added to its constitution in 1804 a clause that whites could not own property. Another country imposed this recently in the wake of similar genocidal behavior. You might almost conclude that this is a disastrous policy. It was imposed in the Dominican Republic too in 1821 when Haiti took over, but they hadn't gone for the full genocidal answer of killing all the whites. So even though lots of the Spanish left after their stuff was confiscated, enough of them stuck around, and eventually managed to successfully gain independence from Haiti in 1844. The Dominican Republic tended to be mostly governed by its richer and better-educated Spanish elite for much of its history, whereas Haiti mostly was governed by the descendants of slaves (either black or mulatto). Just look at the pictures of some of the presidents of the Dominican Republic. No matter how you cut it or interpret it, the difference is striking.



etc.

Now look at some of the corresponding presidents of Haiti




Of course, a closer examination makes all this a bit murkier. Even after most of the leaders above, both countries were sufficiently dysfunctional that the US chose to invade, in 1915 and 1916. Equally dysfunctional? It's hard to say, since this was the era before great GDP figures. In terms of long-serving leaders during the 20th century, they had different paths. Rafael Trujillo seems to have looked somewhat like Pinochet, brutal but effective. Papa Doc Duvalier seems like a cross between Idi Amin and Robert Mugabe, repulsive in every possible way. It turns out that being a black nationalist intent on driving out the mulatto elite tends to just produce a mass emigration of the educated parts of the populace. We've heard about that one before too. It's not for nothing that I compared him to Mugabe. Maybe this is the main difference, these two men. It's hard to say.

So we get to the end and don't get the neat schadenfreude of Scott Alexander's simple narrative. In the end, we observe a discontinuous outcome, not a discontinuous input, and identification still eludes us. I am not nearly enough of an expert to compile anything like an exhaustive list of the differences between the countries to say for sure what is driving it. And yet, the aerial photographs remain. Something is producing enormously discontinuous outcomes across small geographical differences. And if you dislike the things I've raised, does that not just deepen the puzzle? Admit it, my progressive friend - you don't have a satisfactory explanation for the difference, do you?

By any measure, Haiti has been profoundly misgoverned. The Dominican Republic serves as Banquo's Ghost, reminding us awkwardly that it didn't have to end up this way. It is not a happy tale, and the lessons, if there are any, don't seem to support the standard leftist narratives of why the third world is poor. No wonder you never hear about it.

Actually, that's not quite right.

You do occasionally hear about it, in the form of editorials in lefty western newspapers excoriating the Dominican Republic for its racism in deporting Haitian illegal immigrants, notwithstanding the fact that, by US definitions of race, the Dominican Republic itself is 80% black.

Yep, racism. That's the key to understanding all this, according to our intellectually bankrupt intellectuals. The overwhelmingly black Dominican Republic must be cast in the role of racist oppressor, because that's the only way by which the left can understand Haitian poverty, or indeed any poverty at all.

With such brilliant insights among our elites, I have no doubt that Haiti will soon be returned to the days when it produced leaders like Thomas-Alexandre Dumas and Alexandre Dumas.

I wouldn't hold your breath. Haiti has been collectively holding its breath for 200 years.

"Hamilton" as American Propaganda

I recently saw the musical 'Hamilton', which was an enjoyable depiction of American nostalgia for its own myths. That much isn't new. What's new is that this is being successfully marketed to the current generation of narcissistic millennials. Getting them to take any interest in history beyond their own short life span, let alone past the 20th century, is quite a feat, even if what they end up learning ends up having a healthy dose of nonsense.

As both a foreigner and a reactionary, it's interesting to see the American founding myths in all their peculiar detail. Identifying the nonsense stories other people accept uncritically about their own history is much easier than identifying one's own. The US ones are particularly interesting to me - I have a strong fondness for this country, but I still view it as as an outsider, as a) I came across this stuff much later in life, and b) my summary of the American Revolution in one sentence is "the bad guys won". Incidentally, this would make a great tagline for a future reactionary version of the play, 'Hutchinson: The Musical".

Of course, if you want to get the record set straight, Moldbug is of course the best source. And with a little of the alternative perspective on the matter, the most interesting thing about the play is what gets left out.

The second most neglected perspective in the history of American Revolution is the Loyalists. For the most part, they simply don't exist. "America" was fighting King George. The fact that there were substantial numbers of native-born Americans who were philosophically and practically opposed to the War of Independence gets mostly elided. How many, exactly? Hard to say. I've seen numbers floated around as being 20%, but this doesn't mean that 80% were Patriots, as a large number were on the fence. I'd take all these numbers with a grain of salt.

The musical actually does better than I expected - there's one scene where a Loyalist is giving a speech in opposition to the Congress (unpersuasively, of course) , and he then gets mocked by Hamilton. That they don't present a good case for the opposition is not surprising - that they acknowledge the opposition existed, and was American, was frankly a pleasant surprise.

So the Loyalists, uncharacteristically, weren't the Elephant in the Room being ignored here. What was, then? What is the faction you almost never hear about in the re-telling of the American Revolution?

The answer is simple: British Parliament.

Britain in the musical, like in nearly all popular retellings, is represented by King George III. He is depicted as being in charge of the whole affair, pulling all the strings from across the sea. It's like the whole musical, like the country itself, lives in a bizarre alternative universe where the Cavaliers somehow won the English Civil War. In reality, the issue had been decided twice, first with King Charles being separated from his head, and then in case the message hadn't been received, again with the Glorious Revolution chasing King James II out of England, all the way to France in fact. By the time of the American Revolution, the verdict had been in for over a century - when push came to shove, Parliament was in charge.

But you can see clearly why this very quickly becomes awkward for the standard narrative. The American revolution was about establishing democracy (praise be upon it) for the first time ever! Except that the government being overthrown was in fact democratic, in various different forms, from at least 1215 onwards. Quite a pickle, no?

Aha, the apologists respond, but there was no democratic representation among the Americans. No taxation without representation, and all that. What an injustice! I'll let Mr Hutchinson field this one:

The Assembly of Massachusetts Bay, therefore, was the first that took any publick of the Act, and the first which ever took exception to the right of Parliament to impose Duties or Taxes on the Colonies, whilst they had no representatives in the House of Commons. This they did in a letter to their Agent in the summer of 1764, which they took care to print and publish before it was possible for him to receive it. And in this letter they recommend to him a pamphlet, wrote by one of their [6] members, in which there are proposals for admitting representatives from the Colonies to fit in the House of Commons.

I have this special reason, my Lord, for taking notice of this Act of the Massachusetts Assembly; that though an American representation is thrown out as an expedient which might obviate the objections to Taxes upon the Colonies, yet it was only intended to amuse the authority in England; and as soon as it was known to have its advocates here, it was renounced by the colonies, and even by the Assembly of the Colony which first proposed it, as utterly impracticable. 

In other words:

Massachusetts: No Taxation without Representation!

Britain: Hmm. Would you like some representation then?

Massachusetts: No, absolutely not, it would never work!

Comedy gold.

So if the big injustice that Alexander Hamilton was fighting against wasn't really a lack of democratic representation, what exactly was it?

Beats me. Beats Hutchinson too.

