Sunday, October 4, 2009

Inverting the homunculus

What would our world look like if we believed our soul was distributed amongst everyone except us?

I blame an artifact of our evolution for most of our problems. (It's certainly preferable to an incompetent deity!) We have brains designed to outwit our surroundings, not to understand them. Thankfully it just so happens that a little understanding is actually necessary to outwit things or we'd probably be completely clueless and live by our urges alone. (e.g. George Bush)

Unfortunately, one of the things we're designed to cleverly outwit is ourselves, and that seems to be what most gets in the way of being open minded and receptive to even those perspectives that are antithetical to our internal model of reality. We just can't see what we're not actually looking for. And we see all too well whatever it is we are looking for (sometimes even if it isn't there.) Having good senses helps some, but the real problem is more structural and systemic. True objectivity is a fantastically unnatural act.

Even when our systems fail, we're still very hard pressed to discover what's wrong by any means other than looking for a particular problem. Prisoners of our own dogma, we would indeed be doomed to generate nothing but heat were it not for the feedback that eventually becomes impossible for even us to miss. And that's why I have hope that we're in the beginnings of an inverted revolution; a reinvention of society that starts from the top down like a wave and reorganizes all of mankind around a completely new economic paradigm.

Another quirk of our design seems to guarantee this will happen; we behave a bit like fermions in that no two of us can share the same model of reality (occupy the same intellectual space) at the same time. Maybe it's only because that space is so large. Or maybe it's because we're so small. But it does suggest that we're likely to try everything, steal and improve what we can't invent ourselves, and eventually stumble onto sustainable economies. They are almost certain to be sustainable because they unite humanity into a collective struggle against it's real enemy--entropy--rather than each other.

It might be as easy as eliminating the externalities that prevent our free market system from achieving sustainability. Suppose that in order to consume more than one share of the earth's resources in a given month that you had to buy that excess from those who must then have used less--at market prices. I don't believe they'd sell for less than they needed to achieve an adequate standard of living. Nor do I believe they'd be able to hold out for much more than that since someone would be willing to settle for less in that case.

That one change seems to trigger a cascade of changes that address a great many of our most serious problems. If people didn't need to work to subsist there would be a sort of selective pressure favoring those business models which tended to create jobs people actually enjoyed. We might even see the emergence of a completely different type of business model--where the employees actually paid for the privilege of getting to do their jobs (but of course shared the resulting profits as well.)

It might even lead to a gradual inversion of our very perspective on wealth, leaving us to measure our own worth in terms of how extensively we enriched and empowered everyone else. My guess is that exploring that enormous space is simply a lot more fun than the tiny sphere centered around ourselves.

Wednesday, September 30, 2009

How to make a public servant

Politicians have outlived their usefulness. In a way, they became victims of their own success. The process of getting elected forces them to spend a great deal of their time focused on raising enough money to either get or keep their jobs. It also compromises their ability to remain objective and impartial.

I don't blame the politicians as much as I do the electorate we never even had. When our nation was founded, and only white landowning males voted, that tiny electorate more or less understood the issues facing their leadership, and were thus more competent to evaluate the candidates. Banking relied on trust and personal integrity, not credit scores. That select group of people knew and depended on many others, making it likely they'd know candidates personally or have a close associate who did. And even they were hard pressed to do much better than we can today.

Extremely few people are even capable of having much of an appreciation of what our government is and does today. Let alone what it should be doing, or which candidate is more likely to be effective. Our elections reflect this fact and are nothing more than marketing campaigns funded by the very people we don't want to have anything to do with our leadership--wealthy special interests. We can never have any real confidence in how any freshman will behave. And all we know about the rest is that everyone else they do business with pays them a lot more than we do as their employers.

I think we can simultaneously both fix the electorate (render it genuinely effective at identifying representative candidates) and make it possible for honest very ordinary people to successfully run for high office without having to raise any money. And we can do all of that without any changes to our present government. All we need is a means to make our political capital more tangible. We're much better at getting the most for our money than we are at spending our vote. (Murphy's Law guarantees that if we're capable of doing something wisely, and our stupidity doesn't kill us first, then we'll eventually find it by process of elimination. So we have that going for us.)

I don't know where it will happen, or exactly how, but I do see a most likely scenario that follows as a natural consequence of the present state of our world. I think it will begin in a small city, from an attempt save money by replacing their existing information systems with internet based services that do a far better job for less. These services, having been created by speculative developers competing to most empower city management, will be designed to harvest the insight of that community's electorate because that feature is likely to be regarded as useful to purchasers of such software and very cheap to provide by developers, (but wasn't even remotely justifiable prior to the internet, at any cost. The Open Government directive changes this by creating the funds that motivate the developers.)

Primary schools are likely to take advantage of this new opportunity to teach civics, and more children will become aware of the power of their parents' political capital, and the opportunities that exist to deploy it. Likewise, noteworthy members of the community with hopes of becoming council members, or simply a whole lot to say to their leadership, will become prominent in discussions of the issues at the city's web site. In that sort of environment it won't be long before a developer invents a virtual currency to represent our vote, and provides an interface like a shopping mall, where you browse through the issues facing your city council, and spend your political capital on the issues you care about. Everyone would get the same income, but it would evaporate rapidly from your account (just like real political capital you don't use does) which encourages you to spend it continuously or lose it. Kids will thus get the both the knowledge and the means to make their parents more civic minded.

In such an environment anyone with genuinely good ideas and insight about their community and its problems would quickly become visible and receive the encouragement and endorsements they need to run for office without needing to compromise their integrity by selling access to themselves for campaign donations. The campaigns themselves would most likely be more about reviewing their performance as evangelists over the period between elections rather than about their character, experience, or agenda. It becomes a way to vet our political leadership by watching them lobby us to spend our political capital as they suggest. By showing people that by not participating their political capital evaporates into the accounts of those who do, they will be more motivated to participate.

The software would most likely evolve to better incorporate the role of political evangelist. It might involve giving up your political capital to buy a seat in a virtual city council at the site. They might be graded on how closely their recommendations reflect the way the community actually spent it's political capital, with the lowest scores periodically being kicked back into being voters and freeing up those slots for others. In this way the virtual council would end up filled with those most effective at educating and involving the public in civic affairs. As the real city council watches this process it would be made more aware of the zeitgeist and exposed to every good idea to come out of their electorate.

I see this process as inevitable. Especially because of what's going on in our own government these days. Right now the folks who actually staff our government are busy trying to implement the letter and spirit of Obama's Open Government initiative. That's what someone like me can join govloop to participate. The TV news doesn't talk about this stuff. It's the most publicly empowering modification of governance in the history of mankind--far more than simply getting a vote, this is enfranchisement in true spirit--where a child's wisdom can touch the mind of The President in only the time it takes to traverse the machinery we're creating to recognize it.

I guess the reason that I'm so sure this is going to happen is because I can imagine the alternative our government must be aware of: that such a site might evolve outside of and completely independently of government. If that happened they'd face a meta-government with more genuine political power, and most likely composed of more people than their own population. And that's why our own government is looking for ways to engage and involve us. And why can be certain that we'll find out how to make a public servant.

Thursday, September 24, 2009

Modeling capitalism on evolution

About a week ago, I received a YouTube personal message from someone in Bahai following the exchange below:

The message:
Interesting... You seem to know more about economics than I do. Aside from all the flawed policies of all the worlds goverments towards these issues there is the added deliberate "economic manipulation". Its almost like "America" doesn't want third world countries to develop. Anyway its a long topic of which I wouldn't mind sharing links on the subject matter as you seem to be as interested as I am.

I do think however that these problems are no more caused by "economic complications" than by sheer greed by a few confederates, no different from the thug on the street snatching a purse only this happens in board rooms and and the act is explained away as "company profit gains" instead of pure immoral and reckless behaviour. It has become acceptable because we were taught by TV, college, and the like that profit is all that really matters.

