Link: http://www.peopleandplace.net/perspectives/2009/1/26/collapse_and_renewal#

Found a lot of interesting things to think about in this article. Seems to get at how dynamic/complex/living systems (ecosystems, economies) evolve rapidly and then stagnate, which leads to collapse, and reboots the system (my simplification).

What I Have Learned
Change that is important is not gradual but is sudden and transformative. There is a common base cycle of change in individuals, in ecosystems, in business, in society. Increasing rigidity halts a long, slow period of growth and increasing efficiency. That begins a period of creative destruction and a fast period where uncertainty is great, where novelty emerges, and where new foundations are formed for a new cycle to begin. That is where we are now heading internationally.

In the United States, it is a time when the power of the state has achieved rigidity unseen since the triumphs of the falling of the Berlin Wall. Politicians have reacted to extreme disturbances, like the appalling terrorist attacks of 9/11, with powerful military response, a blind view of history and cultures, and a greedy desire for narrow benefit. Global economic expansion and dependence on peaking oil supplies, particularly in the Middle East, lock geopolitics into a self-destructive state from which transformation is extraordinarily difficult.

That is the time when change is most uncertain. We are living in it now. In this year we have simultaneously faced the sudden appearance of now reinforcing flips - sudden increases in the price of oil, increases in the costs of food, a financial collapse and the start of a recession, the retreat of Arctic ice sheets with climate warming, and accelerating loss of biodiversity. That is a lot to swallow and it reflects a process of human development and expansion since WWII.

But it is also the time when the individual has the greatest influence: when experiments determine the future; when the Internet opens opportunities for collaboration within and across nations; and when low cost mistakes are glorious because they trigger learning.

And these are the lessons I have learned that help in that process of dealing with turbulence:

1) Separate individual thought and work is essential but now, when integrative studies are the only way to reveal understanding, work with others is equally so. An individual’s knowledge can be combined with that of others to make the whole greater. In doing that we each recognize that we do not know everything but we do know, and know well, something. We learn with grace and humor and patience to work with others from different disciplines and backgrounds.

2) Complexity is in the mind of the beholder, in the patterns that are generated by causes that are simpler. Not as simple as once thought, but explained by a kind of “Rule of Hand", not by a “Rule of Thumb’. Quite simply, I found in case after case of ecosystem change that four to six sets of variables operating at a number of different scales, in a non-linear way, captured nature’s flipping behavior. It turns out that ecosystems are temporary assemblages, pausing for a few hundreds of centuries in a passing state of quasi-stability as part of evolutionary change. Think of that when we think of the reality of global climate change.

3) There are about three kinds of scientists - the consolidator, the technical expert, and the artist. Consolidators accumulate and solidify advances and are deeply skeptical of ill formed and initial, hesitant steps. That can have a great value at stages in a scientific cycle when rigorous efforts to establish the strength and value of an idea is central. Technical experts assess the methods of investigation. Both assume they search for the certainty of understanding.

In contrast, I love the initial hesitant steps of the “artist scientist” and like to see clusters of them. That is the kind of thing needed at the beginning of a cycle of scientific enquiry or even just before that. Such nascent, partially stumbling ideas, are the largely hidden source for the engine that eventually generates change in science. I love the nascent ideas, the sudden explosion of a new idea, the connections of the new idea with others. I love the development and testing of the idea till it gets to the point it is convincing, or is rejected. That needs persistence to the level of stubbornness and I eagerly invest in that persistence.

All types of scientists are necessary, but I would love it if we could encourage and include the innovative type of artist. At the least, enjoy rigor, but never inhibit the innovative artists.

4) I learned that the key to make effective designs was to identify large, unattainable goals that can be approached, but not achieved, ones that relate to fundamental values of free speech, freedom, equity, tolerance and education. And then to add a tough design for the first step, in a way that highlights or creates options to design, later, a second step - and then a third and so on. We found that the results were steps that rapidly covered more ground than could ever be designed at the start. At the heart, that is adaptive design, where the unknown is great, learning is continual and actions evolve.

5) I am prodigiously curious about nature, and that triggers initial ideas. I am also terribly persistent and stubborn about developing and testing an idea that grabs me; at those times I am totally and narrowly focused, driven by the potential. That is what eventually makes an idea useful. So I conclude that natures create the idea; stubbornness makes it useful! But I have had to learn how to see nature. It is curiosity, anecdotes, funny correlations, jokes and metaphors that start that. It is new emerging theory that completes it.

