the Air Vent

Because the world needs another opinion

Capitalism, Probability, and The Second Law of Human Dynamics

Posted by Jeff Id on March 19, 2012

Effective World Government Will Be Needed to Stave Off Climate Catastrophe

“From each according to his ability, to each according to his need.” is in sharp contrast to, “all men are created equal.”

Both concepts are inherently similar, yet have stark differences. Both pre-define humanity with a fundamental understanding. Both have the best of humanity in their intent.

One of the two says – Government can equitably chose both individual ability, and need, based on rational, careful, considered observation. The other conveys simply, that government cannot. The second, more simple statement, is more insidious in nature. Far more cold and devious in fact. Instead of saying, “Here is your comfortable and/or livable future which we guarantee”, capitalism says, “Here are a set of equitable rules. Good luck! We the people, hope very much that you find your way”.

Which is more accurately representative of our human nature?

As solidly factual as the second law of Thermodynamics, Capitalism has a fundamental motivation. Embedded in the meaning of the now-ancient American message is, “give us a ‘governmentally’ equitable opportunity to succeed, and on average, more of us will.”  Like hot and cold, the net flow of success will be maximized. It is as much a part of our intrinsic nature as the unstoppable second law of thermal energy.

Across the globe, we must realize by now that sentence wasn’t written by morons. At this point in history, the most control centered person cannot ignore the incredible effect of that first sentence of the US Declaration of Independence on global lifestyle. Give freedom to succeed to everyone, and the poorest of ability, also gain success. A maximization of the collective, through freedom of self-improvement for the individual.

Capitalist freedom is  by no means a friendly message, as there is NO guarantee. None for me, none for you, none for even Bill Gates or Elon Musk. In the truest sense, capitalists are individual quanta in a sea of tough love. If Elon Musk keels over tomorrow, he will have left a fire hot source of economic development in his wake. The entropy of which has had a positive effect on the wealthy and poorest of our society, and he did it in America because our government didn’t remember to say, “NO, you may not create a bank, or a ‘stupid fast’ and overpriced short range car, or launch giant explosive cylinders into the sky!”

Like thermodynamics, the capitalist contribution of motivated and wrong-direction individuals (money losing quanta) always contribute to the whole economic energy (temperature) and by the guaranteed laws of probability, are offset by the gains of the successful attempts.  Do you think Elon might be working at 9 pm or is he watching Oprah network with the leftist couch dwelling minions of welfare?

So in the Scientific American article linked above, the intellectually elite writer (Gary Stix  – likely also not working) failed to recognize what makes us human, and decides the ‘answer’ to the coming global warming, isn’t to understand how to work with human nature but rather to fundamentally change human nature. How insane is that!  The mechanism he chooses is as unimaginative as you might expect – build a powerful global government that no human can possibly resist.

How do we overcome our hard-wired tendency to “discount” the future: valuing what we have today more than what we might receive tomorrow? Would any institution be capable of instilling a permanent crisis mentality lasting decades, if not centuries? How do we create new institutions with enforcement powers way beyond the current mandate of the U.N.?

He continues his un-inventive solution to save the world with ever greater clarity.  This guy should have a blog!

But they have never taken on a challenge of this scale, recruiting all seven billion of us to act in unison. The ability to sustain change globally across the entire human population over periods far beyond anything ever attempted would appear to push the relevant objectives well beyond the realm of the attainable. If we are ever to cope with climate change in any fundamental way, radical solutions on the social side are where we must focus, though.

Anyway, read the article linked above at your own risk. Like many on the intellectual left, Gary has no understanding of how the world actually works.  Also, like far too many on the left, he has a well-funded megaphone.

I wonder why blogs like this are still winning the argument?

34 Responses to “Capitalism, Probability, and The Second Law of Human Dynamics”

  1. Andrew said

    But are they still winning the argument? I’m not convinced… If they were there would be no need to call for omnipotent world government, surely?

    Seems to me these people are:

    1) dangerously sociopathic/ delusional/ malaevolent/ psychotic – if they genuinely believe what they say
    2) insidious/ opportuniistic – adopting an unprincipled position they consider will maximise theirs or their masters’/ clients’ gain – at everyone else’s expense
    3) base/ narcissistic – simply aimed at causing a stir, seeing their name quoted (the ‘talk of the town’)
    4) some combination of these

    Are there other possibilities?