I've lived in Africa. My uncle was a farmer there and he had to close down his farm because South Africa was subsidizing certain farms that produce good all Corp foods from the wonder-havens such as spar. The country where I lived hardly manages to produce its own food now and I foresee a grim future if ever its food imports are threatened.

I dont blame the cooperates alone and I dont believe in conspiracies, there are enough (actually way more than enough) economists and financial analysts in the world to create models, and simulations with computers, to find economic structures that would eliminate imbalances and pull the rug from under the feet of poverty for all time. This model would, of course, have to be dynamic and capable of evolving otherwise it would be as useless as the one we have now.

I am a Bahai, and as a Bahai this is one of the things that we are trying to do, of course this would first mean that greed would have to be removed otherwise the system would be doomed to fail. The challenge now (I love the way he put it in his movie) is meet--the people of all the world must unite, be educated--in solving the worlds problems together, discuss, forget religious differences, partisan politics, power grabbing, materialism, and all the things that inhibit us collectively from reaching a social enlightenment the Buddha would marvel at.

On a final note I know this is long sorry. There is this note in the bible that says in paraphrase (Jesus shall in those days dwell on earth). Christians hold this to mean that the historical figure shall descend from heaven and dwell among men. I think it means that society shall have the individual capacity to realise truth for themselves and they shall dwell with truth and truth with them. Truth (not meaning the dogmatic views held by certain Christians of today) but scientific, philosophical, spiritual realization, like the fruit of all knowledge, shall be like a flower in humanities hand.
My reply:

I haven't studied economics, but I'm old enough to know a little about a lot of easily understood things. I think we have poverty for a very simple reason: Our global economy is backwards. We are paid to work, when it would be wiser to arrange things so that we had to pay for the privilege of working. And we pay nothing for the very real negative impact each of us has on everyone else each time we consume something, go anywhere, or do pretty much anything. If we were not allowed to do that--to secretly steal from each other because the price we paid for things incorporated a payment to be distributed to everyone else--then there could be no poverty. The simple act of consuming far less than an equal share of our world's resources would simultaneously increase that person's income to above poverty level. There is simply no way for the wealthy to consume such a disproportionately large portion of the world's resources without an enormous hidden subsidy to make that possible.

None of us pay the full price for the products and services we consume, and because of this, the more you consume the greater the subsidy that you enjoy. I see this as the reason for nearly all of our waste because it is the hidden subsidy that makes it waste in the first place. When it becomes cheaper to destructively harvest a resource from the environment than it is to recover that same resource from the waste stream the reason is always the same: the true owners of the resource, humanity, are not being paid for what is essentially the spending of the integrity of our shared biosphere to lower the cost of that input.

The other problem with our version of capitalism is that the more successfully it works, the more rapidly it raises productivity. But the faster productivity rises, the harder it becomes to avoid a falling level of employment simply because less workers are needed to produce the same number of goods and workers can not be redeployed like capital can--there is a long lag time for them to be retrained for some other role in a newer industry. Even with adequate savings, a rising level of unemployment creates a vicious circle by lowering demand, causing more workers to be shed, and so on. I think real economists call this "the business cycle." I'm more knowledgeable about simple things--so I call it what it looks like to me--the unavoidable chaos introduced in any system that misuses positive feedback loops--like the vicious circle plaguing our implementation of capitalism. (Outside of rapid amplifications, like explosions, such things have a limited utility because they're so hopelessly hard to control.) The important thing to notice is that it doesn't take even one evil actor to create quite a lot of trauma. Why? Because the trauma is coming from the people doing the most good! The ones raising the level of productivity the fastest and most efficiently.

Please understand that I'm talking about normal capitalism that we've more or less had for the past century or so. The stuff that's gone on in the last few years was a Krebs cycle of legalized fraud: buying insurance (which they call credit default swaps) from each other (which they call reputable institutions) to improve the quality of unrecoverable loan packages (which they had lots of confidence building names for, like CDOs.) so that they could be repackaged yet again. Investors diffuse in at every point in the cycle and the fee's fly out, like the enzymes of some sinister metabolism, to seek out and bind to the next politician--to potentially open up yet another pathway for exploitation. The mechanism harvests a great deal more of the "free equity" that investors contain than any prior strategy so it was very popular. The fix is to simply remove all of the mitochondria from all of those bankers. That should stop it. Of course, that would take ages even with the enormous and very motivated pool of free labor available for the task. So we'd better get started.

People point to precisely this reason to condemn capitalism itself when it is only our subpar implementation that needs fixing. The wisdom of capitalism is genuine because it's lifted right out of nature. We know it can work like a charm because a much better implementation of capitalism created us from little more than a muddy mess and eons of bad weather. That's actually what capitalism should be a model of: evolution by natural selection. So why did we fuck up copying it in such a plainly foolish way as to engineer evil directly into it? The only reason I can find is because of our faith in god. That's what stops us from seeing the wisdom of a system that asks no one to work. It requires a fundamental shift in what you're willing to have faith in: The fruits of billions of years of evolution embodied in every human being, or a clumsy cognitive utility knife that helped our distant ancestors fashion explanations for the bumps in their nights.

Guess what happens if you try to build a world on the sincerity of fables? People get hurt. Science doesn't work because smart people thought of it, but because much smarter people can't yet break it. Economics doesn't work well because no one is willing to fix the most broken parts of it because to do so requires such a radical change--literally turning it upside down in a way. It's political suicide to even think such a thing.

My advice to all people who would put their faith in transcendental things rather than themselves is to find some living person you honestly believe is wiser than you and put your faith in them instead. Find a mentor and beg for mentence. Or delegate your decisions to them. There's just no way you won't be better off. We are the only ones who can make ourselves happy. But this is never a personal journey. Or a magical one. Even the great Newton had to be laborious hoisted up the shoulders of those giants by the mundane exertions of everyone else. And still he was tediously stolid in all the meetings!

The morally righteous sorts are so blinded by the offense to their sense of decency or godliness involved in literally paying someone who doesn't wish to work for nothing more than staying out of trouble that it completely stops them from examining the strategy any farther. It is almost equivalent to suggesting that we outlaw work. They believe so few people would choose to work that the few who might could never feed us all. But this really can't happen for a bunch of reasons. We can't actually give people their full share because it would be way too much. They'll never get more than is necessary to create the parity of opportunity we believe all humans have an intrinsic right to: an amount sufficient for a large majority of them to eventually find productive employment. We already produce much more than it takes to do that for every person on earth.

The irony is that there is not a single cent of theft in this strategy, (but there is trillions of dollars of it in the economy we have now.) There is no transfer of wealth from a working Peter to pay a Paul who choses to spend his life playing while on the public dole. Paul is only spending the exact same income that Peter gets for free as well: one share of the dollar value of the calculated negative impact of all humanity. I actually think such a system would stymie Paul's sort of economic disenfranchisement. Without the stigma of contempt and sense of worthlessness that comes from having to beg for sustenance, Paul is far more likely to eventually discover something that stirs his passions. Lots of people who thought they hated work don't seem to last very long after they retire. Work really isn't about money and never was. It's what a human simply must do occasionally to sustain their sense of self-worth. Work is the original mind-altering drug that makes us think more highly of ourselves. The odds that large numbers of us could easily live without it are zero. We might work a hell of a lot less than we do now, on average. But that's pretty much unavoidable if productivity continues to rise and population doesn't keep pace no matter what we do.

This simple change, from being paid to work, to a system where we pay for the privilege of working has consequences that address the major problems facing modern corporations in a most elegant way: by perfectly aligning the interests of all parties in an enterprise; employees, employer, and everyone else. The very concept of being an employee disappears--labor isn't bought, jobs are sold. Unions become superfluous. The very nature of entrepreneurship changes from trying to buy enough land, labor, and capital to generate an even larger revenue, to designing a compelling enough enterprise to cause a group of workers and investors to adopt it. The profit it generates just isn't likely to be as important to them. Doing something fantastic or fun or beneficial is. Their business model still has to work. But it doesn't have to make any profit and might even sustain small losses every single year without ever going bankrupt. Money is intangible and not terribly easy to spend wisely. But the reward of doing something that makes you feel good about yourself couldn't be more tangible, moving, or addictive.