One has to learn to develop senses that help us listen to intriguing voices that are hidden amongst the noise. Owlish ways to hear the rustle of the mouse. Do that and the future will be fun and rewarding. We all might even help, at this time of great change and threat, to develop further a world of justice, understanding and equity.

Link: http://www.mindfully.org/Farm/2003/Everything-Is-Illegal1esp03.htm

Richard Nikoley pointed me to this excellent essay by Polyface Farm’s Joel Salatin. It is one of the best things I’ve read in quite some time – a complete indictment of government interference with just wanting to be free. Joel suggests that eventually the noose will tighten too much and a cycle will assert itself once more, throwing off these heinous chains to freedom, individuality, diversity and independence. I hope he is right.

Look, if I want to build a yurt of rabbit skins and go to the bathroom in a compost pile, why is it any of the government’s business? Bureaucrats bend over back-wards to accredit, tax credit, and offer money to people wanting to build pig city-factories or bigger airports. But let a guy go to his woods, cut down some trees, and build himself a home, and a plethora of regulatory tyrants descend on the project to complicate, obfuscate, irritate, frustrate, and virtually terminate. I think it’s time to eradicate some of these laws and the piranhas who administer them.

Link: http://www.zerohedge.com/article/martin-armstrongs-latest-real-dark-pools

Martin Armstrong continues writing his typewritten letters (from a detention center in New Jersey) regarding ongoing economic and political events. I’m no expert on Armstrong though if you’ve not heard of him, he was detained (imprisoned) for some seven years for contempt of court and only went to trial when the judge who had been detaining him was removed from the case by the NY Court of Appeals (source: wiki). There’s a pretty reasonable chance that Armstrong did nothing wrong other than crossing the State.

Oh and Armstrong had a number of models and forecasts he used to predict the market, some of which were apparently amazingly accurate. Who knows.

Armstrong’s latest letter is available on ZeroHedge, a finance-centered blog that has quickly become one of the most cited and popular finance blogs out there. Interestingly, the ZH writers are anonymous, taking on the names of various characters in Chuck Palahniuk’s Fight Club. Recently, ZH took their site off of blogspot.com and moved it to offshore servers to further protect their anonymity and the site’s often whistleblowing content.

Getting to the point. The letter is about Goldman Sachs and what Martin calls the “club” on Wall Street. The “club” is a group of extremely powerful individuals who are out to make massive amounts of money via the financial system. Importantly, the “club” attempts to do this not by making better bets (as in, speculating), but essentially by rigging the system and creating the perfect trades. The “club” accomplishes this goal by controlling inside information.

The letter is pretty lucid and provides an interesting glimpse into what goes on behind-the-curtains of Wall Street. What struck me most about the letter is that Armstrong works to dispel the notion that there is some conspiracy theory across all central banks to control the world. What’s really going on is that the central bankers are trying to do their jobs and maintain economic and monetary order. Unfortunately, they are clueless academics. Martin realized just how impotent and lost the powers-that-be were back during the 1989 crash:

It had dawned on me perhaps when there was the 19889 Crash. I had carried two cell phones many times when the model was reaching critical turning points as it did in 1989. The markets were going nuts, and my one cell phone ran[g] that was used primarily for very special clients. it was one of the G5 Central Banks asking me outright what the model was showing and did I think they needed to intervene? As I was explaining the focus was in Japan and that there would not be any abnormal correction and thus there should not be concern about intervention, my regular cell phone rang. It was another G5 member asking the same questions.

What became very clear to me, was they truly had no idea what was taking place any more than the rest of the world. Everyone was struggling to comprehend the new world that was emerging. Communism seemed defeated, markets were crashing, and the general expectation was - Should we be rejoicing?

Most of the central banks have a lot of PHDs, with no real world experience. They have read books, but have not been in the trench to “feel” what it is truly like. This is why government employees rarely have anything worthwhile that will ever contribute to society. …

Armstrong has seen behind the curtain and knows that the authorities (in this case the central banks) are clueless, self-interested, and incapable of working together to effect change. Often, outsiders see these authorities and point out their ineptitude, understanding they are clueless academics. And that’s where outsiders go from insightful to crazy – they go on to conjure up theories of impossibly coordinated efforts by the same incompetent authorities.

