Categories
Liberty

[2436] Bellamy mistook public-private dichotomy as the universe

In Looking Backward by Edward Bellamy, which is kind of the ideological polar opposite of Atlas Shrugged by Ayn Rand, there is one particular argument that denies the legitimacy of private property in favor of public property.

Bellamy believed that a person uses all of his or her knowledge and experience to produce a good or a service. All of those knowledge and experience were derived from past thinkers and inventors, through interaction with society. All those goods are public properties said Bellamy, produced by humanity and none can privatize it.

Since any further inventions or innovations will necessarily use those goods defined as public properties, new inventions and innovations will continue to be public properties. The usage of public property as an input is sufficient to classify a product as public property.

The inventors and innovators have no moral right to appropriate the products of public property as private properties. It belongs to everybody, so Bellamy held. Just as a person used all these public goods for free, the person must repay it back to the owner of these public properties, which is the society or more practically, the government. As you can see, it is a pretty collectivist idea.

This idea is set within a thought complex where money does not exist and a central planner is all-knowing in terms of productive and distributive efficiency. The central planner assigns all labor based on needs and capability into an “industrial army” and the problem of scarcity has been solved. More generally, the central planner manages all input of production. The whole book was decidedly painted by the statist version of communism all around.

This line of thinking is attractive for those who are against the idea of private property, never mind the impracticability of the matter. In the book, the idea was practical only because of the existence of an omnipresent government that does everything and can enforce the status of a good as a public property. But I am not really interested in its practicality, or impractically rather. I am more interested in its morality, and its origination, which Bellamy based Looking Backward on, despite its elaborate description of Bellamy’s prefered economic system.

The problem with this kind of thinking is its initial state assumption. Bellamy assumed past knowledge is the product of humanity and a person that uses that product owes humanity something in return. In short and more clearly, if you use it, you must return it back. It assumes collective ownership of all things and it preserves collective ownership regardless of circumstances. It is an effort at drawing a perfect circle that goes round and round.

But going back to the first men when none owned anything, or rather without making any assumption on ownership, consider the first state when men were beasts far back in history. The question is who owned what in the very first state of affairs?

Did the first men own the lands, the air and the water, or did these resources were not owned?

If they owned these resources, did they own it privately or collectively?

Bellamy necessarily assumed that these resources were owned collectively by the first men. The mere use of these resources make these resources public property.

I differ. I refuse the relationship between usage as a sufficient condition to turn a good into ownership, hence turning the good into either private or public property.

I differ because unlike Bellamy, I hold that these resources were not owned by anybody. It was a common owned by none. Consider this: if I used the water from a free-flowing river owned by none, would I automatically own the river?

No.

Furthermore, if I used the water and others used it as well, would it automatically mean all the users collectively own the river?

No.

My point is that usage does not translate into ownership, privately or publicly. Bellamy assumed otherwise.

More importantly, lack of private ownership does not automatically suggest public ownership. Within the realm of property ownership, there is a dichotomy between private and public property. But within the universe, there is a dichotomy of ownership and absence of ownership.

Bellamy, I think, worked within the dichotomy of private-public ownership and mistook that as the universe.

But this relates to physical resources. How about something intangible, like calculus?

It is true that knowledge, like calculus, is the product of contribution of hundreds or thousands of men and women throughout the ages. Without any exaggeration, it is a product of humanity. But although it is, it is not owned by humanity. The discoverers of various laws, theorems, rules, lemma and anything that has logical value in the case of calculus made it free for society to use. But free does not automatically translate into ownership, just like physical resources. None own it but they are free to use or learn it.

Recall the universe and the place of ownership dichotomy within the universe.

Categories
Economics

[2435] Oh the fickle markets

The stock markets all around the world are on a rollercoaster ride. It is yet another proof of the interconnectedness of our world and in a time like this, such interconnectedness can be a bane. The slightest news of little relevance—never mind the more substantial developments—from the other side of the world can rally or rattle the markets. These are days of pessimism and this kind of pessimism it is a little bit unhealthy.

It is painful to observe the stock markets. If to keep an eye on it is an exercise perfectly suited for sadists, to have a direct stake in the markets makes the whole enterprise all the worse.

Each day brings a kind of consternation. Will tomorrow be better or worse? Should I buy or sell now? Will tomorrow be delightfully unexpected or depressingly expected? Is that light at the end of the tunnel? Or is that a headlight for a speeding train?