    At least, in airing this foolish diatribe, it allows the rest of us to:

    1) identify another potential totalitarian and through their connections – those whose ears they have, and
    2) to ready our guard

    I take it as a potentially important signal, a warning.

    Don’t drop your guard folks, the totalitarians have not yet gone extinct!

    Good write-up Jeff. Thanks.

  2. M Simon said

    Also because misfits are ALWAYS attracted to totalitarianism. I think out of some misguided idea that a sufficiently powerful government can make everyone accept you. I’d like to remind all my misfit friends that the first thing totalitarian regimes do is destroy any type of minority.

    http://classicalvalues.com/2012/03/whats-love-got-to-do-with-it/

  3. Brian H said

    Capitalsim, huh? Is that capital owned by simians? Or the simian equivalent of human capital? Or simulated capital? Or the capital invested in simulations? Or….
    I’se so confuzed!

    ;p
    _________
    Stix’ article is going to be very handy as a reference to give to those who doubt the Greenie-Global-Takeover-Conspiracy Theory. Much handier than telling them to STFU and FOAD!!

    He’s done the world a real favour by coming out with it all so blatantly.
    >:-)

  4. Brian H said

    When physics fails, there’s always sociology to fall back on!

    Now, hand me my resolver …

  5. Jeff Condon said

    Brian,

    I think this argument goes deeper than people realize – probably the writing! In the most economically repressive governments, people find ways to work the system. If there are no jobs, black markets spring up. When we force cigarettes to cost so much, back doors are formed. If drugs become illegal, people can get rich going around the system. Trying to stop people from having opportunity is like grabbing on to jello with a tight fist.

    The economics in China are a petri dish of human interaction. The factory regions are nearly lawless in their operation. Every opportunity to evade tax is taken and rarely are people prosecuted. Vat tax resuted in a huge industry of stuffing small components in taxi compartments and running them across borders – for a fee. The countryside is a wide swath of poverty and ignorance yet they find means to barter, cheat and trick things from anyone. It is a matter of pride if they get even a small amount more than they should have. I suspect it may sound like downtown Detroit to a lot of people and it probably isn’t far off. Sex, clothes, drugs, cars and cellphones. Cars are more difficult over there – the poor don’t usually have several sitting in their yard.

    I really believe this is basic human nature and that Gary Stix, is a fool to consider trying to crush it in a Darth Vader fist. I wonder where economists put that human resistance coefficient in their cost equations? The man is crazy. We just need big powerful, one world, authoritarian, leftist government and everyone will be happy! yay!

  6. Gary said

    Blogs like this win the argument (in the sense of being verified by reality) because they inherently understand the Constructal Law (http://www.constructal.org/) which says that all systems that survive naturally optimize their flow rates by constantly reorganizing to optimize entropy. Marxist fantasies in all versions simply refuse to accept the way nature works — which is hugely ironic for devout Materialists. The totalitarians delude themselves into thinking they can legislate that water will flow up hill, pigs can fly, and that people en masse will act against their obvious self-interests. Their foolishness would be comical except there are too many of them and they have a talent for making life miserable for others. The Founders of the US may not have understood thermodynamics but they knew how the world works.

  7. stan said

    Gary Stix needs to spend a year working for the NCAA trying to keep under the table cash from changing hands. And the NCAA (per one Harvard economist) is the most successful cartel in history.

  8. [...] Capitalsim, Probability, and The Second Law of Human Dynamics (noconsensus.wordpress.com) 38.735893 -85.379958 Share this:ShareFacebookPrintEmailTwitterLike this:LikeBe the first to like this post. [...]

  9. kuhnkat said

    Brian H,

    “When physics fails, there’s always sociology to fall back on!

    Now, hand me my resolver …”

    Sorry there are too many of them for a resolver to do much good. You need a slaughtomatic.

  10. The Second Law can be illustrated with a hose used as a siphon to empty a swimming pool, for example. It works if the other end of the hose goes down a slope and is significantly below the bottom of the pool.