In other words, it’s just like the South Park episode – Mystery of the Urinal Deuce.

So what is going on when we see Goldman Sachs making money hand over fist? Simple: they’re doing what they do best, exploiting their inside information, political connections, and their current monopolistic status on Wall Street. Is it all that surprising?

Link: http://bit.ly/14TCLS

Note: I don’t normally get into celebrity deaths, but to say Michael Jackson was an icon would be an understatement. Despite any number of freak-things related to the King of Pop, he was still an amazingly talented individual who created some fantastic music. I can’t say he’ll be missed — he’s only missed insomuch as I could displace the good things about him from the bad. And that had become increasingly difficult if not impossible over the past ten years.

From Yahoo! Finance comes an article titled “Jackson lived like king but died awash in debt.” You probably already know the gist. Jackson created any number of fantasies, from his freak narcissim to Neverland Ranch. He lived a life of extravagance and died almost a half billion dollars in debt.

A few short descriptors that come to mind when I think about Michael Jackson:

• He was an amazing talent and produced a veritable catalog of pop masterpieces.
• His family was dysfunctional — often disturbingly so.
• He went from lavish wealth to huge debt. He got foreclosed on with Neverland Ranch.
• After things had started going downhill, MJ’s investment in the Beatles’ songs (owning the copyrights) kept him afloat. It has always struck me as odd that you could own someone else’s musical creation. Rent seeking off of intellectual property rights? Check.
• Jackson was freakishly narcissistic and/or had an extreme case of body dysmorphic disorder, engaging in all sorts of plastic surgery endeavors that ultimately made him look alien/gross/non-human.
• He had some serious demons with regard to his sexual identity. Whether he actually acted on these things or not, I don’t know — it doesn’t matter, really. He had problems and they related to his sexuality.
• MJ was one of most obsessed-over celebrities ever. And look how that turned out — he made his kids wear masks in public.
• He died young of a heart attack.

I submit that Michael Jackson’s life is one of the more disturbing examples of modern American culture. He was an extreme case, for sure, but his problems are not unique: too much debt, too much spending, rent-seeking off of other’s work, twisted narcissism, broken family, repressed sexuality, and dying young of a heart attack*, the end result of a life of stress and poor nutrition.

It makes me sad to make this connection, but it’s just too striking to ignore.

America, what have we become?

* I guess cause of death is yet to be officially ascertained, but we’ll roll with this for now.

Link: http://xkcd.com/592/

Love the latest xkcd comic:

In three frames xkcd indicts central planning with the single line that, “People are complicated!”

Why is this simple truth so hard to understand? If people are complicated, so are all systems of human interaction (i.e. markets, government, relationships, etc.). And it doesn’t stop there, of course: all dynamic systems are complicated.

It shouldn’t be a surprise that the simple-minded solutions of central planners fail to manage such unpredictable complexity. So why are they even trying?

Link: http://www.citmedialaw.org/blog/2009/new-hampshire-court-tramples-constitution-reporters-privilege-section-230-what-have-you

Many of you may not be aware of this, but my company IEHI, Inc. (I.e. the Mortgage Lender Implode-O-Meter) is involved in two lawsuits. Both are absurd in their own right and work to stifle whistleblowing activities. Both have cost our company a great deal of time and money to defend (And the lawsuits are ongoing).

I won’t go into the details of these cases here, but if you want to know more:

• New Hampshire Judge Orders ML-Implode To Divulge Identities of Anonymous Posters
• The Penobscot SFDPA case: FHA Seller-Funded Down-payment Outfit Sues ML-Implode In Effort To Silence Criticism

Our primary website ml-implode.com is a thorn in the side for many because it takes a sardonic view of the imploding mortgage industry. Ever since the site was founded, way back before most of us had even heard of “subprime,” ML-Implode has broken big news that has made CEOs cringe, often alerting employees to their own company’s impending demise before their managers had bellied up and let the cat out of the bag (a.k.a. “I’m sorry, but we’re all out of a job."). As distasteful as this function may be to some, we side on getting quality information out as soon as possible so that people can make informed decisions. Sometimes that pisses people off. We do not do it lightly.