These questions and its variants have been asked increasingly frequent over the past few weeks. The answers are not always forthcoming unfortunately. Sometimes, there is none to be had.

That is partly the fickleness of the markets resulting from the markets trying to incorporate everything it could. That fickleness grants rest to none, forcing all to stand guard around the clock.

The fickleness and volatility of the market are tiring. Whatever the benefits of the markets as a leading indicator of the wider economy, all the attention it demands is tiring. It consumes too much time and energy, all just for the small satisfaction of not losing money in a blink of an eye in this kind of prevailing environment we live in.

As a graduate student once, I had to model certain relationships involving the stock market. The volatility of the market presented a challenge because too much data can lead to the wrong conclusion. The data series was too “noisy.”

A friend suggested cutting the frequency of data from daily to weekly as a solution. Others suggested logarithmic difference. There was a bunch of other novel methods aimed at doing the same: filtering out the incessant noise in hope of squeezing something tangible and real out of the data series.

The stock markets do tell something, but its fickleness neither tells everything nor is everything it tells is necessarily true or relevant.

There lies some wisdom to go beyond the mathematics and economics puzzles. I find the wisdom helpful in keeping myself from frowning yet again, sighing continuously and from suffering mood swing as wild as the market.

I have decided that I will not go mad over the market. I have applied less weight to the importance of the stock market with respect to myself.  At least for now, I have decided to have less exposure to the craziness of it all.

If European politicians and bureaucrats could go on summer holidays amid a frighteningly global crisis, surely others inconsequential to world’s history can take some justifiable break of their own. The grand narrative of world’s history is unlikely to twitch for me.

I do not want to be the guy who sits in front of the screen staring in a broker house, hoping for the slightest opportunity to make money. Or that guy drawing meaningless lines trying to outsmart the market, the efficient-market hypothesis be damned.

No, I have decided to live a life more, and worry a little less.

There is money to be had, and it is always nice to have a little bit more money in the pocket. Yet, one has to asked, at what cost?

There is more to life, and the economy even, than the fickleness of the stock markets.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
First published in The Sun on September 30 2011.

Categories
Economics Liberty Politics & government

[2434] Is bailout of government preferred to bankruptcy?

Not all bailouts are the same. When a bailout socializes losses but privatizes gains, it can easily be judged through moral lens on top of existing economic reasoning. The interaction between government and the private entities is deplorable exactly because of lemon socialism. I find it harder to make a damning judgment when it is a bailout of government.

Some of the same crucial points applicable in the case of government bailing out private enterprise to me appear to assume lesser weight when it is the government which is being bailed out.

I do not see such bailout as a duty. Duty is too strong a word to describe what I feel but I do experience some grudging willingness to not oppose the bailout. What is troubling for me is that I am struggling to justify that willingness.

Why is a national government any different from a private entity that is too big to fail? Should the bailout in both cases be treated differently?

My initial take is that we individually and collectively do make mistakes sometimes and these mistakes are innocent in the sense that we are unlucky or that we did not know better. This line of reasoning is appealing when the direct stakeholders are the people. The national government, the reasonably democratic one at least, may have made bad decisions on behalf of the people but idea of letting the government fails appears absolutely cruel too me.

Maybe, a second chance is in order and whomever who bail the government out is an angel. What is important is that the government and the people learn their lesson. In some sense, this makes me supportive of the bailout of Indonesian and South Korean governments by the International Monetary Fund. These bailouts impressed upon the governments and its society the lessons of failure. These countries eventually experienced improved overall outcome, not just in terms of government finance and its economy, but it restructured the countries’ politics for the better, especially Indonesia.

Yet, wide suffering of the people cannot be the factor differentiating bailout of government from lemon socialism. In the case of too big to fail that plays a huge part in lemon socialism we have seen in recent years, the absence of bailout can adversely affect the lives of so many individuals indirectly. If lemon socialism is to remain despicable, then regardless of directedness of the stake holding, the suffering factor does not provide a clean cut. The eventual result is suffering in times of crisis however one looks at it.

The magnitude of suffering could partly be the answer, but I find it hard to make objective decision with such a subjective qualifier.

Suffering could be a necessary condition regardless of magnitude, but it alone cannot qualify as a sufficient condition. Somehow, suffering is merely a side issue irrelevant to the consideration of acceptability of bailout.