    The water flows and entropy increase because we have a single process. The SLoT requires a single process, as is obvious in everyday life.

    If you cut the hose at the highest point you now have two processes, and the water no longer goes upwards from the pool.

    Any heat flow from a cooler atmosphere to a warmer surface is a single completed process. The energy is not constrained to return by radiation or to do anything in particular. It could be conducted elsewhere in the surface for example.

    Because it is a single process from atmosphere to surface, there is no justification fro saying that any subsequent process can create a net effect and thus excuse the violation of the Second Law. It would be like water flowing uphill to the town’s water tank on the basis that it would subsequently flow further downhill through pipes into houses. But there is no constraint enforcing this, as there was with the siphon before the hose was cut. After all, the tank might leak.

    Hence, thermal energy cannot transfer spontaneously from a cooler atmosphere to a warmer surface. Fullstop.

    See my publication Radiated Energy and the Second Law of Thermodynamics

    http://www.webcommentary.com/docs/jo120314.pdf

  11. Genghis said

    Doug, you are letting them confuse you.

    Think of it like an adjustable pressure cooker. If you tighten the valve the temperature in the pot goes up but the total energy flux into the pot and out of the pot stays exactly the same.

    Jeff, My experience is that 90% (purely made up number) of the population wants to be governed. It is just like bees, 90% of them just go collect pollen where they are told to, but 10% go exploring discovering new sources of pollen. The vast majority of the bees probably think that the 10% of the rogue bees should be forced to stop wandering around and be put to work.

  12. TGSG said

    Genghis,you do know that 94.237 % of all statistics on the internet are made up on the spot yes?

  13. amabo said

    TGSG, last I heard, 4 out of 5 people who make that claim have no substantiation for it.

  14. Doug proctor said

    The ability to succeed through individual effort, the principle of capitalism, is only completely true on the level playing field of a start-up economy. Once wealth has consolidated, the opportunities are no longer equally available. The Founding Fathers understood this better than us because they came from a land of aristocratic control going back centuries.

    Today, the aristocrats are the Soros, the Buffets, the Gates and the millions of smaller but still powerful people. I and you on our primary skills, compete, for example, in a coffe-shop business with Starbucks. I have friends in 4 coffee-shops, two of which are now out of business, and the other two of which have the same situation: as owner-manager-workers, the profits are adequate to pay themselves but not managers AND themselves. Starbucks, with its advantages of size and systems, can still get good profits from stores managed by others. Those already in have an advantage not remedied by individual effort.

    Pure capitalism is no longer a realistic option for our societies as a whole. It works in a new, expanding society, as was the case of America in the 18th century. Read about the expansion out of New Orleans in that time and you will see how competition wasn’t a problem, as all and any product could be sold at high prices in Europe. Planation owners helped new owners, and the risk of a new operation was only physical. If you could create it, you could sell it at a profit. Today is not like yesterday.

    Some government control is necessary. A check must exist for powerful economic entities whose individual interests are not just different from, but the reverse of, the general population. The Company town and its ownership of shops and the workers’ houses does not benefit the workers as much as it does the Company, and in practice works against the free movement and options of the workers. This is not communism. This is an unintended consequence of pure capitalism.

    The rich and powerful dominate the electoral processes. That is beyond doubt. Tax laws, for example, benefit those who control the election processes – as Homer Simpson would say, “Duh!”. Some – scary word, here – socialism is fundamentally required in an established capitalist-based society to even out the now-uneven playing fields.

    As a group, those who have businesses benefit from a well-educated, healthy and prosperous worker group. As individuals, they do not benefit from paying for the worker group to be educated, healthy or prosperous, however. Each one wishes to maximize his own benefits, but when applied to all, the end result is less beneficial to the individual. Yet there is no way for one to start behaving “better” when the profit from cheating is so high. All must pay or, as some might put it, suffer equally for a sense of fairness to overcome the individual’s irritation at not doing as well as theoretically possible.

    Regulation of the business world is required in established societies. It must be done if we are not to have a return to a winner-take-all, aristocratic or kleptocratic past. The question is all about how much regulation, not about if there is regulation.