This is the most crucial property of this whole strategy and explains why this approach promises to be so wholesome. Workers won't wish to be part of an enterprise that basically just makes tchotchkes for nitwits, or offer services you're better off without. A lot of crime and vice will disappear because it will no longer be a person's only option. The underground economy would suffer the most. The religious industry should be the most interesting, because we'll finally find out if hardship sells god. In a world where there is nothing to stop you from dedicating your life to your church I'll bet it looses some appeal. But maybe I'm just dead wrong and huge numbers of people will leave work to dedicate their time to various charities. But they won't be making soup or sheltering the homeless. They might become educators. How bad could that be?

You might be wondering how we get there from here. Get rid of the minimum wage and start redressing the externality associated with using the world's resources as I described above is all it will take. As we gradually increase the value attributed to the resources used each year, the business models that depend on cheap resources will no longer work. The prices of things we don't really need will rise as the prices for things like food, energy, health care, and shelter fall.

Things that are enormously wasteful, but very convenient will be the luxuries we probably loose first, like lots of packaging. Shipping will decline because the economies of scale achieved through centralized manufacture and distribution are probably only reflections of the subsidy presently enjoyed by shipping firms who don't have to pay us back for their enormous environmental footprint. But the point is that we can make this change very gradual and even backup when we need to if we find ourselves going too fast. The value we choose to assign to each unit of resource is completely arbitrary, and can be chosen to be just enough to fund a minimalist lifestyle for those that choose not to work.

Thursday, August 27, 2009

Picking up your own footprints

  • We don't want to rob Peter to pay Paul.
  • We don't want to see Paul without food, clothing, shelter, and now health care apparently. (I suppose a job will be next.)
  • We especially don't want to reward laziness, recklessness, or in any way remove Paul's intrinsic responsibility to take care of his own.
On it's own, this poses quite a dilemma. Obviously we're willing to borrow enough from Peter to ensure Paul enjoys a parity of opportunity--a more than fair chance to discover a self-sustaining role in our society. This is justified as simply maximizing Paul's potential to become a productive member of society. We can even calculate the minimum amount we should be willing to invest (the loan amount that would be fairly repaid by the average person's share of GDP over their lifetime.)

Also obvious is the fact that Paul is unlikely to simply die without the basics, but will obtain them via some means that creates victims out of some of the rest of us. This seems equally irresponsible because it effectively dumps what is a problem facing all of society onto the handful of people who end up being victims (typically the most vulnerable among us.)

Even worse, it undermines our ability to do justice at all. If you force someone to steal in order to survive, and treat them as you do someone who steals out of greed, then all you've really accomplished is to tarnish the credibility of society itself. It actually forces us take the law into our own hands. (I think it might explain why people reach for a gun for protection before an exit strategy. Hostility may be a natural reaction to a needlessly unjust world. I know it makes me mad.)

While at the same time, we're looking for a way to make it harder to put a carbon dioxide molecule into the air, or to use water, energy, or any resource wastefully. We've invented some ad hoc strategies to deal with it, from tiered rates to all manner of politically charged allocation formula. But there's one strategy no one seems to mention which is odd because it seems the most obvious, most fair, and offers the most benefits.

Suppose we considered the pollution absorbing capacity of our biosphere to be something that we all owned equal shares in. If you used more than your share of any resource you would essentially be buying up someone else's share of that resource in the course of doing so. The reason to do this isn't because it elegantly solves the problem of funding the Paul's that can't cut it. The reason to do this is because it is necessary to be fair. We really do all share the air we breathe; the quality of our environment is a resource people are free to spend more than their equal share of without actually redressing the miniscule loss everyone else experiences as a consequence. This approach kills a whole flock of birds--not just the too poor and the too rich. (Another example of this is the airwaves. We are the only reason they have value; that is why we each deserve an equal share of the revenue generated by leasing them.)

A feedback mechanism is necessary to create the selective pressure--the economic opportunity--to motivate discoveries of less impactive more mutualist lifestyles, products, and social structures. It places every economic entity, from giant multi-national to the lowliest citizen (I'm sure we must have one by now) in touch with their own footprint and with a perfectly equivalent incentive to reduce it. And it does so without taking a single dollar out of the private sector--although in practice it will appear to be a tax, it honestly isn't. Every penny is returned.

Creating an income stream for everyone in the world in this way has some pretty nifty side effects. (Note that revenue generated by polluting the atmosphere in this scheme rightfully belongs to all people, not just Americans. But the revenue generated by most other things, from water to the airwaves, public lands, etc. belongs almost exclusively to Americans.) This will at least partially subsidize foreign aid (admittedly less than 1% of our budget, but every little bit helps.) It proves we're serious about being accountable for our behavior as global citizens. It earns us the respect of individuals worldwide who will immediately grasp the fairness of it and put pressure other all government to copy the policy. It even promises more tools to both document human morbidity, mortality, and rights violations data; and to prevent it.

Having a lifelong steady income stream that's inversely proportional to the impact of your lifestyle will have a vastly more dramatic effect on waste than higher prices via new taxes could. This is because there is a psychological incentive created by the awareness of where you stand with respect to average that will motivate people to beat the system by using less than their fair share and generating income from the scheme. People will not consume significantly less, just more wisely because for the first time there is a feedback loop they directly experience. The costs they cannot control today because they are collective costs to our whole society become direct costs they can and will control effortlessly. It even allows the wealthy to better enjoy their wealth knowing they are fairly redressing their huge footprint in doing so.

No other approach could be as easily or painlessly phased in. This is because the amount these shares trade at is completely arbitrary and can be very gradually adjusted to create as much or little economic pressure as we like. Some will liken it to a wealth transfer scheme--because it will indeed result in a higher level of taxes for those who consume more resources and a lower level for those who consume less. But it has nothing to do with how wealthy they might be.

I could list a lot more wonderful synergies this approach promises--from the means to make criminals fund their own incarceration, to better access for all to higher education. But this essay is already too long. And I never even got to the reason that's most important to me personally (an all too common predicament for Asperger victims:) it is an essential part of any society that wishes to allow its citizens to treat their neighbors with genuine respect.

Sunday, August 16, 2009

Religion could be our best invention

I believe religion is robbed of almost all of its utility by a single mistake made by its proponents: Their assertion that it's true. Without that mistake it is an invitation to contemplate a genuinely fair and just world. A challenge for our species, the starting point in understanding the evolution of our values—the basis of our concepts of justice, fairness, freedom, and responsibility. And a single thread linking the very spirt of our species from distant past to uncertain future.

This single mistake prevents religion from becoming a wonderful and useful tool to induce cooperation, kindness, and thoughtfulness throughout mankind. Even worse, it turns religion into it's own opposite, and history is littered with the horrible consequences that prove this. Searching for the god that we know doesn't exist is a pretty good description of what the most basic sciences are trying to do. That statement is almost flatly nonsensical, but I get the feeling from my study of science that almost all scientists are atheists, yet also can't help but have some notion of an underlying order and deep intelligence because the sheer beauty and outrageous elegance of our universe just seems to imply it. They look for beautiful and elegant theories rather than simply trying to fit the data for this reason. They aren't satisfied with today's standard model partly because it isn't as beautiful as they'd expected it to be.