And this is the odd sense that comes after all the great songs are over. It's the same feeling I had years ago watching Michael Moore documentaries. In the moment, the strange web of narrative seems oddly compelling, until you leave the theatre and try to distill it into a sentence. And lo and behold, the main thesis is that Dylan Klebold and Eric Harris shot up a school because Lockheed Martin had a factory somewhere nearby making parts for satellites. Phrased thus, you realise that this is an insane argument, and you can't believe you fell for it in the first place.

That's where I get to on Hamilton. Once you leave the theatre, odd reactionary thoughts come back in. You mean he was a hardworking immigrant who loved his newfound country so much that he... immediately worked to overthrow its government? Hmm, that doesn't sound so good. Wait, no, he was a poor penniless orphan who wanted to rise up the ranks, and so he realised that helping foment a war and rising up the command would be a great way to do this? Wait, that even worse. Much worse, actually.

The final thought, however, that the honest foreigner must admit to himself, is this: I wonder what equivalent stupidity I've believed about my own history?

Truthfully, I don't quite know. But if I figure it out, I'll let you know.

Micro-snapshots of personal agency

One of my minor hobbies is noticing small correlations in how people speak that reveal things about them. Some examples here, here and here.

I was reminded of one from a conversation I overheard in an elevator today:

Girl: I forgot to bring a pen. 

Guy: Oh well, we can go back up and get one. 

Girl: I used to have a nice one that I'd carry with me. 

Guy: For some reason, the crummy pens stick around, while the good pens always disappear.

Girl: Yeah, that's because people always end up taking them.

Which reminded me of something I noticed way back in the third grade.

Like all small children, our pencils would often go missing. And when they did, people immediately fell into one of two narratives

a) I lost it.

b) Someone stole it.

I was always in the first category. I assume that I'm just forgetful and careless, which I am.

But some kids were always certain, without any proof, that the world was full of malicious people out to get them, stealing all their pens and pencils.

And if the girl's conversation is anything to go by, I suspect this difference persists later in life.

I may simply be naive about this, and extrapolating from my own mental state. But I can't quite believe that there's that many pen thieves out there in the offices and classrooms of the world. Who are all these people apparently swiping pens? Even the guy's point, which is the better one, seems more obviously explained by the fact that you only notice when a good pen goes missing, and the crummy pens go missing too, but you didn't pay attention because you didn't care.

The first sign that there isn't a pen conspiracy is that pens seem to go missing at approximately the same rate as individual socks go missing in the washing process. And I don't think anyone actually believes that the underpants gnomes are taking them. Things get dropped randomly, or forgotten, or misplaced. That's just life.

But when these kinds of annoying things happen, do you accept that as just part of the random bad luck of life? Do you blame yourself? Or do you blame a conspiracy of others?

I would wager that people who think pens frequently go missing because they get stolen are less likely to accept responsibility for their own screwups in life. I would wager they these people are probably somewhat less self-aware.

That seems like a strong conclusion to draw. It's only a hunch, presented as such. But it's how I'd bet.

Off such small pieces of information are efficient estimates of personality made.

Given enough enough data about the world, nobody is really a mystery.

For Mormonism

The attitude of non-Mormons to Mormonism usually tells you quite a lot about what else they value.

And the critiques are well-rehearsed.

Militant atheists like to mock Mormonism’s odd beliefs about the universe, amply documented (in otherwise quite fair and sympathetic portrayals) in Southpark and The Book of Mormon. The beliefs themselves, including disappearing golden tablets and the like, are not really much more absurd than many other religions. But they are claimed to have happened more recently, which seems to make an unusually large difference. Partly this makes certain events easier to disprove, but I don’t think that’s really it. I think actually most of the difference in perception is psychological. To the rationalist, it is no more plausible that Jesus turned water into wine two thousand years ago than that I turned water into wine yesterday. To the common person, however, the latter seems to require a larger suspension of disbelief – the rest of the scene is suddenly palpable and gets compared with what we know about the modern world. For some reason, with old religions, part of the brain thinks ‘well, who knows what things were like back then’.

Social Justice types tend to berate Mormons for their socially conservative views. They dislike abortion, they dislike gay marriage, they tend to hold to quite traditional views of gender roles. Add in desired talking points to taste on whatever side you like here and this writes itself. I do note, however, that the volume of the criticism they receive seems better explained by the fact that they’re a soft target in social terms and won’t fight back. After Proposition 8 passed in California, lefties angrily protested against the Mormons (who supported it on average), but not against Blacks and Hispanics who also supported it on average (the same is probably true of Muslims too). Interpret how you will.

Myself, I’ve always been far more struck by something much simpler. Nearly all the Mormons I’ve ever met have been really friendly, nice people. And that matters to me, a lot. We’re talking maybe n=20 or 30 by this point. How many groups of people, in any category, can you honestly say that about?

If I were to choose a religion based purely on the personal qualities and behavior of its average adherent, I’m pretty sure that I’d pick Mormonism.

This hypothetical is less absurd than it sounds. It actually corresponds fairly closely to the thought process that atheist parents might have if they’d just had a child, and saw social value in religion even though they doubted its metaphysical truth. I’ve known people who were in this exact position.

I was in Provo, Utah, a little while ago. It seemed like a movie scene depicting what America was like in the 1950s. Everyone was white. Everyone was clean cut, and friendly, and tastefully dressed. Everyone was polite, and nobody swore when talking. Brigham Young University, near where I was staying, has student policies against long hair and beards. I had both, but nobody I spoke to mentioned it, let alone displayed any hostility on that account.

Apparently everyone gets married quite young. I went skiing at a nearby mountain, and in the line on the chairlift, I stood behind two young men (for some reason, the term boys doesn’t seem appropriate) who couldn’t be more than 23 or so, perhaps younger. One was telling the other about the importance of making sure you got along well with the family of the girl you wanted to marry, given how much time you would be spending with them (although sometimes you love someone who doesn’t fall in that category). He offered the insight, which I thought quite perceptive, that mothers tended to like girlfriends who were somewhat like themselves, if for no other reason than that they feel they understand the girl better.

I cannot imagine such a conversation among 23 year old boys in most parts of this country. To most of them, the whole concept would be literally inconceivable. That I would not have wanted to get married by 23 does not detract at all from the fact that I think society is better off if more people married by 25 and had three or four kids, rather than getting married at 35 (if at all ) and having one or none.

But what I remember most vividly was when I was walking back from a restaurant in Provo. I walked past a young 20-something couple (probably married) who were about to walk into the restaurant. They were approached by a slightly older grizzled white guy with a long beard carrying a duffle bag. The beard guy asked the young man which way the bus station was. The young man told him it was a few blocks away, and gave him directions.

The older man thanked him, and started walking. He had gotten perhaps 10 metres when the young man came running up. ‘Look’, he said, ‘it’s a bit of a walk. Why don’t I just drive you there?’. ‘Are you sure?’ asked the old man. ‘Yeah, it’s no problem at all.’, the young man replied.

Reader, can you imagine this conversation playing out that way in the city or town where you live? In the context of Provo, the whole affair didn’t seem out of place at all.