As it is, the financial implosion genie has long since escaped the bottle. It’s common knowledge that the world is in a recessioin/depression/stagflation/OMG!WTF!/YGTBFKM! situation, so the fact that a start-up financial news site is getting hammered on by lawsuits has been largely ignored. Fortunately, with the recent Goldman Sachs suing of blogger Mike Morgan and articles like the one from Citizen Media Law Project (excerpted below - read it in full!), there may be a glimmer of hope.

I’m posting all of these thoughts on my personal blog to spread the word that just as we are being sued for not shutting up, your free speech is being attacked. Financial considerations aside, simply being aware of these attacks is important to you. The Internet has made way for little guys to be heard; unfortunately, little guys are still squashed by the big companies who have thousands of dollars to throw at legal fees all in an effort to stifle criticism. First amendment rights are fantastic in theory, but if the rubber doesn’t meet the road in cases like ours, anyone who posts material on the internet (And with Facebook, Twitter, millions of forums and blogs, who doesn’t?) is susceptible to losing everything they’ve worked for to frivolous lawsuits funded by deep pockets (The very deep pockets used to lobby the government for bailout funds or new legal loopholes to exploit).

So take note, and spread the word. Thanks. And here’s The Citizen Media Law Project’s take on our New Hampshire case (which we are appealing):

A reader recently tipped us off to a troubling ruling from a trial court in New Hampshire: The Mortgage Specialists, Inc. v. Implode-Explode Heavy Industries, Inc., No. 08-E-0572 (N.H. Super. Ct. Mar. 11, 2009). In the decision, Justice McHugh of the Superior Court for Rockingham County ordered the publishers of the popular mortgage industry watchdog site, The Mortgage Lender Implode-O-Meter ("ML-Implode"), to turn over the identity of an anonymous source who provided ML-Implode with a copy of a financial document prepared by The Mortgage Specialists, Inc. for submission to the New Hampshire Banking Department. The court also ordered ML-Implode to reveal the identity of an anonymous commenter who allegedly posted defamatory statements about the company and enjoined the website from re-posting the financial document or the allegedly defamatory comments. …

Justice McHugh’s March ruling granted all of the requested relief. He issued an order: (1) prohibiting ML-Implode and its agents from “displaying, posting, publishing, distributing, linking to, [or disseminating] copies and/or images of [the] 2007 Loan Chart and any information or data contained therein"; (2) requiring ML-Implode to “disclose the identity of the individual and/or entity that provided it with the 2007 Loan Chart"; (3) requiring ML-Implode to produce all other documents concerning MSI that ML-Implode received from the source of the 2007 Loan Chart; (4) prohibiting ML-Implode from re-posting the “Brianbattersby” statements; and (5) requiring ML-Implode to disclose the identity of “Brianbattersby.”

Justice McHugh’s decision is troubling on so many levels that it is hard to even list them all, but I will start with its blasé attitude towards the whole matter. The court issued no detailed findings of fact or conclusions of law before issuing the injunction, held no evidentiary hearing (apparently the parties agreed to this), and failed to even specify what cause of action supported its decision to enjoin publication of the 2007 Loan Chart. This latter point is by no means clear, because N.H. Rev. Stat. Ann. § 383:10-b looks like it creates no private right of action against non-government parties like ML-Implode. The court apparently regarded all this formality as unnecessary because MSI sought only injunctive relief not damages, but this is obviously incorrect.

But wait, it gets worse. In its filings with the court, ML-Implode argued extensively that the requested relief constituted an unconstitutional prior restraint on speech, sought information protected by New Hampshire’s qualified reporter’s privilege, and impinged on its users’ First Amendment rights to speak anonymously. The court brushed aside all of these arguments without anything I would characterize as legal analysis. Justice McHugh did not even address whether the New Hampshire reporter’s privilege, which was recognized by the New Hampshire Supreme Court in Opinion of the Justices, 373 A.2d 644 (N.H. 1977), applies to online journalism sites like ML-Implode, and, if so, whether MSI had made the showing needed to overcome the privilege. …

With respect to the allegedly defamatory forum comments, Justice McHugh failed to make any specific findings of fact regarding actual malice, falsity, or reputational harm, so it is hard to accept his ruling as a “final adjudication on the merits” that would justify injunctive relief. Moreover, the court failed to explain why MSI could circumvent the hoary principle that “equity will not enjoin a libel” simply by not asking for damages, and why section 230 of the Communications Decency Act did not block MSI’s claims for injunctive relief with respect to user-submitted content (not an uncontroversial proposition).