Correct that single mistake and religion becomes a true and beautiful part of science. The study of human values, passions, and the search for that which is sacred by its nature (which I would argue is actually law, and only law. But that's off the point.) We need a god like we need the square root of negative one. But there is no number, either positive, zero, or negative, that when multiplied by itself gives negative one. Nonetheless, just by claiming there is such a beast, and using it, we can correctly solve a vast panoply of hard problems that could not be understood without that screwy figment of our imagination. That is real magic. The magic of imagination can have a power which is very real and tangible, and not the least bit impaired by our knowledge that it's only a metaphysical device, not a physical reality. Just because something is admittedly imaginary doesn't seem to limit it's utility—quite the contrary. Maybe you have to be imaginary to accomplish supernatural feats. Obviously nothing real could. Why can't imaginary things be useful, powerful, and worthy of knowing well? It isn't really possible to know something powerful very well without worshipping it in the most sincere sense.

Without the single mistaken claim, the shift moves from trying to know god, to trying to discover godliness. That's a crucial difference. We know what the former approach leads to. But consider how useful the search for godliness is, for it puts us in the position of having to think about creating a just and fair society. It lures us to see the consequences of our actions, evaluate the impact we have on each other, our children's future, etc. It leads us to forms of cooperation, measurement, and fairness. It forces religion into the very role it had originally intended to achieve: the most competent and genuine technology for discovering a very meaningful, fulfilling, and enjoyable lifestyle. And it gets there honestly—by making a legitimate science out of measuring a myriad of the most important things that are presently poorly or haphazardly measured, like human happiness, the quality of relationships, the environment created for children, etc.

By searching for godliness, instead of trying to better know the god of our ancestors, we're more apt to become better ourselves at noticing mutualistic solutions to problems rather than self-centered ones. Instead of teaching people that god wants them to love their neighbors, it asks us how we might engineer our society so that there is no need to ask. So that the very geometry of our economy and social structures make our utility to each other readily apparent—filled our lives with opportunities to cooperate rather than compete as it does now.

Converting religions into different approaches to a search for the mostly godly ways we can imagine would probably offend some of its adherents, but I think most would be deeply intrigued. If the utility really does come from faith, then it doesn't really matter whether god is real or not. Placebos are better than drugs if they work. A god that we know is imaginary, actually can be all of the things we assume God is. A faith that there is a means to empower every human born with the capacity to achieve a oneness of heart and spirit with the rest of humanity is worth working towards. Why not take it more seriously? Why not approach the challenge as we do everything else we're serious about accomplishing, using every tool and technique we've discovered in carefully measured and directed searching?

It really is impossible not to sin—not to have any negative impact on those around you, for example. What matters in that case is whether we'll take the steps to deal with it. If religion was a search for the economy that best redressed the intrinsic consequences of our choices, both positive and negative, then how could it lead us anywhere but towards the deepest mutualism, most symbiotic products, lifestyles, and perspectives. How could it leave us with anything but love and respect for each other, as well as for the imaginary god we realize is worth serving, and finally know why.

Wednesday, August 5, 2009

Property impairment poker

I've been trying to find ways to better illustrate an alternative approach to taxation when one popped up on television: my city is beginning another round of what appears to be a game of property impairment poker. It consists of picking the winning hand of property rights rhetoric to determine whether to issue another Conditional Use Permit. This time the unit is in a condominium complex where nearly two thirds of the units already have permits.
Like many cities in America, we broadcast our city council meetings so that residents can watch from home. Because Avalon is so small, it's easy to just walk up there and join the meeting if you see something you want to comment on. So when no one seemed to have a straightforward way to reach a decision, I decided to walk in and offer a rather rambling and fragmented summary of what I explain below.
Avalon's city council reviews each player's hand (seek-able video)

It's an interesting issue to me because it represents an opportunity to use the tax code to fairly resolve a conflict of interests between neighbors in a community. It is to everyone's benefit that all property be as useful as possible because that maximizes its value. In a resort community, like Avalon, this means a substantial fraction of residential properties are vacation homes owned by people who use them infrequently and rent them out like timeshares between those visits.

At the same time there are others who live here year round. Obviously the folks who come here to vacation are, well, on vacation. They're apt to party rather late into the night, wake up early to fish or hike, and generate a far greater disturbance than any normal use of that residence would. That's the conflict; allowing one person to use their property in a commercial way has an unavoidable consequence for nearby residents. Not letting them use it that way isn't fair either.

Our state government did what I think is the right thing to address this issue. It granted each city the power to decide whether or not any particular residential unit is suitable for this sort of commercial use and allows that use to be taxed. These two powers give a city government the means to regulate this sector of its economy.

Prior to our electronic age, it would have been too expensive to employ the people necessary to measure the impact that this policy has on our community. Each event is a tiny inconvenience for very few people, the overhead of even reporting it is in most cases more of a hassle than the event itself. But that is no longer true. Pressing a single button on your phone and going back to sleep isn't much to ask. Nor is emailing a cell phone photo of some minor vandalism, trash, or other nuisance. Especially when you know its because your city is trying to measure the impact that their policies are having on you so they can pay you back for it.

The Transient Occupancy Tax (TOT) is intended to repay the community for the additional costs it incurs from a more commercial use of its residential property. Part of doing that must include some redress of the additional cost to residents, not just their city. I can think of no other way that genuinely treats both forms of residential property rights (income generation and use as a residence) equally. Even if we assume we'll never be able to do an adequate job of resolving the conflict between residents and permit holders, this step is still necessary to avoid the exact situation we find ourselves in now--facing yet another contest with no real basis for evaluating whether a permit should be granted or refused.

If the city commits itself to using a portion of the TOT to measure and redress the actual impact the permitted units are having on residents then there is no reason why permits could not be issued by a completely automated process that didn't require anyone to judge a particular application. The map created by measuring the impact these units have will answer that question for us. It will tell us if there are any critical densities (where the impact starts to scale nonlinearly with the number of permits, peaks, or even declines.)

Keeping track of these incidents and analyzing them periodically will allow us to estimate the true cost in dollars experienced by the residents most disturbed by these units and provide for repaying them. Whenever that cost is less than what the TOT generates to repay the neighbors, a permit should be granted. And wherever it is more the city should refuse the permit, but add the application to a list of those pending, and inform the applicant that they will be issued as soon as the TOT can be raised enough to fairly compensate the community.

This approach gives the city council a fine degree of control over the sector without having to address the individual applications. The smaller the fraction of TOT they allocate to redressing its impact on residents, the fewer units will qualify for permits, the less revenue the city will receive from the TOT, and the less incentive managers have to police their clients. Conversely, allocating more to repay the residents would have an inverse effect, enabling more properties to qualify, increasing the incentive managers had to rent only to responsible clients, and increasing the revenue raised by the city.

But best of all, this mechanism allows the city to automatically monitor all such units and maintain a map anyone can view to see the data. Such a map will give the homeowners associations and managers a greater incentive to become fiercely intolerant of rowdy clients and the basis to compete with each other more vigorously because such a clear measure of their performance is visible for all to see. Finally, it will create an objective basis for revoking permits that consistently generate the highest payments to neighbors. Perhaps all such permits should come with expiration dates or need periodic extensions.

Additional Comments, Notes, and Links to related information

The impact on neighbors

It seems unreasonable to expect residents to just endure this trauma. Yet it must be what we expect because we have no mechanism to redress such minor injustices as being repeatedly disturbed at odd hours by partying vacationers. But why not? Because when it happens frequently enough it can become a significant but difficult to quantify impairment of a residence. The only remedy, not issuing a permit, is too severe as well.

This predicament effectively bars residents from any meaningful civil remedy and is the sort of needless systemic injustice that does a great deal more harm than we can notice. Until you experience a repeated inconvenience like this first hand it is difficult to appreciate how much stress, frustration, and anxiety it can add to one's life. But much worse than that is the way it undermines our expectations of and respect for justice and our community itself. It diminishes our interest in even looking for genuine solutions to other problems too because so much about our infrastructure is unjust it hardly seems worth fixing tiny parts of it. And it makes adversarial relationships between residents and owners more likely simply because we neglected to redress the civil as well as civic externalities with our TOT. This is an extremely expensive and socially dysfunctional dis-ease to accept for lack of the small amount of prevention it would take to fix it.