What that young man believed about the afterlife troubles me not one jot. As Mr Jefferson put it, it does me no injury for my neighbor to say there are twenty gods or no God. It neither picks my pocket nor breaks my leg. But how that man acts to his fellow man is a subject that interests me considerably.

People like that young man are what’s great about America, actually. I would want them as my neighbors. All I know is that Mormonism seems to regularly produce people like that, and this is something that warms my heart. If a metaphysical belief in magic undergarments is the necessary price to pay to make this happen, I would pay it enthusiastically.

Failure

There is an odd camaraderie among those who have failed.

I’ve been finding this out recently (which is the reason for the paucity of recent posts).

I used to be fairly insouciant about the prospect of getting fired. Then I got fired, and I suddenly had a lot more sympathy for people who seemed to be quite upset for a period afterwards. Like so many misfortunes in life, it’s easy to be glib about it until it happens to you. But when it does, you remember it.

Life does indeed go on, and I’m in a good position employment-wise. I initially decided that stoicism was the way forward, and asserted (part aspirationally) that everything was fine. ‘Whine less’ was already the motto of 2016, inspired by Epictetus's 'Discourses'. I stand by that motto, incidentally. But after a few days of hassling around emailing people and getting a good mix of polite but awkward refusals (along with some interest), I finally was a bit down. Now I’m actually getting towards the point I claimed to be at initially.

In the process of emailing work friends about the prospect of getting a job, when I explained the circumstances of my departure I got a surprising number of quite heartfelt responses. When I went through the list of who wrote back like this, I realised that a lot of them had gone through the same thing at one point. ‘I know how it feels’, one wrote. He wasn’t lying.

The last time I remember this happening was years ago when I was about 20, and working at my Dad’s office. There was an early 30’s guy there whom I got along with well, and looked up to in the way of young men who engage on somewhat jovial mockery and discussion. On a Saturday afternoon, when I was leaving the office, I told him that I was off to break up with my girlfriend. I expected him to make a joke, or some sort of bonhomie about the prospective fun of being single again. But his response was nothing of the sort. ‘That sucks man, I’m really sorry’, was his reply. Having not had a serious breakup before then, I found it a little unexpected, but didn’t think too much of it. 3 hours of break-up conversation later, I understood the kindness of his response a lot more.

The whole recent experience has made me want to be kinder to the people around me.

I think that’s a good addition to the 2016 motto as well, actually.

Your Opinion Doesn't Matter

In the psychology of the west in the 21st century, two characteristics predominate.

First, this is the age of democracy.

Second, this is the age of narcissism.

And the coexistence of both does not seem to be a coincidence.

As far as I can tell, the actual value of holding regular elections is to flatter the conceit of the individual voters so that they feel important and don't revolt. Look at these powerful people, groveling to you, promising you things! They're in a VFW Hall somewhere in Ohio, eating terrible rubber chicken, nodding and pretending to care about your concerns. Some day they'll be president, but right now they're kissing your @$$. Admittedly, all the voting you did in the past somehow didn't manage to solve your problems, but surely this time will be different.

The slogan for all this nonsense is 'your opinion matters'. This comes in minor variants like 'your voice matters' or 'your vote matters', but the 'opinion' version is the favored generic variant. This is because 'opinion' requires the least possible effort on your part - you don't have to yell, like with a voice, or heaven forbid actually do something like waste an hour on some Tuesday in November. Your thoughts alone are so valuable that the powerful cannot wait to turn to you in order to hear them.

This is an obvious lie, easily identified as such.

The first clue is this exact phrase is frequently used by spam marketers trying to get you to click on online polls. It's almost like they've figured out that people are susceptible to empty flattery about the importance of their political opinions, and use this to infect their computers with malware. Hey, if they'll turn up when the government pulls this nonsense, why not us too? You can hardly blame them for thinking this, not least because they tend to be right.

But more importantly, the idea that your opinion matters violates the poker rule of relative naivete. The old advice in poker was that at every table, there is a mark - a rube or fool who doesn't know how to play the game, and that people will target to make money off. Play a few hands at a table. If after that time you haven't figured out who the mark is, the mark is you, and you should probably leave.

So in the game of politics, do you know who the mark is? Do you know who is being conned in the political process? Doubt not that professional politicians know who they think is being conned. The rich donors know who they think is being conned. The professional political advisers and lobbyists know who they think is being conned. Admittedly, they may not agree with respect to the position of each other - like in any poker game, overconfidence is rife, and most people think they're the best player at the table.

But they also all agree that one of the people clearly being conned is you, John Q. Citizen voter and taxpayer. And be honest - you don't have a clear idea of who is being conned, do you Citizen? Should this concern you? I feel it should.

I do like asking ardent demotists if their voice matters. They usually laugh, knowing the inherent ridiculousness of the question, but are reluctant to explicitly disclaim it.

Not only does your voice not matter individually, your voices barely even matter collectively. The permanent establishment of the civil service, courts, media and universities will continue on their merry way regardless. This is why you can elect Obama and find out, puzzlingly, that eight years later Guantanamo is still open and Americans are still dying in Iraq and Afghanistan. And this is in foreign policy, where the president apparently has the most freedom of action.

But in case the appeal to the importance of your ideas fails, there is a second plank of appeal to the importance of voting - that it is your civic duty. And people who may scorn the first appeal nonetheless seem susceptible to the second. To wit, voting shows how noble and civic-minded you are. Do you love your society? Then waste an hour of your life pressing a button for whichever of the two fools on stage you happen to detest less. Surely you are too responsible to not vote, citizen?

It's narcissism all the way down.

When I started reading more reactionary literature and being convinced by the arguments therein, it was oddly relieving to find out that my opinion does not matter. One no longer needs to feel personally involved or aggrieved by any of the nonsense of the political process. I feel no need to waste any more hours of this short and rapidly passing life worrying about exactly what Donald Trump did or didn't say in the most recent news cycle.

That's for the marks who feel that their vote matters.

This may sound like a call to passivism, that nothing at all matters, but it is not.

Your actions may very well matter. This is particularly true if enough of you act together.

But pressing the button for Kang or Kodos every four years seems unlikely to be one such action.

On the lessons of fall of Rome

To anyone of a vaguely reactionary persuasion, the fall of Rome is a melancholy and tantalising story. The inescapable conclusion, no matter how exactly you explain the fall, is that progress is neither inevitable nor irreversible. Civilisation is fragile, and can be destroyed by a sequence of wrong decisions. 

This fact used to be widely appreciated - empires and civilisations were considered to be subject to cycles of rise, power, decay and fall. You can see this, for instance, in Thomas Cole's series of paintings, "The Course of Empire", painted between 1833-1836.


The Savage State


The Arcadian or Pastoral State


The Consummation of Empire


Destruction


Desolation

Of course, we live in an age where Whig history is the only history there is. Americans seem to contemplate the possible end of the glorious American experiment the way most people contemplate death. That is to say, not very often. And when they do, usually only when pressed on the issue, they'll acknowledge that it probably will happen eventually, but then they act as if it is only likely to occur in a very long time.

Then again, that's what the Romans thought too.

Which, to the conservative, makes the matter more alarming. Thinking you're not about to collapse and be overrun is a relatively weak indicator that you aren't, in fact, about to collapse and be overrun.