Justice McHugh’s opinion is also oblivious to the U.S. Supreme Court’s decision in Bartnicki v. Vopper, 532 U.S. 514 (2001), which casts serious doubt on the constitutionality of punishing the dissemination of truthful material relevant to a matter of public concern when the publisher (as opposed to the source) obtained the information in a lawful manner. True, Bartnicki addressed the constitutionality of imposing money damages for the publication of truthful speech, but enjoining truthful speech seems equally inconsistent with protecting our “‘profound national commitment to the principle that debate on public issues should be uninhibited, robust and wide-open.’” 532 U.S. at 534 (quoting New York Times v. Sullivan, 376 U.S. 254, 270 (1964)).

Instead of tackling all these difficult legal issues, Justice McHugh’s decision focuses its attention elsewhere. Throughout, it appears motivated by a conviction that MSI is not asking for anything unreasonable and that ML-Implode is not being very nice:

Then when [ML-Implode] was asked to disclose the identity of persons or entities that had provided it with unauthorized information and potentially defamatory information [ML-Implode] refused outright. One would have hoped that when a legitimate publisher of information was notified of the fact that certain unauthorized information was given to it which was then published, presumably in good faith, the publisher would, in order to maintain the integrity of its publication, willingly provide the wronged party with the information requested. Instead, [ML-Implode] exhibited a knee-jerk reaction.

This is not a view shared by publishers (big, small, offline, online) or by the law. Counsel for ML-Implode intends to appeal the judgment to the New Hampshire Supreme Court, and there is good reason to believe that the state’s high court will reverse. For now, the decision stands as an excellent example of why we need strong procedural safeguards for courts to follow when deciding whether or not to compel the identification of anonymous speakers, why shield laws that constrain judicial discretion are important, and why constitutional doctrine should limit judicial power to grant prior restraints to such a vanishingly small category of cases.

Peter Thiel, the founder of Paypal and the major donor behind Seasteading, responds to Patri Friedman’s article on “Folk Activism” (See here).

It’s always reassuring to find yourself in good company, and in Thiel’s response, he hits on the three frontiers I blogged about back on Freedom is Found at the Frontier. Yeah, it’s not like it’s hard to figure out where there’s no government, but then again, not many people are pointing this out, so I’m going to take this opportunity to pat myself on the back.

Now that I’ve done that, there’s one frontier that isn’t being talked about, and that is the frontier of day-to-day life that transpires outside the purveyance of Big Brother. Indeed, that is most of our lives, so this frontier is immensely important. Indeed, many, many people live most of their lives incredibly freely beyond the view of government. It should go without saying that one of the preeminent goals of any liberty-minded person would be to advance ways to expand this frontier and further shield life from government. And yeah, cyberspace can help do that, but we need more realspace solutions.

Day-to-day-life-steading?

(1) Cyberspace. As an entrepreneur and investor, I have focused my efforts on the Internet. In the late 1990s, the founding vision of PayPal centered on the creation of a new world currency, free from all government control and dilution — the end of monetary sovereignty, as it were. In the 2000s, companies like Facebook create the space for new modes of dissent and new ways to form communities not bounded by historical nation-states. By starting a new Internet business, an entrepreneur may create a new world. The hope of the Internet is that these new worlds will impact and force change on the existing social and political order. The limitation of the Internet is that these new worlds are virtual and that any escape may be more imaginary than real. The open question, which will not be resolved for many years, centers on which of these accounts of the Internet proves true.

(2) Outer space. Because the vast reaches of outer space represent a limitless frontier, they also represent a limitless possibility for escape from world politics. But the final frontier still has a barrier to entry: Rocket technologies have seen only modest advances since the 1960s, so that outer space still remains almost impossibly far away. We must redouble the efforts to commercialize space, but we also must be realistic about the time horizons involved. The libertarian future of classic science fiction, à la Heinlein, will not happen before the second half of the 21st century.