The bottom line is that to deny someone a permit may potentially cost the applicant thousands of dollars a year in lost income. While to grant one may potentially cost their neighbors a nuisance that has a very difficult to quantify cost that is easily undervalued. I think both of these options are simply unacceptably unfair and we must develop the means to better understand what effect this use of property has on all members of our community.

What is being done isn't enough

There is no doubt that the managers do their best to mitigate these problems by educating their clientele, posting rules, inviting complaints, and issuing 24 hour response numbers to residents. They live here too, and the sort of clients that are rowdy do more damage than they're worth in revenue, so they have similar interests in avoiding these problems. But none of these things compensate the folks for being repeatedly disturbed. Instead, those nearby residents are effectively drafted into doing surveillance service for the managers; forced to notify the managers when unruly clients break their rules if they want anything done about it. This is unreasonable to ask of someone in a residential neighborhood or housing unit--mainly because our local government could fix the problem with something like the mechanism I'm proposing.

Suppose a thoughtful management company wanted to simply share a small fraction of the rental income from each unit with the neighbors as an acknowledgement of the impact and a sort of payment for their unavoidable role in helping to police them. I'm guessing a lot of us, and perhaps some of the the city council, would actually misinterpret that as a bribe. Or at least be deeply skeptical of their motives. It would most likely seem wasteful to their property owners and disadvantage that management company in competing for properties to manage. It is really only our local government itself that can mitigate the inevitable impairment the various properties experience as a consequence of its policies. Forcing the handful of residents most inconvenienced by this to suffer so that all of us can enjoy a larger economy is exactly the kind of thing our government is supposed to prevent. A just society would either fix or abolish it.

Our goal is a parity of opportunity

Suppose the city set aside a tiny portion of the Transient Occupancy Taxes collected to create both a more compelling incentive for managers to avoid the complaints, and a resource that can pay residents for the damages incurred. All the city needs is a data gathering answering machine or web site to log the complaints. At the end of each year the city council could review a summary of the events recorded that year and come up with fees for each type of incident that would redirect some portion of the refund due managers to those injured neighbors.

The whole purpose of the TOT is to redress the extra costs the commercial use of residential property imposes on the city, but it does nothing to redress similar costs faced by the nearby residents. The very purpose of government is to protect our rights. The means to do so is available and the consequences of not doing so seem very significant:
  • an unavoidable nuisance befalls a very few members of our community
  • a great deal of our city council and staff's time is consumed to evaluate each application
  • a capricious, complicated, and expensive process awaits property owners seeking permits.
By setting aside a small portion of the TOT revenue to use as I describe, the city ensures it will collect the data needed to craft sensible and mechanical guidelines for evaluating permit requests. It gives the city a measure of the impact of different concentrations of transient housing, permits a more objective evaluation of the performance of management firms, and generates a map of the units most affected. These are the tools needed to craft a fair and objective mechanism to resolve these conflicts in property rights.

I'll bet the size of the cheque that affected residents end up receiving isn't as important as the knowledge that our city is tracking their complaints. Even if it was only a letter summarizing the impact on that resident and how it compares to the average it would go a long way towards making them feel heard, acknowledged, and offer hope that a fairer solution is in the works.

We should have a strategy that promises to get continuously better at mitigating the impact over the long term. We must convince residents that we are seriously committed to engineering solutions that protect all of our rights as efficiently and effectively as possible. Over a ten year period, I believe this approach will lead us to a permanent, simple, and extremely fair infrastructure for everyone involved. I'm only 54. But I've already noticed that people make a lot more progress when they cooperate rather than compete. Wise leadership finds a way to get everyone on the same team fighting the same enemy--in this case its the injustice. I believe this approach better aligns the interests of both the residents and managers.

Are there any reasonable objections?

In a discussion of this issue with someone after the meeting, he made the point that someone would have no recourse in dealing with a neighbor who's young children create a similar noise problem much more frequently. (I should note that his kids can scream at a pitch and volume that would easily drown out a smoke detector.) I don't regard this as a reasonable challenge for a number of reasons. Most notably that the TOT exposure is in addition to the normal noise of living in a small community of very densely packed housing.

But that example seems particularly inappropriate because children represent a tremendous positive externality as well--they are our future and, whether we realize, acknowledge, or even resent it--we are all part of their education. Thus we have a completely natural obligation to all children as a consequence of being adult human beings and that includes dealing patiently with issues like the noise they make. Even in the case of a recklessly inconsiderate adult neighbor, the common challenge we all face as members of a community to find ways to get along well with our neighbors seems incomparable to the uncommon burden of being forced to simply accept the consequences of the commercialization of adjacent housing.

His other objection was that it would encourage people to complain just for the compensation, and over issues they would otherwise not have considered a nuisance. I suspect this is true to some extent but would both fall off rapidly with time, and tend to reveal the unreasonable residents rather than become an intractable problem. (The city could discourage them by adopting a policy that penalized false reports by withholding the funds that person would have earned for their legitimate complaints.) I think there are also many people who don't bother to complain now because they don't like being nuisances themselves, and it doesn't really help--the noise generated by a security response might even extend the duration of a disturbance, and will almost certainly anger the visitors being interrupted and increase the potential for vandalism. A phone number where residents could leave a message (or send an email, text, or photo from a phone) without having to notify the managements security would give the city a much better idea of exactly how much impact the transient rentals are having on residents, as well as the tools needed to effectively redress that impact.

Related Information

Thursday, July 23, 2009

Using taxes to earn respect

Taxation is the single most tangible aspect of government in most of our lives. Is it any wonder we've got a love-hate relationship with our nation--loving the theory while hating the implementation? It seems insane to me because it appears so needless and harms us so much. We have the know how to reverse that merely by tweaking the geometry of our economy. Today we tax productivity the most, and consumption the least, but why? Because by doing so we are throwing away the most powerful tool we have for evolving a more robust society. And by so recklessly and unfairly levying taxes we are needlessly alienating our own citizens and hindering the growth of our own economy and prosperity.

Taxes are disincentives. They can't help but be discouraging. Given this single fact doesn't it suggest we should tax those things with large positive externalities (like productivity) less at the expense of taxing those things that have large negative externalities (like crime) more? The very success of our society completely depends on our governments ability to define and maintain a suitable marketplace, or foundation, for us to develop commerce. This is an essential part of any serious attempt to do that. I want our leadership to connect the process of paying taxes to a new mechanism designed to protect our privacy and create a new income stream for us. Because it is necessary and because it is fair.

Taxing crime and our underground economy are easy things to accomplish in our modern world. Most of us both receive and spend most of the money we ever control electronically. The system we use today gives the banks and merchants a great deal of information about us that they can and do use to look for ways to motivate us to spend more, at best. The steps our government has taken to protect us from this exploitation are so pathetically inept they do little but add insult to injury.

Defending our privacy and property

But suppose our government allowed us to keep that information to ourselves. Suppose an agency of the government effectively stood between you and every entity you do business with. The seller gets no information from you other than what they actually need (usually just the fact that you paid,) and a code that identifies the transaction for all time. You get all of the information in a form that is completely accurate and verifiably unalterable after the fact. Rather than become a source of income for merchants, that information, or parts of it, can be sold by you in an open market of entities doing market research currently with information they purchase from merchants and banks, or by your doctor to get a sense of your lifestyle, recent travels, or other relevant data. And you also get a credit rating that is calculated by the government to open standards that academia can continuously critique and refine.

Why should our government do this? Because only it can. Because only it is in a position to craft legislation that defines such an organization in a way that convinces us it can't be abused, even by our own government. Only it can declare such a payment scheme as legal tender. And only it has the responsibility to protect our property as citizens in the first place. It currently fails badly at this, if not in a technical sense, at least in spirit. We constantly fall prey to the present accumulation of information about us by private enterprises with nothing but lip service paid to redress it. Creating an artifact to represent us in commerce is a simple, cheap, and very robust way to fix that problem immediately. It does more as well, from protecting us from pricing errors and shoddy merchants, to giving us a lot of insight on whether warranty coverage is worth buying, for example.