And in some sense, the modern American position is less forgivable than the Roman one. Today, we have the Romans as an example to consider. When Rome fell, there had not been any comparably long-lived Empire that had ever gotten that far, let alone one that had and had subsequently collapsed.

And while the inevitability of decay is true, the timeline iteslf is not. The other view is the less fatalistic one - try to figure out what exactly Rome did wrong, and try to make sure the same mistake isn't made again, to at least cheat the reaper a little longer. Such as not letting in barbarian hordes in numbers so large that they can sack your capital.

This is true, and a very useful exercise. But it's necessarily quite speculative. Why, exactly, did Rome let in the Goths, and could that have been changed? Harder to say. Would it have fallen anyway at some subsequent point not too long after? Even harder to say.

But there is one lesson that does seem useful, if understudied.

As I've written about before, the major blind spot of many Europeans (pace the Greeks) is that they equate the end of Rome with the end of the Roman Empire. But this was only the end of the Western Roman Empire. The Eastern Roman Empire, in Byzantium, continued on for roughly another thousand years. It may not have advanced to the same heights as the former, but you'd much rather be living there in 483AD than in Rome.

Which seems to suggest that if the collapse is coming, partition and separation may offer a better chance for partial survival.

The attitude of the West on these matters begins to resemble the process that Paul Fussell described pithily, if depressingly, about World War I:

This "slowly dawning and dreadful realisation" usually occurs as a result of two stages of rationalization and one of accurate perception:

1. It can't happen to me. I am too clever / agile / well-trained / good-looking / beloved / tightly laced / etc.

This persuasion gradually erodes into:

2. It can happen to me, and I'd better be more careful. I can avoid the danger by keeping extra alert at all times / watching more prudently the way I take cover or dig in or expose my position by firing my weapon / etc.

This conviction attenuates in turn to the perception that death and injury are matters more of bad luck than lack of skill, making inevitable the third stage of awareness:

3. It is going to happen to me, and only my not being there is going to prevent it.

An individual may pack up and move, of course, but a country cannot.

A region can, however, choose to not be part of the same dysfunctional polity that is about to collapse.

Easier said than done, unfortunately. Rome had the virtue of having a Diocletian. America, however, does not.

The Eternal Present Tense of the Liberal Mind

Out of all the critiques that Neoreaction makes of modernity, one of the most compelling is the sheer lack of historical knowledge (let alone perspective) that most people today have. The modern world is incredibly left-wing over any perspective longer than about 50 years, but how many people even know that? Liberalism is an ideology that exists only in the eternal twilight of the present tense. The past, to the extent that it exists at all, is merely a collection of evil ignorant attitudes and actions occasionally brought up in order to emphasise the righteousness of modern attitudes (that is to say, the righteousness of our liberal interlocutor).

But as I pointed out here in the context of colonialism, the actual level of knowledge about these matters is usually sparse to the point of being nugatory. Figures in the past are never actual people who might have had serious reasons for their views, no matter how far outside today's Overton Window they sit. There is no examination of why they thought the things they did, other than that they were deluded or evil or both. And because the signalling spiral must continue, even yesterday's liberal heroes are currently at risk of being thrown under the bus for being insufficiently progressive. Witness, for instance, the portrayal of LBJ in the movie 'Selma' about Martin Luther King.

For the left, this process of only focusing on the present views and preoccupations has the useful effect (for liberalism) of keeping people from noticing just how recent many of these ideas are. Despite being ardent cultural relativists in theory, the left's devotion to the absolute humorless eradication of the world's -isms is fanatical. These are deadly serious issues, you understand, and it would be inconvenient to note that it's only very recently that anybody even bothered to notice them.

Don't believe me? Consider the following.

Listen to the song 'Bourgeois Blues'. It was written in 1937 by Lead Belly, aka Huddie William Ledbetter, an American Folk Singer. It chronicles some of the treatment that Lead Belly received when on a trip to Washington DC. It's a great song - personally I like the Pete Seeger version, but I've given you the original. Pay attention to the story, and how he chooses to describe it.

Listen here people, listen to me 
Don't try to buy no home down in Washington DC 
Cause it's a Bourgeois Town, 
Ooh, it's a Bourgeois Town. 
I got the Bourgeois Blues, 
I'm gonna spread the news all around.

Me and my sweet wife Miss Martha,
We run all over that town 
Everywhere we go the people would turn us down 
Lord, in a bourgeois town 
Ooh, it's a bourgeois town. 
I got the bourgeois blues, 
I'm gonna spread the news all around. 

Some white folks in Washington, 
They know just how 
Call a colored man a nigger just to see him bow. 
Lord, in a bourgeois town. 
It's a bourgeois town. 
I got the bourgeois blues, 
I'm gonna spread the news all around. 

Me and my sweet wife Miss Martha, 
We were standing upstairs 
I heard a white man say we don't want no Negroes up there, 
He was a bourgeois man 
Living in a bourgeois town. 
I got the bourgeois blues, 
I'm gonna spread the news all around.

The home of the brave, 
The land of the free, 
I don't want to be mistreated by no bourgeoisie, 
In a bourgeois town, 
Lord, it's a bourgeois town. 
I got the bourgeois blues, 
I'm gonna spread the news all around.

Okay, got it?

So what strikes you about the song? Not about the story - that's obvious. What seems out of place in how Lead Belly describes the mistreatment he receives?

I'll give you a hint - what is the one word that you would use to describe the actions of the people here?

It's obvious - the word is 'racist'.

Now go back and look at the lyrics again - the word 'racism' is (along with its derivations) conspicuously absent. It's possible that this is a rhetorical or lyrical choice, and maybe he just decided not to use it. But the rest of the song doesn't feel that way. Consider again - you have a white man who calls at a married black couple 'we don't want no Negroes up there' (in other versions of the song, the man uses the word 'nigger' instead, suggesting extra malice in the nature of the demand). Now, faced with such a man, think of the list of words you might use to describe him, starting with racist, then bigoted, then ignorant, then whatever synonyms you want. Would you have thought of him as a 'bourgeois man'? Would this have even made top 20? It's inconceivable.

So what the hell is going on here?

The first point, which is the more obvious one, is that as late as 1937, the word 'racist' simply did not exist in the popular lexicon. This mirrors the history of the word racism - some attribute the first use to Leon Trotsky in 1930, and the first use in English to Lawrence Dennis in 1936. What seems hard to refute is that in 1937, it had not filtered down to Lead Belly when he was describing a situation where it pretty clearly applied.

And as George Orwell noticed, language tends to shape thoughts. It's not only that the word didn't exist. The concept simply didn't exist as an organising principle with which to critique various actions and views. Lead Belly knows what he doesn't like about the behaviour, but doesn't have a clear way of describing it. The most deathly important social injustice in the modern world, the worst sin and stain on character possible in today's society, the most important concept ever, dates all the way back to... some time after 1937. It's not only that people tolerated racism. It's that people didn't even have a clear concept of racism as a thing to be condemned.