    Regulation as it stands and as it has been expressed in the last 50 years has not been about leveling the playing field but about protecting or ensuring that large, powerful industries and individuals continue to maximize their positions. CAGW is just one of them, though one that for a change is attacking the American society rather than a foreign society. The type of regulations that are needed is what is needed changing, not the abandonment of regulations.

  15. Robert said

    Hi Jeff,
    is there anywhere on here where I can find R code for calculating trend uncertainties using ARIMA or AR noise models?

  16. Jeff Condon said

    Robert,

    There are quite a few places.

    Most recently:

    http://noconsensus.wordpress.com/2012/03/11/sea-ice-overlapping-satellite-record-analysis/

    cal.Isig is the function which does the calc.

  17. Jeff Condon said

    Doug Proctor,

    “Pure capitalism is no longer a realistic option for our societies as a whole.”

    Not that I disagree with the concept that capitalism needs some control but some of us are doing well with it – from nothing. You don’t expect someone who starts a coffee shop to compete with someone who starts a medical instrument production plant right?

    There are a lot of coffee shops and a lot of competition. Perhaps a better idea was needed? After all, anyone can make coffee.

  18. Jeff Condon said

    Doug,

    “As individuals, they do not benefit from paying for the worker group to be educated, healthy or prosperous, however. Each one wishes to maximize his own benefits, but when applied to all, the end result is less beneficial to the individual. Yet there is no way for one to start behaving “better” when the profit from cheating is so high. ”

    If everyone has a job, workers begin controlling the pricing through competition.

  19. stan said

    Jeff,

    You have to check out the latest trip down the rabbit hole by AP’s bozo environmental propagandist, Seth Borenstein. Obama’s boys are trying to repeal the law of supply and demand. Increasing the supply of oil does not lower price, they argue.

    They’ve added so many strange mirrors to their looking glass world that down is the new up.

  20. Greg F said

    The ability to succeed through individual effort, the principle of capitalism, is only completely true on the level playing field of a start-up economy.

    I was wondering, when did the US stop being a “start-up economy”?

  21. page488 said

    I notice that the upcoming 2012 U.N. Conference on Sustainable Development will be held in Rio this June.

    When are they going to go to somewhere really fun – I suggest Timbuktu.

  22. Robert said

    Thanks for the help Jeff,

    This was much easier than what I was planning on doing. R is the way of the future I suppose. Quick question, for calculating trend uncertainties in the code, did you use ARIMA (1,0,1) or another type of noise model?

  23. Kenneth Fritsch said

    “Some government control is necessary. A check must exist for powerful economic entities whose individual interests are not just different from, but the reverse of, the general population. The Company town and its ownership of shops and the workers’ houses does not benefit the workers as much as it does the Company, and in practice works against the free movement and options of the workers. This is not communism. This is an unintended consequence of pure capitalism.”

    This utter and unadulterated poppycock. Under pure capitalism enitities do not have any more control over others than they can obtain by voluntary agreements with other parties and without force – as is the case with governments. Do not attempt to equate those who obtain power and privileges through the government with capitalists. Under pure capitalism the consumer decides who succeeds and fails. Give the government more power, and for whatever reasons, I can guarantee you what you rail against will get worse not better. Comparing what choices people and workers made in the past in order to condemn what occurred then is an excercise in pure silliness. Back in history children and their parents had options of allowing the children to work or starve. Strict child labor laws in those days would have meant that people starved.

  24. Jeff Condon said

    Robert,

    The uncertainties are a weak estimate 1,0,0. If the noise distributions are normal, then the estimate is close. If you are looking for something for a more realistic fit, you can use auto.arima to find a model and run a monte-carlo analysis. It is still dirty but for something better, it depends on the data and there are other people I would ask first.

  25. Greg F said

    The nobility in England was primarily hereditary. That is what the founders wished to avoid. And they did a very good job of it. Soros, Buffet, and Gates didn’t acquire their wealth through inheritance. They could hardly be classified as aristocrats. That is why I asked when did the US stop being a “start-up economy”? It not like Sergey Brin and Larry Page, the founders of Google, are ancient history.

    All you have to do is look at the Forbes 400 richest Americans. There isn’t a lot of old wealth there as has been the case throughout America’s history. The premise Mr. proctor basis his argument on is without basis. The regulation he argues for would effectively strangle the upward mobility that has allowed the high achievers to produce the enormous wealth that we all benefit from.