Constructive taxation

It's one of the reasons I think taxing the black market is such a good idea, because to do it requires that a number of other protections, like the above, be engineered into the economy all of which promise to leave us with significantly less overhead by adding a lot of negative and positive feedback in logical ways. By taking this approach to taxation we can vastly simplify the overhead necessary to pay for things (for both seller and buyer) while ensuring better information is collected and that no party (buyer, seller, or government) can be as easily defrauded or exploited.

I've mentioned several things in this blog that have this property, like our medical records, that are handled somewhat recklessly today for mostly historical reasons. This is a mechanism similar to the universal health care transactor I proposed to protect and maintain the privacy and integrity of our medical records and reduce the overhead of providing medical care. Throwing in our consumption data benefits everyone significantly. It gives medical researchers more information to look for correlations between lifestyle and health. It makes the information we have to sell more valuable to scientists, market researchers, and most of all us.

You might wonder why I'm so anxious to associate taxation with protecting your privacy. It's because I believe it's the right place to begin reforming the very soul of taxation--how we experience it. I want it to become something we take great pride in and feel wonderful about paying. I think the government should be giving us awards each time we achieve a new milestone in overall taxes paid. Starting with something as simple as a t-shirt proclaiming that a grateful nation thanks you for your first $10,000 contribution, to an annual parade for whomever manages to pay the most taxes concluding with an honorary dinner at The White House. I think there should be an academic industry that studies nothing but the externalities created by the way our taxes are apportioned and how perfectly they are collected, and a department of government independent of all the others for adjusting the tax code to match spending. It is an inherent conflict of interest to allow the people deciding what and how to spend to also decide where to get the funds. That seems unwise because it can only pollute the perspective they need to objectively decide what and how to spend. Only an independent and transparent agency is fit to determine how to most fairly levy the tax burden. It's an ongoing academic issue that can only be refined via careful study.

A bill for services

The deep fix for taxation is to transform it from a vague cloud that funds government into a bundle of connections that link benefits with the party enjoying them in ways we can explore and verify. This gives us so much more than the mere ability to feel better about paying them--it helps us make lifestyle choices and craft enterprises that are more inherently synergistic. It creates a whole new way to address issues like health care, social security, and welfare. It also forces government to come clean about how it uses it's non-tax revenue (which is probably a lot more than you might expect, easily more than $500/person/year today.)

The synergies go on. When all of these things are combined new opportunities are created. For example, with this approach the income from things like leasing the nations airwaves would ultimately become a credit in our tax accounts. For a minor it can do nothing but accumulate while compounding interest. This is an asset the state could use to fund incarceration of that individual should it become necessary, or to recover damages. Or it could fund a zero interest loan for education or to buy a home. It's a better way to incentivize good behavior from citizens; a carrot instead of a stick. It if was never allowed to go higher than what it would cost to purchase an insurance policy that covered your potential future liability to society, then it would become a source of income fastest to those of us who didn't get into trouble. And protect society from the cost of dealing with those that do.

Engendering love with respect

When it is possible to see exactly how our taxes are apportioned, managed, and spent--in great detail--we will be a position to feel better about paying them. When we can see that the apportionment has been carefully crafted to be as fair as we're capable of achieving then I believe people will honestly feel good about paying them. And when we experience taxation via a mechanism that is creating an income stream for us and protecting our privacy, then I think we'll actually look forward to it as a sort of score--or measure of our value to those who don't know us.

I believe a government that defines itself as being of the people, by the people, and for the people would realize that making all taxes voluntary is a relatively easy way to ensure that happens. And such a government would look for a way to make paying most taxes collectively voluntary simply because it realized that any government that isn't loved enough by its own citizens to compel them to pay for it really shouldn't last. This is a step towards unwinding the very need for as much government as we have now because it embeds some of the function of government into the process of just doing business.

Saturday, July 18, 2009

Cornering rascals

I wish President Obama would realize that he needs to look for better ways to motivate congress. He needs to make it easier for us to directly pressure our legislature. Take health care for example. Congress's vested interest is to structure all legislation to best suit the industries that most support them. These are the ones that generate the most profits and will always be things like financial services, or insurance, and never things like health care.

To overcome this tendency Obama must find a very straightforward way to measure their performance. In the case of health care reform this seems easy. Ask the GAO for a pie chart that shows all of the things health care dollars are spent on; from doctors, nurses, and hospital administrators, to marketers, insurance brokers, financial analysts, lawyers, and lobbyists. Color every slice with either blue or red depending on whether it represents an activity that actually delivers health care. Put in on a prominent web site with the simple promise to veto any legislation that does not leave us with a significantly smaller red area--at least 25% smaller.

Directly below it there should be two pie charts, one for each party, that represent how the allocation would change under the solutions they're each proposing (according to the GAO.) That would leave them with few options but to look for ways to outdo each other cutting the fat out of health care infrastructure or risk being replaced by people from the other team in the upcoming election. He should make it easy for us to email our representatives to let them know we're watching them via the web page and do indeed intend to replace them if they lose the contest.

And he should advertise the site relentlessly begging us to let them know that this new mechanism is going to be steadily refined and gradually evolve into something that enables citizens to more objectively measure the performance of their elected representatives and find out what they are presently working on. He should challenge congress to do the same thing to him as well; find ways to objectively record the alternatives he faced for each choice made.

Finally, don't clutter any site with a lot of distractions, like ads, pleas for campaign contributions, links to irrelevant affiliates or party propaganda, etc. Keep it simple, bipartisan, and deeply focused on the specific major issues presently before congress. If you give the American people a tight enough set of reins, I'm almost certain we could get some useful work out of those unbroken beasts on the hill.

Thursday, July 16, 2009

Let's call it The Civilitary

Every year there are natural disasters and accidents all over our world that do more damage to lives and property than any other kind of external threat. Yet we spend a tiny fraction of what we spend on the military to mitigate that far greater exposure. And many of those lives are lost simply because we cannot respond massively enough, quickly enough, or lack the logistics, technology, or equipment necessary to prevent it.

At the same time we have a world of nations growing ever more intwined and interdependent economically after having emerged from a long competitive adolescence of imperialism, nationalism, and xenophobia. They seem today more like a group of young adults impatient to thrive. There is a lot of rivalry, past grudges, and ideological bickering still going on, but its as if they've realized the only lasting way to settle their differences is to prepare to make some compromises and work them out. Fighting terrorism is police work; it should never be perceived as war because that legitimizes it as a tactic when it is nothing but a heinous crime. (If you hadn't noticed, the bushwhack blowback boondoggle backfired. Badly.)

We are presently looking for clever ways to collectively rid ourselves of the most aggressive and indiscriminate weapons because they honestly have no real utility for any nation anymore. (It may only be because killing enemies indiscriminately loses some appeal when they become customers, but lets count our lucky stars no matter what the reason!)

The first generation of kids to have grown up with the internet are starting to emerge into to a world with far less respect for the ideological baggage of their cultures. They see a world filled with avenues for creativity, enterprise, and discovery rather than sufficient reasons for conflict or hatred.

And we have a military-industrial complex that represents an enormously valuable intellectual property--a highly organized, coordinated, and deeply empowered team that could build a lot more than weapons. They could apply that expertise to engineering ways to save lives just as easily as take them. Well, okay, so maybe it's not just as easy. They'll still rise to the challenge and we'll have a more valuable MIC after they've mastered engineering things like levees that can be setup in minutes, spill containment and recovery systems, emergency structure reinforcement, massive rescue/evacuation and temporary housing deployment, mine collapse recovery equipment, etc. Whatever they can imagine that would be useful to save lives or property.