There are many fascinating aspects to this worth pondering. One might wonder how it was that millennia of humans managed to live and die without even noticing the most important crime one can ever commit. Seems odd, no? If modernity is right, and all of history is wrong, racism is the worst injustice one can commit, and is evident in everything from requiring voter ID to banks failing to issue home mortgages at the same rate for all neighbourhoods. So how come nobody even noticed until the middle of the 20th Century? Don't hold your breath waiting for an answer from today's progressives.

But the song actually does give us a partial answer. It's not just that Lead Belly doesn't describe the behavior as racist, it's that he describes it as 'bourgeois'. Google tells me this means 'of or characteristic of the middle class, typically with reference to its perceived materialistic values or conventional attitudes'.

What's going on, in other words, is that in 1937 the left was preoccupied with class, not race. 'Bourgeois' was an all-purpose slur for behaviour that the left disapproved of. Hence, it gets slung around in the same way when other words might be more appropriate.

These days, class is on wane as an organising principle of critique. The Cultural Marxists have displaced the Economic Marxists as the leaders of the left, and in the process 'materialism' and 'capitalism' have been shunted to the back of the '-ism' bus, elbowed out by racism, sexism, homophobia, Islamophobia etc etc.

In 1937, the worst possible sin you could commit was to be a capitalist who was exploiting the poor. But times change. While being a capitalist exploiting the poor is still not ideal, in 2015 it pales into utter insignificance next to the currently unthinkable prospect of a hotel proprietor casually telling someone 'we don't want no Negros up there'.

Of course, if you think about this too long, you might begin to wonder whether in 2087, racism will have lost its place as the Worst Possible Thing Ever, and something else that today we don't even have a word for will have taken its place. This may also cause you to second guess whether the current emphasis is in fact misplaced.

Better to not think too much about it, you might end up too far down the rabbit hole, reading Moldbug and scorning modernity.

Brazil as the Racial Bizarro-verse

Gary Brecher once pointed out, in a podcast I think, that American exceptionalism dominates the American mindset. As he noted, this actually takes two forms. The more remarked-on form is from the right, whereby America is the last, best hope for everything good in the world. But there’s a left-wing version too – that America is the source of everything bad, and that the world would all be right except for the uniquely bad influence and history of America.

And while both are silly, the latter version seems somehow less studied. Which is a pity, because a broader view about how America compares with the rest of the world is actually quite illuminating.

The largest of the American Original Sins is of course racism. America is, so the story goes, not only the most racist country on the planet, but uniquely cursed because of its long legacy of slavery. This has forever poisoned the relations between the races, leading to the never-ending garment-rending and hysteria that characterises any discussion of race in the US.

The USA had slavery, it’s true. Over 300,000 slaves were imported from Africa. This creates a difficult legacy, it’s true. But just how uniquely difficult is the US experience with slavery? How much, in other words, could this actually explain?

Well, fortunately history has furnished us with another much larger slave power in the Americas. Brazil over its history had over 4.9 million slaves arrive. If the USA's slavery history is responsible for the stupidity of modern day race relations, surely Brazil must be many times worse!

In fact, race relations in Brazil are much, much better. Brazil actually manages to achieve what most of US claims to want to achieve – a mixed race country that is largely harmonious in terms of race relations. When you walk around here, it's striking how many genuine mixed-race groups of people there are - not only couples, but larger groups of men chatting away, covering all complexions from white to olivey to Hispanic-looking to black. In America, the vast majority of genuinely mixed race groupings you see are in commercials. When was the last time you saw a black guy, a Hispanic guy and white guy all hanging out together in real life?

And if you ask Brazilians, they'll mostly tell you that they don't have a race problem. Does this mean that every outcome is distributed identically across every possible combination of ancestry? No, but then again, neither is geography. The north is poor and black, the south richer and whiter, but with plenty of variation in both cases. More importantly, if “identical distributions” is your definition of 'no racism', I'll thank you for providing me a single socioeconomic variable of any importance that's so distributed, in any country on earth, in any period in history. No hurry, I'll wait for you to come back.

One of the things that's hardest to explain to Americans is just how stifling is the atmosphere of debate about race in the US, poisoning honest discussion of such a large range of topics and fueling antagonism and resentment at every turn. I suspect it's hard for Americans to see just how striking this phenomenon is, because it's just what you've grown up with. It's only us foreigners that tend to notice.

If there's one thing that Brazil teaches, it's that you cannot simply attribute this to slavery. Race paranoia, notwithstanding the observations at the start of this essay, actually is a very American pathology. It is also one that it is eagerly exporting to the rest of the world, with wholly deleterious consequences.

So if it's not slavery, what is it?

Well, here's one thought. Maybe the way to get people less pissed off about race is, ooh I dunno, stop encouraging them through the media, schools, and universities to view every single issue through the prism of a race war.

Maybe the solution to hypersensitivity is not actually encouraging ever more sensitivity. Maybe the solution is for everybody to chill the hell out. At the moment, the fact that people have resentments along racial lines is consider the most important reason for permanently fretting over racism. But what if this is actually the source of the problem? What if the permanent hypersensitivity is actually a significant source of the antagonism in the first place?

Perhaps this sounds too simplistic. Perhaps it is. There is a certain ‘don’t think of an elephant’ aspect to it, I’ll admit. But at a minimum, perhaps dial down the permanent ELEPHANT WATCH RED ALERT ELEPHANTS ON THE NEWS 24/7 if you want people to do so.

Or if you dislike my answer, come down here and figure out your explanation of why things seem to work so much better. Because ‘America has a uniquely racist past’ simply won’t cut it.

At the Rescue Mission

Poverty, to an economist, is mostly an abstract matter. Just like GDP is a number and unemployment is a number, the poverty rate is also mostly thought of as a number. It’s a very important number, and one that we work hard to try to reduce. But the essential nature of the task is mostly thought of as a technical problem to be solved, like a constrained optimisation – consider the variable to be minimised and the policy variables that can be altered to achieve this, check that the Lagrange multipliers on all the constraints are satisfied, check the second order condition to make sure you haven’t found a maximum instead of a minimum etc. Out comes optimal policy.

But real poverty, when you see it up close and in the flesh, is raw and visceral.  It is shocking, in fact. This may sound melodramatic, but bear with me. Like anyone living in a large US city, I see poverty mostly in the form of the shambling figures of the homeless walking around downtown areas. But they tend to feature as the Banquo’s Ghost at the fringes of whatever otherwise pleasant social function I’m attending, or the nice area of town I’m walking around in. They are, in other words, an aberration – the puzzling exceptions left behind in the sea of prosperity.

No, to actually see what abject indigence looks like at the coal face, one must venture to where poverty is not the exception, but the norm. I was at a homeless rescue mission the other day, with an out of town friend of mine. His family was dropping off a large order of dinner for Thanksgiving and helping out in the serving. If I had not been spending the day with him, I would never in a million years have headed there.

They say that one of the important things that you are taught in the Marines is to overcome one’s instinct to run away from the sound of gunfire. Everyone has this instinct, but to an army, it is disastrous. A soldier must run towards the gunfire. In a less dramatic way, driving into the really poor part of town is like that. The onset of tent cities and strung out hoboes on the street is mostly experienced in life as a sensation that a) one has wandered into the wrong part of town, b) one should change routes, if possible, and c) a back of the mind feeling of hoping one’s car does not break down. Driving to the mission, in this metaphor, is the equivalent of having left the greenzone altogether and heading for the Fallujah of poverty. Of course, everyone else in the car has done this before and is relatively at ease – it’s only me seeing it for the first time.