And there are a lot of sufferings in the world. Some of it is a case of accident and those are most unfortunate. Others are just, in the sense that you reap what you sow. That has to be differentiated. But I do not see how this is helpful in differentiating actions of the two bailouts. In lemon socialism, bad luck and consciously risky action gone bad can affect different people but at the same time. In many times, separating the two in a bailout is extremely hard if not impossible. Observe the bailout of corporations in the US where executive received bonus out of bailout funds aimed at aiding “Main Street”. In that case, one saves the innocents by saving the guilty.

So, I am forced to address the issue from another angle.

What if a government defaults? More than default, a government goes bankrupt. A lot of sovereign national governments have defaulted its financial obligations before but what if a government goes bankrupt?

If creditors assume control of the government, then this may make a bailout appear favorable. If the democratic way of life is cherished, the government would become undemocratic, being firstly answerable to the creditors rather than the citizens. This is probably the most extreme case where the government is effectively colonized because it will have to be put under receivership or the creditors. This is probably the most anti-democratic possibility under national bankruptcy. It is possibly anathema to libety as well, assuming national sovereignty is directly derived from individual sovereignty.

Due to its anti-democratic ending, maybe a bailout is favorable. Still, the recipient of the bailout itself will be beholden to its rescuer. Perhaps, a bailout is only a nicer of collar. The Asian bailouts by the IMF were not pretty, although the alternative was uglier.

(By the way, this is not applicable to Greece and Germany. Germany and others within the Eurozone have to bail Greece and others because they want to defend the Euro. That essentially changes the question from bailout of national government to the favorability of maintaining the euro. Also, the economies are closely-linked that bailing out Greece is the only viable solution, while ignoring moral hazard problem. I am probably thinking the US bailout of Mexico in 1995, or as I mentioned, the IMF Asian bailouts)

But I am in the opinion that such extreme case is unlikely to happen. But what other alternative would prevail in the event of bankruptcy?

It could be something like Germany-like with reparation post-WWI? But the point of bankruptcy is that the national government could not repay the loan. To have the reparation route seems like an abuse by the creditor. But if the route is taken, the “bankruptcy tax” to make up for the default might be a good alternative to a bailout, the problem of seigniorage notwithstanding.

What about the stripping of the government by creditors to claim whatever left as theirs? Would that mean the collapse of government? If the government does collapse and along with the state, would it not be easy to set up a new government and state? Sounds like a good idea and actually strengthens the anti-bailout position. But this would make a mockery of the process. Would the new state be essential a new one or is it really the same state in new clothes? If the new state is actually a new state, then no default in the world would matter because everything can be start anew.

Starting afresh however is outrageous. That is obviously a flawed thinking. It is likely that the market will see the new state as the old state, thus would treat the new state however it treated the old one: demand for high yield is one treatment.

There is a precedent: Argentina in 2002. That ended with merely debt restructuring, and along with grave civil disturbance, capital flight and depressed economy, although most of these were the results of ongoing economic crisis that caused the default in the first place. I said merely because the creditors did not have a hold on the government, the government escaped any retribution from the creditors (despite it suffering economic backlashes) and in fact, the creditors were punished through the debt restructuring. And this actually makes default favorable to me (although it is unclear to me if that default is equivalent to bankruptcy).

This is turning out to be a rambling where I bite more than I can chew.

So what exactly will happen if a national sovereign government, or better, a state goes bankrupt? Does it only mean outrageous yield? Collapse? Effective occupation by creditors?

In the end, whether or not I prefer a bailout to bankruptcy depends on the end results. I am a consequentialist as far as bailout is concerned. But this is unhelpful and goes against my preferred way of deriving an issue from the principle, in the sense of John Rawl’s Veil of Ignorance. What good is it to be able to decide after the fact?

Maybe I am thinking too much from the perspective of the state. I will continue to think more about this. But for now, time to read.

Categories
Pop culture

[2433] So now you’d better stop and rebuild all your ruins

[youtube]nBmueYJ0VhA[/youtube]

Categories
History & heritage Society

[2432] The evolution of cleanliness, according to Farish Noor

It is always a pleasure to listen to what Farish Noor has to say. He is a kind of a hip academician that challenges and entertains the mind. He makes history subversive and so making it much more interesting that the dull official version sanctioned by the establishment. I like subversion, even if I myself am increasingly conforming to societal rules… for a libertarian, that is. Last weekend when he held his regular public lecture at the Central Market Annex was no different.

He has a hypothesis on the understanding of the concept cleanliness and its evolution since colonial times. I do not buy it outright because it is, well, too clean and too specific. If you have a certain set of events, you are likely to be able to accommodate a lot of themes if you are creative enough.