We should be looking for ways to create more meaningful connections between the people of all these nations and I started this blog by noting one of them: the need for an independent international organization to hold all free elections. (I think we need it here in America just as much as Iran apparently does--I'm not convinced our elections are completely kosher.) And if we're going to build an organization that we trust enough to conduct our elections, doesn't it make sense to add emergency response and recovery as well?

The world as a whole can afford a far better response capability than any single nation. There is no easier time to overcome one's prejudices than during an emergency when something clicks and people instantly morph into something more like ants--willing to give their all to work together with someone they despised just a moment earlier. It's an amazing thing, an emergency. Because a bond formed that way doesn't break very easily. The respect earned in those moments seems to permanently undermine the ability to restore any prior alienation.

There has never been a time better suited to form an organization like the civilitary I'm trying to describe here. A sort of mirror image of the military. Instead of a bunch of competing enterprises looking for the best ways to defeat each other, they are one cooperating team of people independent of all nations and looking to protect mankind as a whole. I imagine it would be more rigorous, lower paying, and even riskier than a military career. Because we won't need a lot to attract people. A civilitary would most likely become the most sought after employment there is because of the enormous honor that serving in and later being a veteran of it would convey. If there is honor in being willing to die to defend your nation by preparing and standing ready to fight its human enemies, there must be more in taking the same steps to defend all nations and people against the many natural enemies our world periodically manufactures. I'm betting that engineering better ways to save lives is just a lot more fun than looking for more efficient ways to destroy them.

I see it as an enterprise designed to train and deploy some fraction of the world's young adults for two to six years after high school, keeping the best of them for permanent roles. For them it's an unbelievable chance to travel around the world, get to know many cultures from the perspective of an ambassador of aid, form lasting ties with other young people from all over the world, and learn skills that will remain useful all their lives. For the rest of us it's a better solution to a threat we all face every day. We benefit the most by having a lot more response for the same or lower cost. We benefit from the cross pollination of perspectives, ideas, and cultures that the returning veterans will bring back with them. There will be more marriages between peoples from different nations, and a steadily growing awareness of the entire community of mankind by all nations. It would be a large step towards engineering a new world order that finds cooperation enormously easier than conflict.

Lastly, it generates a deep and meaningful hope across mankind just by proposing it. And at a time when such a jolt would do a lot all by itself to stimulate the world's gloomy economies and spark a more intense flame to illuminate other opportunities to engineer peace. It would be many months before talks could even begin to flesh out the form and legal status of such an organization. And many years before all the treaties and physical infrastructure necessary to deploy it could be ready. But from day one the economic impact would kick in, from simply uplifting the spirits of everyone on earth, to mobilizing the entire world's current rescue and recovery infrastructure into studying how to make such a transition. And periodic stories of the progress would renew that optimism throughout its development.

The crisis in Iran proved something fundamental has already changed about our world--those lines you see on the map are beginning to fade. The vast bulk of humanity is growing weary of all the many ways our ancestors found to artificially divide us. They can see we're all the same. We all just want the opportunity to live in peace and pursue our dreams. Let's seize the genuine reasons we have to work together by more aggressively developing them.

My mother's main meme

Everything brings about its own opposite
That single idea pretty much sums up my mother's entire philosophy. I was about six or seven when I first heard it, and had no idea what the hell it could mean. But there was definitely something very special about that particular bit of knowledge and somehow that was communicated to me by the way she said it. I can't remember how I knew it was enormously real and significant to her, like a treasure. I just did.

Her home always has fresh flowers.
Sixteen pink roses on the end of a single stem all in bloom simultaneously.

I remember how much it bothered me though. How can you get anywhere if everything you head towards leaves you somewhere you didn't want to go? It seemed so unfair and irrational for the world to be this way. How could my mother drop a bomb like this so casually? I'm sure I didn't know about the word cryptic at that age, but I can still remember the resentment created by feeling short changed by all of her explanations. I could tell this bothered her more than me too. Sometimes I think my mother's greatest burden is that she knows so much more than she knows how to say.

She said it so often too, offered usually as an answer to some question I'd asked that most parents answered with god only knows. I did like her answer better than what essentially means don't bother asking because no one will ever know. And my interpretation of what it meant gradually took shape--it was a template that I could use to explain many things; like a NAND gate for the phenomenological.

I noticed the process at work almost everywhere I looked for it. From our perspective, we own our stuff and totally control it. But from our stuff's perspective, it owns us in more or less the same way. We'll do what we must to clean, maintain, house, protect, and utilize our stuff all on its terms. Likewise, and far more sobering to contemplate, with what we think we know. It seems to own us far more than we own it--it shapes the way we see things, what we'll choose to do, what will be interesting to us, all sorts of things. We are, in a very real way, the unwitting robots of whatever knowledge has taken up residence in our brains.

It is probably going to take many months or years of blogging to fully reveal the enormous impact those six words had on my life. That poem on the right was written in my late teens. But I didn't even see the connection when I wrote it. The meme had already buried itself so deeply in my consciousness that I didn't even notice the way it was organizing all the knowledge in my head. Or how it had drifted to accommodate everything I had learned. Today it's more like a loose sort of faith that most things really are deeply entangled with their opposites, and that looking for those relationships is usually a fruitful approach for understanding something well enough to model in your minds' eye. It is the most useful heuristic I know.

But there was something even more wonderful and beautiful hidden unstated in that screwball meme and reflected in everything my mother did. Its the premise that explanations for everything exist and merely need to be discovered or deduced. And that they are fully understandable and very worthy of trying to understand. It more or less forces you to be as objectively observant as you can be. It's a lot easier to have the courage to keep looking for something very hard to find if you're absolutely certain it must be there. Just ask the folks at CERN.

I started this essay hoping to explain how to leverage the utility of a mechanism that taxes the underground economy into a gentle selective pressure that leaves everyone more predisposed to find an attractive productive niche for themselves in society, but ended up only explaining how my mom's main meme made me. (They're probably opposites somehow!)

I guess I must think you're entitled to know a lot more about me if I'm expecting you to take such unusual suggestions seriously. Her name is Elliette by the way. Most people know of her from the dresses she designed and manufactured for many years mostly under the Miss Elliette label. A Google search produced 3,640 references. If you ever need either a tomato, or a picture of a tomato, she's the lady to ask.

After writing this, I asked her for some photos to put in it, and she balked out of modesty. Then, she sent me the photos above, pointing out how rare it is to have a single stem with sixteen roses all blooming simultaneously. Most of our ensuing conversation was about the flowers and tomatoes, and whether I could use the photo from the cover of her autobiography. I thought it better suited to a wikipedia entry about her company, which I plan to do when I get the facts and photos rounded up. Then yesterday someone else wrote about my mother in their blog. So I thought I should post this one now, rather than wait for a more typical photo of her since he's posted one.

Wednesday, July 15, 2009

Who we should tax first

Whomever said macroscopic things can't be entangled hasn't looked at our tax code. It is so ludicrously complex that it actually achieved independent conscious self awareness some years ago and the best we can do now is actually just fight with it. It wins every time too.

Yet despite all that, and the best intentions of our wisest leadership under advisement from our finest minds over a period of many decades and we haven't even begun to tax that which is arguably the most important thing to tax. (I want to say you're kidding me but I'm the one writing this.) I want to scream it in their ears: THE BLACK MARKET. Tax that for a change.

The Economist calculates that the world underground economy is worth $9 trillion, which is about 20% of the total. In 2000, the National Center for Policy Analysis (NCPA) estimated roughly one per dozen Americans earned a substantial part of their income underground. And that means we're each taxed about 9% more than we would be if those deadbeats just paid up.

Well, I'd like to find a way to make crime pay. At least its taxes. And I think tax avoiders should be taxed at an even higher rate than voluntary taxpayers (seeing as they're criminals and we should probably try to discourage them.) Now you might think that if we do find a clever way to tax them they'll just start using a different currency or some commodity or other means of exchanging value to avoid the tax, after all, they're criminals. But that has fairly high costs and additional risks. As long as our constructive tax is somewhat less than that, they'll accept it as the cost of doing business and we'll have created an environment less favorable to underground economic activity without needing anything fancier than a little economic geometry.