Both in the car, and when I arrived inside the mission, we are the exception. Dysfunction is the norm, and the norm is all around us. To someone who generally associates homelessness with either drug use and/or mental illness, it is initially quite disconcerting to experience the sensation of being vastly outnumbered by the homeless. The instinct for self-preservation battles with the obvious cowardice and shame that such feelings generate. This is not a hostile army, and everyone here ought to be an object of pity. But the law of large numbers holds nonetheless – how many unstable people can one have in a room before the left tail of outcomes becomes dangerous? And yet here is this 5’4 blonde lady smiling and greeting me, seemingly unconcerned.

And, of course, it isn’t actually that bad, just unfamiliar. When we ascend the levels to meet people who have successfully gone through the programs to get their lives back on track, they seem relatively normal. We meet a man who is studying for a computer degree, and tells us he’s now been clean for 15 months. It’s really quite heartening. A lot of the people at the mission will only be in and out of the ‘emergency food’ section, where assistance is given without any questions. But for the ones that are trying to get their life back on track, I’m very glad to see that there are programs ready to help them.

The other fact that becomes very apparent is the reason the whole enterprise exists, evident from the signs on the walls and the people helping out at the center. The rescue mission is not staffed by economists or government social workers. It is staffed by Christian volunteers, as the various posters on the wall and the Chaplain in charge indicate. I am not a Christian, but I am glad they are there, toiling away at this kind of thankless task. If one ever needed a reminder that Christianity is not the problem with America, this was one. It motivates genuine selfless charity in a way that the default of consumerist secular humanism simply does not achieve. Of course, even the selfless often have personal reasons for being there. My friend’s brother in law ended up becoming very involved in the mission and donating a lot of money there after his own brother, who had been a drug addict, went through their program. The homeless live at the outskirts of society, and are easy to just look past, unless you have a particular reason to seek them out.

I drive back in the car, having mostly just been a silent observer during my time there. Going from the relative function of the program graduates back to the chaos of the tent cities outside, blending back into relieving normal society, reinforces the scope of the problem. How did all this happen? And was it always thus? George Orwell wrote of the tramps in ‘Down and Out in Paris and London’, and Dickens wrote of it even earlier. From talking with my friend’s sister, my preconception that a lot of the problem was mental illness is apparently overstated – a lot more of it, according to her, is just substance abuse. Some of the people who seem crazy actually just need to dry out, and they’re hallucinating at the moment.

It is tempting to see tent cities seem like an enormous failure of governance, and there is definitely a decent amount of truth to this. Whether the failure is a lack of money and support or a lack of police presence is a matter upon which people will disagree wildly, but the unsatisfactory nature of the status quo is hard to ignore.

Unfortunately, the narcissism of our age mistakes the feeling that ‘something ought to be done’ for the belief that as long as we vote for the right person (whoever that is) the problem will resolve itself. But does anyone really know how you deal with whatever it is that makes people start taking meth? Especially when they took it up even after seeing other meth addicts losing their teeth and turning into barely living skeletons (and then non-living corpses).

The lazy but satisfying response is outrage – substitute the feeling of pity and disgust for one of anger at some political force that is deemed to be responsible. Insufficient money. Lack of institutionalization of the mentally ill. Greater funding for substance abuse treatment. Stronger police action against vagrancy. Pick your chosen policy. They all make great soundbites and feel satisfying, but when you drive past the tent cities outside the rescue mission (and not for lack of space at the missions, either), it becomes apparent that there are a large number of real people in front of you who cannot find a reason in their life to stop taking self-destructive quantities of mind-altering substances, and this is actually an extraordinarily difficult problem to solve.

After all the policies are proposed, and some are even tried, few people today will tell you what was once considered received wisdom – the poor you will always have with you. When society as a whole was poorer, it used to be easier to convince ourselves that economic growth would take care of the problem. But it turns out the Biblical observation was wiser than we knew. If only the problem were just money. Money, we have now have substantial amounts of. What we do not have is a way to give purpose to the lives of those at the bottom of society. And if we have gotten any closer to solving the problem in the past few decades of growth, it is hard to see it.

The Financier's Roar

Finance is not generally considered a stirring subject. Interesting, maybe. Remunerative, certainly. Complicated, definitely (and don't believe anyone who says otherwise). But stirring?

Well, not often, but occasionally.

2001 was not a great year for Berkshire Hathaway. The firm had experienced its first decline in book value per share (their chosen measure of performance) in their history. This was coming off the back of a very poor 1999 result where their growth in book value per share underperformed the S&P 500 by 20.5%. In 2001, at least everyone else did poorly too, but to a firm that prided itself on consistent results, this was a tough pill to swallow.

The proximate cause of this problem was that they run a huge reinsurance business, and September 11th caused them to have to pay out a ton. And Warren Buffet, in his 2001 letter to shareholders, had the job of fronting up to investors about what was going on.

He began by explaining what he called the three principles of underwriting, which he acknowledged that they had failed to live up to:

1. They accept only those risks that they are able to properly evaluate (staying within their circle of competence) and that, after they have evaluated all relevant factors including remote loss scenarios, carry the expectancy of profit. These insurers ignore market-share considerations and are sanguine about losing business to competitors that are offering foolish prices or policy conditions.

2. They limit the business they accept in a manner that guarantees they will suffer no aggregation of losses from a single event or from related events that will threaten their solvency. They ceaselessly search for possible correlation among seemingly-unrelated risks.

3. They avoid business involving moral risk: No matter what the rate, trying to write good contracts with bad people doesn’t work. While most policyholders and clients are honorable and ethical, doing business with the few exceptions is usually expensive, sometimes extraordinarily so.

The third one I'm less certain of than the first two. But they all fit a pattern - pick carefully which risks you want to take on. Make sure you can survive them, and pick the ones likely to be profitable.

But having done that, how should one approach the vicissitudes of fortune? How should one weather the storm?

Buffet's answer is perhaps my favourite line in finance. I call it 'The Financier's Roar'.

At Berkshire, we retain our risks and depend on no one.

Just so.

Risk and return are not just academic constructs, but the very stuff on which the economic world is built. The point is not to eliminate risks. If one wants to do that, buy treasury bills, accept a zero rate of return, and don't ever leave your house. You will earn zero, and you will never succeed.

The vast majority of good plans carry a risk of failure. The reason they do is that arbitrage is rare. Sometimes, life hands you a risk-free profit opportunity, but, like the proverbial $20 bill on the sidewalk, they don't stick around for long. And in the space of risky ventures, a similar mechanism holds. If an opportunity has a really high return and very low risk and everyone sees this, mostly the price will get bid up until the expected return has gone back down.

Mostly. But not always. Arbitrage may be very rare, but undervalued assets are more common. Figuring out what they are is the substantive part of the Buffet risk management. Identify things that are good risks, and buying enough that you can take on and survive.