  26. Kenneth Fritsch said

    I think that people unintentionally, and sometimes intentionally, confuse capitalism for what is better described as the political system known as fascism. The link below to mises.org gives a view of just such a political system and contrast it with socialism. Both socialism and fascism require government control of the economy and individuals operating in those economies. Pure capitalism minimizes the importance of government and individual freedoms and rights are of upper most importance – and in fact a requirement for the system to work most efficiently. While we have had glimpses of pure capitalism it is yet to exist in the world. We do have some experiments with fascism and socialism that probably never were pure forms of those political systems, but the results have been telling for those willing to learn.

    http://mises.org/daily/5963/The-Vampire-Economy-and-the-Market

  27. David S said

    Looking at his recent articles one has to wonder if Gary Stix is really a person or in fact some kind of a bot. He seems to be a walking compendium of all the thoughtless self-styled liberal attitudes, and has put his degree in journalism and 0 years of experience in either science or the world of commerce to good use in becoming an expert in neuroscience and a wide range of public policy issues.

  28. M Simon said

    Doug,

    I’m in the process of starting a business. Total initial outlay $200. I design products and other people make and sell them. I handle design and marketing. And with the Internet (which I had a very small role in developing) marketing is free.

    Opportunities abound. If you are prepared to take advantage of them. And what got me my start? Some one read my writing and liked it. I put in 8 years with no pay for that one.

  29. Brian H said

    Gary said
    March 20, 2012 at 9:08 am | Reply w/ Link

    Blogs like this win the argument (in the sense of being verified by reality) because they inherently understand the Constructal Law (http://www.constructal.org/)

    I wasn’t aware of specific application of that to economics, but I suppose it’s a reasonable analogy. I’d be happier if it explicitly took into account the local creation and pooling of negative entropy (at the expense of externalizing increased entropy, of course).

  30. Brian H said

    Jeff;
    Please fix the headline (‘Capitalsim‘). It looks goofy.

  31. Brian H said

    Jeff;
    re China et al: the totalitarian “fix” is always to try and plug the leaks. To the extent they succeed, the society and economy stagnate. The PRC and NK are different data points along that dimension.

  32. Brian H said

    Jeff Condon said
    March 21, 2012 at 2:19 pm | Reply w/ Link

    Doug Proctor,

    “Pure capitalism is no longer a realistic option for our societies as a whole.”

    Not that I disagree with the concept that capitalism needs some control but some of us are doing well with it – from nothing. You don’t expect someone who starts a coffee shop to compete with someone who starts a medical instrument production plant right?

    There are a lot of coffee shops and a lot of competition. Perhaps a better idea was needed? After all, anyone can make coffee.

    Hmmm.. Google ‘Philz Coffee’ .

  33. Brian H said

    Greg F said
    March 21, 2012 at 11:46 pm | Reply w/ Link

    The nobility in England was primarily hereditary. That is what the founders wished to avoid. And they did a very good job of it. Soros, Buffet, and Gates didn’t acquire their wealth through inheritance. They could hardly be classified as aristocrats. That is why I asked when did the US stop being a “start-up economy”? It not like Sergey Brin and Larry Page, the founders of Google, are ancient history.

    All you have to do is look at the Forbes 400 richest Americans. There isn’t a lot of old wealth there as has been the case throughout America’s history. The premise Mr. proctor basis his argument on is without basis. The regulation he argues for would effectively strangle the upward mobility that has allowed the high achievers to produce the enormous wealth that we all benefit from.

    I think someone tracked both ends of the income scale categories, and the Fortune 500, etc. Found that after a decade or two only about 20% of the same people remained in the top and bottom bands.

  34. Brian H said

    Kenneth Fritsch said
    March 22, 2012 at 11:25 am | Reply w/ Link

    I think that people unintentionally, and sometimes intentionally, confuse capitalism for what is better described as the political system known as fascism.

    I think the term “Statism” encompasses both fascism and socialism. It is notable, btw, that Nazism was ostentatiously “green”, bucolic back-to-Nature fantasy version.

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