We have the technology and infrastructure already to support what is effectively an unreported income tax. Your assets are linked to your identity where the IRS maintains on oversimplified bank account for you. When you report enough income to leave you with three dollars, after the government takes their cut, it adds one dollar to your tax account. That account is used solely to pay the new unreported income tax which is a 33% tax on purchases. This all happens automatically for credit or debit card users. But even if you forget your wallet, and have to pay cash, the receipt would enable you to recover that money at a web site, even if you had to earn more income legitimately first before you could do so.

The intent isn't to punish, merely to impose a fairly high tax on the underground economy which should lead to a lot less of it, and we won't have to be doubly injured by it, since it's at least paying something significant.

Tourists, and anyone else not subject to US tax code would actually benefit as well because a more formal mechanism would be created to recover all their sales taxes as well as the new unreported income tax from their purchases. For those here illegally however life gets a whole lot more expensive.

Now why is our government even thinking about taxing its honest citizens more when it hasn't even begun to tax the dishonest ones? Is this really such a radical idea? Stuff like this makes me wonder if I really might be just plain crazy because it all seems to doable, reasonable, and wholly constructive to me. What stops stuff like this from happening?

Tuesday, July 14, 2009

25 Miles off the Coast of Indifference

If you haven't noticed already, I'm somewhat prone to spontaneous outbreaks of thoughtful musings about our nation, culture, and species. On one such occasion quite some time ago I must have emailed our state Senator, Barbara Boxer, because I received a letter from her office last Friday, July 10th informing me that a representative from her office would be in Avalon and available for me to see between 11:00 and 12:30 today (Wednesday, July 15th.)

I couldn't even remember what I'd complained about before, and don't even know if I have any basis for considering myself a part of the community just because I live in it. I don't get a paycheck from any employer here, nor own any part of any enterprise here, nor does any member of my family. I do own the home I'm living in. And am building another I hope to live in some day. (I was creamed by the collapse more than most so that's become a real challenge.) I have helped, or tried to, a few members of the community here with advice and loans and consider myself friends with many people here.

Plus Avalon is an unusual place. Many of the locals have been here for literally generations. (You'd think they were shooting for speciation.) One company, The Santa Catalina Island Company, dominates the community of Avalon because it owns most of the useful property in it (as well as every bit of the island that is not part of the Conservancy.) Most of the residents seem to have a love-hate relationship with SCICO (pronounced the island company.) I think the love part comes from the fact that this would just be a rock without the Wrigley family wealth to keep it operating with losses year after year and it really is a beautiful place to wake up every day. I think the hate part comes from the fact that the Wrigley family wealth doesn't leak out a bit faster.

It is therefore with some trepidation that I share the following letter I plan to give the representative from Senator Boxer's office later today because I don't really have standing to raise these issues. But I know people that do, and feel that someone should speak out about these issues because they really do affect us all. Even people who've never heard of Avalon or Santa Catalina Island.


I come before you today as a citizen of a community in economic crisis. Over the five years that I've lived here I've come to see why. Avalon suffers from a lack of the very lifeblood of capitalism--the opportunity to generate the goodwill value that is the hallmark of every successful enterprise.

I believe this often unnoticed aspect of our capitalistic system is what makes a community special to the people who own and work in these enterprises. Without that chance, people living here really don't have the control over their destiny necessary to plan and invest in their community wholeheartedly. Instead of being owners of their community, they are forced to be more adversarial; doing their best to get what they can each month because next month may never come. (When a large fraction of your population has an exit strategy it is a sign that your community may have a systemic problem. Or an active volcano.)

I am not trying to imply anything about the Santa Catalina Island Company (SCICO) except that by owning most of the commercial property it is difficult for them to avoid creating this situation. I know there are businesses here that are difficult or impossible to sell simply because they have no lease. I know the terms vary, and there are some leases, but it is usually just an initial lease for enough time to recoup construction costs. Most of the longstanding business seem to be month to month.

A consequence is that most of the employees work for a company they aren't quite as free to openly criticize as our national ideals suggest they should be. And a great many others work for companies that depend on friendly relations with SCICO in lieu of a lease. None of them are here with me today, but I know of some that wish they could be. It simply isn't worth risking their business, or jobs, or working environment to complain about because they don't see a remedy.

I want to make it clear that I've never even heard a rumor that SCICO abuses or does anything that might be considered exploitive of their enormous political and economic power here. I do not see them as villains in anything but the unavoidable consequences of their heritage and size. Avalon is like a lifeboat designed for 24 people. You could accommodate one or more people that weighed two to four times average by leaving some of the seats empty and balancing the load. But one person that weighs 10 to 20 times average renders the entire lifeboat unusable by everyone else regardless of how accommodating that huge person is struggling to be.

A few years ago the Justice Department attempted to get Vons to sell the smaller of their two locations here because it determined they were exploiting the community. Vons has that monopoly still because no one could compete without having the other location and necessary other infrastructure it takes to operate both. I remember this well because I was part of a group bidding for the site to open a competing market. SCICO wasn't interested in selling the land, just a 6 year lease that would have made it difficult just to recoup the cost of redeveloping the site from a run down annex type location to a full market. The only reason we were even considering it was because we felt connected enough in the community to make up for the inherent disadvantages of competing with such a large and well established market.

I believe the Justice Department missed the forest for the tree. The only reason Vons has no competition is because only SCICO owns enough commercial property to host a market large enough to compete with Vons and they aren't presently looking to fill any of that property with a market. If the commercial property was more widely owned then the use it was put to would better serve the community rather than the very gradually evolving agenda of SCICO.

I don't particularly like the remedies that government has for situations like this. But I believe the damage is real and quite serious. It undermines the will of the citizens of Avalon to develop a plan for their collective future. It limits the opportunities Avalon offers for entrepreneurs to create new businesses and develop a more diverse economy here. It makes our town less attractive to the most empowered and capable of people because there are such limited opportunities to deploy their talents. As they leave, our schools lose the parents with the most resources and time to participate in the educational process. Our children lose the role models most likely to inspire them to appreciate the utility of knowledge, attitude, and determination.

There is no good reason for this to be the case. The inherent potential of Avalon to become a profitable place to live and work, and an extremely attractive community to raise a family is enormous. We are so close to so many people who would appreciate a simpler lifestyle, not even needing a car, a healthier environment, and vastly more time to spend doing wholesome things together with their families. The internet has created many opportunities to earn a good living working from home. Many of those individuals would choose to live here if we hadn't passed that critical threshold where the infrastructure becomes a deciding factor. The school simply has too few children of upper and middle class families for most parents in that category to feel comfortable. I know of two cases specifically where it was exactly this issue that prevented one family from moving here and was a big factor in motivating another to leave.

An in depth study of our economy would reveal many of these externalities and explain why Avalon falls so far short of its potential to enjoy a vibrant growing prosperity. Being so isolated we are well suited to be carefully studied and could become a useful laboratory for exploring alternative strategies for everything from primary education to best incentivizing greener lifestyles and preventative medicine.

I believe our state and nation is facing many challenges but they all boil down to a single fundamental reality: our greatness as a society flows from our ability to harvest more of the competitive productive spirit of our humanity than other nations can from their humanity. We know that arming our children with the best education we can, the freedom to follow their passions, and the opportunity to keep their wealth is all it takes to end up with highly motivated and empowered citizens doing wonderful things for each other. Avalon is a place where all parts of that process can be carefully studied and where ways to improve, better incentivize, or even more wisely use taxes and subsidies can be explored and measured. I believe a very small project for California or America would yield enormous benefits for all of humanity by revealing more cost effective ways to better empower people to breath life into their dreams. I think it would help us develop better ways to measure both the positive and negative externalities of all enterprises and thereby reveal more elegant strategies to encourage the positives and avoid the negatives in communities all across our nation.