The second part, the Financier's Roar, is the call to courageous decisions. Having selected the right risks to take on, retain them. Be willing to eat the possibility of loss and failure, and don't try to hedge everything out. Have the confidence of your own calculations to hold the portfolio of life's payoffs that you think will work out the best overall. As I have noted before, one does not eat the expectation, but the realisation. No matter how well you calculate, sometimes you will lose. That's life. But at least you won't lose in a stupid manner. Courage, when properly applied, is taking the right risks, though risks they be nonetheless.

The second benefit is the one that's easy to overlook, but is important. When one retains one's risks, one is an island. The universe may deliver success or failure, but the only thing that matters is one's calculations and the roll of the dice. By contrast, the more you hedge out risks by trading with others, the more you rely on the success or failure of others. If you're relying on a counterparty to pay up when the porridge hits the propeller, your risk management now depends on their risk management. Just ask the people who bought credit protection from Lehman Brothers.

Retaining risks leads to self-reliance. Retaining the right risks leads to success or failure with the only tools one has against the cold indifference of fate - one's own wits.

Retain your risks, and depend on no one.

No Exit, Part 2: Coups

Last time I tackled the question of exit, we talked about the feasibility of secession, and how I thought that scenario would play out (short version: not likely, because the government will use the courts to pre-emptively squelch any peaceful way of achieving it).

But the other exit possibility is to take over some other crummy country via a coup. How might that play out?

Let's ignore the question of the logistics of the coup itself. This is hard to judge - on the one hand, there are lots of possible basket case countries out there to target. But the leaders of those countries, even if their countries are ramshackle, will likely have a lot more manpower on the ground. Taking over from the outside is likely to be hard. Just ask Sir Mark Thatcher.

The more interesting question would be what happens afterwards if you actually succeed, and set up your reactionary state in some or other Godforsaken part of earth? Could such a state survive? Would the US let it?

Like in the case of secession, it's hard to tell, because there's no direct example to compare.  One has to go off various different responses to similar cases.

Given that one is presumably limited to taking over a basket case country, the first point to note, which may seem trivial, is that the political fallout from the US would probably vary greatly with the ethnicity of the host country.

Put simply, the west would simply not stand for a white unelected leader of an African country. Just ask Ian Smith or P W Botha. The West treated Rhodesia and Apartheid South Africa with a hateful vitriol that they never quite mustered for the Soviets, and those places were still partly democratic. Unless you were able to immediately turn yourself into North Korea, mostly self-sufficient and able to threaten to bring the crazy,  you could expect the full fury of the US to destroy you as soon as they could.

Unelected whites ruling over blacks simply sets off too many slavery alarm bells. Of course, if pressed nobody would say that's it's actually morally preferable for unelected whites to rule over Hispanics, South-East Asians, or Pacific Islanders. But the modern world being what it is, I somehow doubt that a coup in Fiji or Honduras would trigger quite the same visceral response.

Even better, pick somewhere dysfunctional that's  full of vaguely white people (Belarus? Turkmenistan?), or have a person of the same skin color (and ideally the same nationality as well) to lead the coup. That would help neutralise the imperialism/racism angle. The world would still be pissed, but at least you'd take away their biggest propaganda card against you.

Would that be sufficient? Hard to say, but probably not. The State Department may not actually assert control over the entire planet, but they sure as hell don't like it when you do things without consulting them first.

My basis for thinking this is the response they had to a grimly hilarious story from last December where a bunch of Ghanaian-born US citizens decided to launch a coup against the dictator of that country.

Seriously, check out this great long report on it from the Guardian. It's amazing stuff. The whole thing is like something from a Steve Sailer content generator - invade the world, invite the world. There's even a bizarre government-funded diversity angle, as one of the main financial backers of the coup made his money through getting government grants to build "affordable housing" projects in mostly white areas of Texas.

Meanwhile, the main focus of the article is about a man called Njaga Jagne, about whom the Guardian can speak more freely since he died in the coup attempt. He was a US National Guard member who served in Iraq. Iraq, as you'll no doubt remember in between the never-ending reports about ISIS, was the US's way of bringing the glories of multiparty democracy to a ramshackle dictatorship in the Middle East, as part of the crucial 'Bombing Muslims for Freedom' campaign.

Well, unfortunately Njaga imbibed the democracy Kool-Aid a little more deeply than the powers that be wanted him to. Hey, if it's such a good thing to turn dictatorships into democracies, surely the US government would be happy if I did this myself, right? After all, they've already employed me to do this once.

Yeah, it turns out, not so much.

The first problem, it seems, was plotting the coup on Facebook. Good thinking! Nobody else could infiltrate that. Things went as well as you might expect when they turned up

He and Njaga went with the team that approached the front door, while Faal went with the team taking the rear. The plan was for Njaga to fire his M4 rifle once in the air as a signal to their Gambian collaborators. But when the shot went up, the guards out front instead opened fire on him.

Afterwards, the survivors came to the bitter conclusion that they had been betrayed. But by whom? They blamed Sanneh’s moles. Some also wondered why Faal had turned himself in so quickly. But Faal told me that when he was flown back to the US and told his story to FBI agents, they indicated they had been aware of the plot all along. He claims that without prompting, they held up a picture of Njie, and asked: “Is this Dave?”

In May, the Washington Post reported that the FBI had visited Sanneh at his home in Maryland prior to his departure, asking why he had purchased a plane ticket to Dakar. The agency alerted the State Department, the Post reported, which in turn “secretly tipped off” an unnamed west African country – generally presumed to be Senegal – in the hope that it would intercept Sanneh. The coup plotters suspect that the information instead ended up in Jammeh’s [the dictator's] hands. 

Huh! It's almost like the State Department doesn't like people engaging in freelance foreign policy.

Also, how dumb do you have to be that when you're being asked questions by the FBI about the purpose of your coup-related plane trip, you aren't able to piece together the possibility that something has gone wrong in the op-sec process?

Amid the frantic uncertainty, Sigga [Njaga's sister] called the US embassy in Banjul. “They were more focused on saying, ‘If your brother is involved, it was a crime,’” she said. 

You don't say.

Talk about some stone cold diplomacy - the dead guy's sister is on the phone, and you're focused on imparting the message that the Federal Government plans to indict his corpse.

It all seems quite reminiscent of the police response to the Texas secessionists - woe be to the people that threaten the hegemony of the US Federal Government.

When the US says that it's important that all the countries of the world become democratic, what they mean is that it's important that the US make them democratic, on the US's terms.

This is very different from, say, the Russians organising a referendum for the people of Donetsk in the Ukraine to vote if they'd like to become part of Russia. THAT kind of democracy is far more problematic.

And some random pissant US National Guardsman deciding to create democracy himself in Gambia? That, my friend, simply will not fly.

I quite enjoyed the Moldbug quip that:

[T]he phrase "international community" could be profitably replaced, in all contexts, by "State Department," without any change in meaning.

I once told this line to a friend of mine who actually works for State. He laughed and said it was mostly true, in the inimitable way of diplomats in private circles who are glad to have an excuse to partially acknowledge from the mouths of others things that it would be imprudent for them to note themselves.