(3) Seasteading. Between cyberspace and outer space lies the possibility of settling the oceans. To my mind, the questions about whether people will live there (answer: enough will) are secondary to the questions about whether seasteading technology is imminent. From my vantage point, the technology involved is more tentative than the Internet, but much more realistic than space travel. We may have reached the stage at which it is economically feasible, or where it soon will be feasible. It is a realistic risk, and for this reason I eagerly support this initiative.

Link: http://www.ft.com/cms/s/0/5d5aa24e-23a4-11de-996a-00144feabdc0.html?nclick_check=1

Nassim Taleb’s latest from the Financial Times titled Ten principles for a Black Swan-proof world provides a brief insight into what Taleb believes caused our current financial crisis and what might prevent a similar crisis going forward.

I’ve excerpted those principles below (pushing the fair-use envelope a bit, perhaps). All italics are NNT’s.

Before delving into Taleb’s ten, I’d like to suggest that NNT’s principles can be (and should be) boiled down to more simpler structural problems/observations. Taleb’s folksy expressions make for useful analogies, but they needlessly complicate some simpler realities:

• Government-made negative externalities [1, 2, 7] — Legal constructs like corporations and limited liability companies are exploited to offload risk to the public. This subsidizes risks resulting in agents (CEOs, Managers, etc.) taking more and more chances with other people’s money. This is related to the principle-agent problem, which Taleb indicts in [4]. The Ponzi aspect of all of this is intrinsically tied to our leveraged financial system, which is inextricably tied to our centralized, fiat-"money” banking system. To me, this is the biggest point that I’ve yet to see Taleb make — centralized fiat currency is a fragile entity that is inherently leveraged (out of thin air) but can be used to build complex systems of finance. This won’t tend to break early (as we’ve seen). To kill the leverage you have to kill the source of it, which is our centralized non-robust banking system!
• The Authority Complex [3, 4, 6, 9] — we need a great deal more skepticism in our system and we should not have such centralized power. The problem here is the authority complex — the so-called experts all pontificate to the “ignorant” masses. The masses are too busy or too confused by the magical words of the experts to deduce that the experts don’t know what they are talking about. And like any good con, the con-artistsexperts are able to trick the masses into giving them all the power. I would argue that NNT’s #9, which more or less argues that we should question authority and not trust experts, completely negates NNT’s #6, which suggest that we should be protected from ourselves. Well who is going to protect us when we can’t trust the would-be protectors? That is a problem.

• Robust complex systems have simple base units that scale [5, 8, 10] — This is the biology angle that is exemplified by metabolic rate scaling over 27 orders of magnitude. A robust system requires simplicity at it’s base. Accounting is a good example of this. Accounting can get incredibly nuanced and complex but can always be brought back to debits and credits. The simplicity of this fundamental rule still enables incredibly complex book-keeping, but puts a governor on the system. You can’t make up assets without creating corresponding credits to the books.

  Compare this to our non-simple, non-robust banking system that holds as it’s core principle the notion of stability in prices and jobs while allowing for unlimited credit (money creation). Not simple.

  Simplicity lends itself to ease of understanding and puts a governor on shenanigans. It’s this fundamental simplicity that enables massive scalability and the emergence of complex systems that are robust.

I’m afraid I might have gotten overly complex in the above. I think what Taleb wants is an organic financial system, one that starts from real economic transactions between human beings and scales upwards from there. Thus, the solution is pretty simple. The base unit is the individual. Fictitious business entities that exist apart from owners are made illegal. No systemic credit structures, which fundamentally follows from the base unit being limited to the individual. This is because such a system would have decentralized banking that would evolve out of whatever needs such an organic economy would require.

This would be the (completely free) market solution, which incidentally most closely mimics biological systems. After all, where in biology do you see stuff created out of thin air (like Corporations or fiat currency)?

And life has been getting along fine for untold millions of years with a simple base units that are the molecules that make up DNA.

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. …

2. No socialisation of losses and privatisation of gains. …

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. …

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks. …

5. Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. …

6. Do not give children sticks of dynamite, even if they come with a warning . … Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. …

8. Do not give an addict more drugs if he has withdrawal pains. …

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement. …

10. Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. …

Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.

Link: http://www.cato-unbound.org/2009/04/06/patri-friedman/beyond-folk-activism/

Unfortunately I can’t add much in the way of comments or thoughts on Patri Friedman’s article titled Beyond Folk Activism published on Cato Unbound yesterday. I just don’t have the time as I have to prepare my 2008 taxes. I’m not joking.