Farish wanted to tie that lecture with the Bersih movement. I thought that was all too convenient. It sounded as if he was working the problem backward rather than deriving it from the root. Given this, there has to be more than a theme to sew it all together cleanly and tightly.

Nevertheless, the hypothesis of his is interesting enough for me to have a think and to modify it so that to make it more general. I find the looser understanding of his hypothesis which I consider as the gradual inversion of top-down approach of governance into the organic one as a more convincing narrative.

The whole premise of the lecture was how the idea of cleanliness was originally state-centric. European colonial powers in Southeast Asia considered the tropical environment with some disgust. The tropical jungle with sweltering sun conjured insect-infested environment, always associated with diseases like malaria.

The colonial powers brought with them new ways of life, apparently more ordered and cleaner, free from the naturally dirty tropics.

These powers introduced systematic town planning and better sanitation in Southeast Asia. Farish showed a photograph or maybe a painting contrasting clean European-designed building painted white erected in Southeast Asia with wooden Malay homes built haphazardly with coconut trees growing here and there randomly. If I may exaggerate, cows roamed free in the Malay village. European colonial powers took the former as clean, and the later as dirty. Farish more than hinted the racial superiority European colonialists held against the native then.

He argued that the introduction of modern medicine through colonial state apparatus further strengthened the European notion of cleanliness. The scientific nature of modern understanding of medicine intertwined with European understanding of cleanliness. Traditional Southeast Asian medicine was looked down at due to its dependence on beliefs regardless of its efficacy (here was where I first disagreed with Farish’s lecture. While a lot of these kinds of medicine are effective, many more are based on grandmother’s belief and downright fraud). The colonial powers undertook upon themselves to apply modern understanding of medicine and hence cleanliness to clean up the colonies. Hence, the introduction of town planning, for instance.

For him, cleanliness is not confined only to physical cleanliness. He argued at the public lecture that the definition of cleanliness was more wholesome. It also includes moral and spiritual aspects. It is this definition that allowed him to tell a story of evolving definition of cleanliness. He defended his definition by highlighting that the local inhabitants’ understanding of the term cleanliness included moral and spiritual cleanliness: a soul or morality untainted by the bad intention or even touched by the devil so-to-speak. He cited various customs as a lemma to his larger point.

Farish believed the notion of cleanliness that the European colonialists brought to this part of the world was a facade to cover up the dirty business of colonialism. While the colonial towns and capitals were neat, the political and economic exploitations were ugly: tin mines, rubber plantations, the misery these activities brought to the immigrants, the wars and crime. Farish argued that even the introduction of health ordinances was done toward this end.

European racism somehow got into the picture, with the colonial masters inevitably associated all things dirty with the locals and that gave the impetus for the mission of civilizing humankind, or probably in Farish Noor’s parlance, making everything clean. Here is where the wholesome definition of cleanliness gets into the larger picture.

This all encompassing understanding of cleanliness gives one mandate to govern. I am better than you, and therefore I am the master. From mere racism, it was later translated into statism. The state was all knowing.

Fast-forward to post-colonial Malaysia, the racist connotation (racism among Malaysians notwithstanding) was gone but the statism prevailed.

This time around however, the common people subscribing to Islamic values saw the government was dirty, whatever those values were. It was a kind of nationalism that despised colonial legacy. In the 1970s, the university students saw the political elites and institutions as champagne drinking men living a Western lifestyle. These elites were not the god-fearing leaders that fit the idealized leaders these students dreamed for. The students were revolting against what they thought was impure political structure.

Farish believes this was the first seed that prodded civil society to assume the concept of cleanliness as theirs and turned it from state-centric to organic definition. From the state being clean and the ruled being dirty, the relationship was subverted and reversed. What was dirty was clean, and what was clean was dirty.

He then introduced the Bersih movement into the storyline.

It is the civil society in Malaysia which now sees the government as dirty, and that civil society is stepping up to the pedestal, and beginning talking down to the government, as the government did previously. The civil society wants to clean up the corrupt government. Thus explains the evolution of the concept ”cleanliness” up to contemporary time.

Again, the evolution of cleanlinessis too convenient for me. Again, like I wrote earlier, I find the looser hypothesis more attractive, a hypothesis that traces the evolution of the relationship between the governed and the governing rather than that of a concept, which has to be loosen up beyond its typical meaning before it could fit Farish’s narrative.