The international community takes coups very seriously, citizen. So if you're going to plan one, you need to think not just about how to take over, but how to resist the full might of the US government once you do. There are no partially sovereign nations. Either you have the ability to tell the US government to go screw themselves, or you don't. It would serve you well beforehand to figure out which of the two categories you fall into.

It's the US Government's world. We just live in it.

Portrait of a Nation

I love National Portrait Galleries (plural). I had previously written about the British version here - it's a wonderful example of the impressiveness of Victorian England, as personified in its great and famous men.

So it was with considerable interest that I finally went to the US National Portrait Gallery recently, when I was in DC.

My hunch going in was that the 19th century would be mostly a wasteland, but the 20th would be fascinating. National Portrait Galleries chart the fortunes of nations, and America's century of greatness was the 20th, in much the same way that Britain's century of greatness (or at least its last century of greatness) was the 19th. My presumption was that most of the famous 19th Century Americans are figures from the Civil War, which is fine as far as it goes, but ideally you'd like to see something of greater civilisational achievement. On the other hand, America dominated the world so thoroughly in the 20th that the category of great men in general over that period is largely a catalogue of famous Americans.

Thus were my predictions going in. As it turns out, both parts were wrong.

Firstly, the 19th Century was actually a lot more interesting than I thought it would be. I was expecting to see only Twain and Melville - the latter was oddly missing, but included were also Poe, and Sir Walter Scott, and others I'd forgotten - Longfellow, Hawthorne, Emerson. The late 19th century industrialists (Carnegie, Rockefeller) were interesting, as were some of the inventors I didn't know, like Samuel Morse and Isaac Singer. In other words, the 19th century, especially the later part, had more going on than I'd given it credit for.

But you could already see creeping in the sheer embarrassment of the curators at the whiteness and maleness of the rooms, strengthened by the fact that the 18th and 19th century parts were clearly the sections everyone had come to see. In the middle of the 19th century section, there was an oddly placed entire room dedicated to a Hispanic woman who was a labor activist in the 1960s. It's the same urge that saw them include in the 'Presidents of the US' section portraits (small, admittedly) of noted non-presidents Eleanor Roosevelt and Martha Washington.

How hard it must be to viscerally hate the composition of the collection you're tasked with curating! To know that the people streaming in every day stubbornly want to see famous dead white males - rubes educated enough to appreciate history, not educated enough to be ashamed at the lack of diversity that the real-life history of the US presents.

But the curators got their own back when it comes to the 20th century. It's basically Women and Minorities' R' Us. It's also included in a poky afterthought section on the top floor - apparently my enthusiasm for the US 20th century is not widely shared.

And how they relish their ability to finally shape the narrative. They do so even to the point of farce and absurdity. For instance, there was almost an entire wall devoted to a gaudy painting of LL Cool J, of all people. He shared this room with other prominent Americans such as Chuck D from Public Enemy, Henry Louis Gates (famous for getting arrested while trying to forcibly enter his own home, and presumably something else before that), some black female opera singer I hand't heard of, some black scientist I hadn't heard of who invented something or other in World War 2. Nobodies, in other words, but nobodies from the right demographics.

You may think I'm just being mean-spirited here, but the far more damning criticism was the list of people whose pictures weren't displayed in order to make room for the above-mentioned notables. Some of the absent included:

-Neil Armstrong
-T. S. Eliot
-Ernest Hemingway
-Robert Frost
-Milton Friedman
-James Watson
-Elvis Presley

et cetera, et depressing cetera.

As it turns out, they have paintings of these people - you can check this for yourself using their search function. They just aren't on display. Presumably, they rotate people in and out of the sections, but always with an eye to keeping the demographic representation in the right proportions. So they'll put in F Scott Fitzgerald, for the moment, but he fills the white author quota, so bad luck for the rest.

There is one ameliorating circumstance, however, that partially lessens the shame. It is this - the sheer scope of the US 20th Century achievement makes it extraordinarily hard to do full justice to it in terms of selecting the most worthy citizens in any reasonably-sized museum.

For instance, the US list of Nobel Prize winners alone comprises 356 names. That is a large museum just on its own, without even starting on the other categories of achievement. Realistically, one will be forced to cull from among the set of Nobel Prize winners. Think about that for a while - you won a Nobel Prize, huh? Join the crowd, buddy - that doesn't get you a painting.

So the scope of the task is daunting. And yet it's hard not to feel that the current attempt falls amazingly short of what could have been. Modern society is simply not willing to celebrate greatness. It celebrates diversity instead. Greatness, indeed, is a slap in the face to the lazy egalitarianism of our age. Hence heroism must be devalued to include doing a fun run to support a cancer charity.

A National Portrait Gallery that includes LL Cool J but not Neil Armstrong is a joke and a disgrace.

In more sensible times...

So in France in 1789, they were well on the way to upending centuries of glorious tradition in favour of terror, slaughter, and anarchy. But when designing the electoral rolls for the upcoming farce, even the French knew better than to let everyone have a say. So who did they exclude? From J.F. Bosher's excellent "The French Revolution":

“[E]very Frenchman on the tax rolls twenty-five years of age or older who was not an actor, a domestic servant or a bankrupt was to have a voice in the election.”

Look, we're willing to let the lowliest illiterate peasant have a say in the running of the country, but actors? Come on man, even we've got limits!

The surprisingly inconvenient implications of hereditary politicians

So Canada elects another Trudeau, the son of the last one. Meanwhile America ponders electing either its third Bush in 30 years or its second Clinton in 16 years.

Honestly, what is the polite acceptable explanation for all this nonsense?

Because I can only think of possibilities that are all in one way or another deeply hostile to beliefs that polite progressives hold. Either:

a) These are in fact the most qualified candidates in their respective countries, because ability to lead a country is extremely highly heritable, presumably due to an overwhelmingly strong genetic component (though Hillary Clinton doesn't fit this, being a spouse, not a blood relative)

b) These are not the most qualified candidates, and these are not even the candidates that the electorate really most wants, but they win anyway due to some combination of :

b. i) the fact that we are ruled by an iron oligarchy of powerful families and interests who perpetuate themselves, and/or

b. ii) the electorate is comprised of complete morons.

c) These are not the most qualified candidates, but these are the candidates that the electorate really wants, because the electorate really has a deep-seated desire to return either to a hereditary monarchy, or a system of alternating rule by powerful ruling families, a la medieval and renaissance Florence. 

I don't think these are mutually exclusive possibilities, and all have something of a ring of truth about them.

But seriously, is there some other answer I've missed that would be more acceptable to the way the world is portrayed in a high school civics class?

Don't hold your breath waiting for the media to discuss the implications of any of these hypotheses.

Geography and Perspective

How strange it is, the extent to which one’s thoughts depend on geography and circumstance.

In theory, one could pause and take stock of one’s life anywhere – while sitting in traffic, while waiting in line to buy lunch, while bored at one’s desk in the afternoon.

But it never seems to work out that way. Most of the time, the small obscures the large.

For me, it only happens when I’m on my own, without a phone or internet connection - with the autumn sunshine streaming down, walking in silence through grassy fields and trees with green leaves starting to dapple to yellow and red, somewhere with only my own thoughts for conversation.

Then I think about my life.