It’s a thoughtful article and I wish I could force* all of my libertarian activist friends to read it.

The underlying reason my original blog autoDogmatic has fallen by the wayside (as far as my own writing is concerned) is because it wasn’t doing much, if any, good — that is, other than to encourage my own teeth-gnashing and bitterness at the current busted systems of control. There was a point where I just realized: this is all nothing more than talk. It’s toothless.

I have no idea of Patri’s specific solution of seasteading will work. However, he’s absolutely right that we need more competition in government and a means to escape the entrenched power structures in place with existing governments. The only way to get “there” from here is to create new frontiers (See my post on Freedom is found at the Frontier), and going to the sea is one way of doing that.

One thing I’d like to add to Patri’s discussion is that governments tend to consolidate power and grow. Thus, not only is the scarcity of frontier-space a problem, but it’s a problem further compounded by the tendency of new government iterations to consolidate power over time. Just look at the transition of individual States in a Union after the Revolutionary War to the United States of America we have today.

I wonder if the search for the most functional and free government is a leprechaun we’ve no hope of catching. This could be because governments are inherently anti-freedom (After all, they are: monopoly of force is always anti-freedom), so their very existence unavoidably negates the goal. I’m not sure it matters. It seems the best solution is to seek out new frontiers. Seasteading, space exploration, and “more fences” via digital encryption all work to achieve more frontier. We need it.

And now I go to work on my taxes. Here’s a clip from the article (be sure to check it out!):

Government is just another industry, where countries offer services to citizens, but it has some unfortunate features. It is a geographically segmented monopoly, and since all land is taken, the industry has an enormous barrier to entry. To start a new government you have to beat an old one, which means winning a war, an election, or a revolution. And it has very high customer lock-in: there are barriers to emigration and immigration, and switching countries involves both high financial and emotional costs. These characteristics result in a horribly uncompetitive industry, so it is no surprise that existing firms tend to exploit customers instead of innovating to attract them.

This analysis neatly avoids moral debates and has clear practical implications: if the problem is an uncompetitive market, the solution is to make it more competitive. It also exposes the futility of strategies that don’t address this issue, like trying to win the war of ideas. While appealing and noble, this is ineffective. Without competitive pressure, our institutions generate flawed policies which benefit the political class, not those that reflect the consensus of academic economists. We need more competition in government, not more academic papers or mindshare.

P.S. Also added Jonathan Wilde and Patri’s new blog, Let a Thousand Nations Bloom to Google Reader.

*Joking, sort of.

Link: http://www.coconutketones.com/

Originally emailed to family, I want to share this here, as well.

[H]ere’s a pdf file that talks about Dr. Mary Newport’s experimentation with coconut oil and her dementia/alzheimer’s suffering husband and the improvements she’s seen as an apparent result of this experimentation (File size ~700KB).

The gist is that coconut oil has a shorter length saturated fat that gets converted by the liver into ketone bodies. Ketones are used by our bodies for energy and our brains and heart both apparently like ketones a lot. The tie-in to dementia is that it may be the case that dementia is being caused by our brains losing the ability to burn glucose (the metabolic unit created from carbohydrates) for energy; therefore, over time our brain cells start starving and dying. In these cases, ketones subvert the busted glucose metabolic pathway and get the nerve cells the energy they require.

Obviously, it’s hard to say for sure based on her anecdotal research alone if this is a true ‘cure’ or preventative measure for Alzheimer’s, but really, given there is no particularly effective cure or treatment for the disease, giving a couple tablespoons of coconut oil a day to someone suffering from dementia is easy to do and worth a shot. Spread the word.

• Newport’s new site, CoconutKetones.com — looks to still be somewhat under development, but there is some good info here if you want to learn more.
• Original blogging on Newport, Coconut oil and Alzheimer’s — blogged on an article about Newport’s findings, including the clock drawing experiments.
• WHAT IF THERE WAS A CURE FOR ALZHEIMER’S DISEASE AND NO ONE KNEW? — Link to PDF file hosted at Newport’s site
• On using coconut oil with your cast iron skillet
• All about oils, Coconut milk and Whiskey and More on Coconut Oil

H/T Seth.