Erik Falkenstein makes a lot of important points in this commentary on Thomas Piketty (via Isegoria). The whole post is highly recommended.

To pick up on just one of Falkenstein’s arguments here, he explains:

Most importantly for [Piketty’s] case is the fact that because marginal taxes, and inheritance taxes, were so high, the rich had a much different incentive to hide income and wealth. He shows marginal income and inheritance tax rates that are the exact inverse of the capital/income ratio of figures, which is part of his argument that raising tax rates would be a good thing: it lowers inequality. Those countries that lowered the marginal tax rates the most saw the biggest increases in higher incomes (p. 509). Perhaps instead of thinking capital went down, it was just reported less to avoid confiscatory taxes? Alan Reynolds notes that many changes to the tax code in the 1980s that explain the rise in reported wealth and income irrespective of the actual change in wealth an income in that decade, and one can imagine all those loopholes and inducements two generations ago when the top tax rates were above 90% (it seems people can no better imagine their grandparents sheltering income than having sex, another generational conceit).

The much-demonized ‘neoliberal’ tax regimes introduced in the 1980s disincentivized capital income concealment. (Falkenstein makes an extended defense of this point.) In consequence, apparent inequality rose rapidly, as such revenues came out of hiding (ἀλήθεια) into public awareness / public finances. The ‘phenomenon’ is an artifact of truth-engineering, as modestly conservative governments sought to coax capital into the open, within a comparatively non-confiscatory fiscal environment.

Continue Reading

American higher education is “primed for creative destruction” notes The Futurist:

Student loan debt has tripled in a decade, even while many universities now see no problem in departing from their primary mission of education, and have drifted into a priority of ideological brainwashing and factories of propaganda. Combine all these factors, and you have a generation of young people who may have student debt larger than the mortgage on a median American house (meaning they will not be the first-time home purchasers that the housing market depends on to survive), while having their head filled with indoctrination that carries zero or even negative value in the private sector workforce.

rkhs put up a link to this (on Twitter). I suspect it will irritate almost everyone reading this, but it’s worth pushing past that. Even the irritation has significance. The world it introduces, of Internet-era marketing culture, is of self-evident importance to anyone seeking to understand our times — and what they’re tilting into.

Attention Economics is a thing. Wikipedia is (of course) itself a remarkable node in the new economy of attention, packaging information in a way that adapts it to a continuous current of distraction. Its indispensable specialism is low-concentration research resources. Whatever its failings, it’s already all-but impossible to imagine the world working without it.

On Attention Economics, Wikipedia quotes a precursor essay by Herbert A. Simon (1971): “…in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.” Attention is the social reciprocal of information, and arguably merits an equally-intense investigative engagement. Insofar as information has become a dominating socio-historical category, attention has also been (at least implicitly) foregrounded.

Attention Economics is inescapably practical, or micro-pragmatic. Anyone reading this is already dealing with it. The information explosion is an invasion of attention. Those hunting for zones of crisis can easily find them here, cutting to the quick of their own lives.

Continue Reading

Among the very many reasons to revere Jim is that he doesn’t mess about.

There’s a sizable constituency on the ‘alt right’ whose self-understood differentiation from the Marxist left is entirely reducible to its own heightened appreciation for authoritarian hierarchy and racial solidarity. Since actually existing Marxist-Leninist regimes have been, uniformly, authoritarian-hierarchical ethno-nationalists, this isn’t in fact the basis for any real difference at all.

ADDED: What I’m seeing —

Rx: "Capitalism has to be crushed beneath the boots of the state." NRx: "That sounds like communism." Rx: "HAVE YOU EVEN READ EVOLA!?"

— Outsideness (@Outsideness) June 28, 2014

Robert Zubrin’s intense (and appalled) discussion of Alexander Dugin’s revolt against the New Atlantis climaxes:

In short, Dugin’s Eurasianism is a satanic cult.

Despite inevitable NRO simplifications, it’s a gripping read throughout.

(Much of interest also in the obstreperous comment thread.)

ADDED: Gregory Hood on Zubrin on Dugin.

Some sound advice from Post-Nietzschean: When listing the central organs of the modern structure, be careful not ignore the PR industry, post-vocational higher education (“crapademia”), and para-administrative organizations (“NGO-i-stan”). This type of sociological concreteness represents an important theoretical development pathway.

(via (via))

ADDED: The latent topic here is NRx blog-ecology. It looks as if Post-Nietzschean has already burnt out (last post in January). If this one fizzles I’m going to throw some kind of epic tantrum.

Not a new point in this neck of the woods, but formulated with exceptional elegance:

There are only two possibilities regarding the Constitution of the United States. One is that it is working as it was intended, in which case it is a monstrosity. The other is that it was broken somewhere along the way – in which case it failed.

The prod back to this topic is appreciated, because it really hasn’t been properly processed yet. (This blog has yet to do more than stick a tag on the problem.) Insofar as constitutions are at least partly functional, they are involved in the production of power. As abstract engineering diagrams for regimes they should no more be expected to rule than rocket blueprints are expected to blast into space — but they matter.

Continue Reading

Adam Gurri on Diane Coyle’s new book GDP: A Brief but Affectionate History:

One thing I personally came away from Coyle’s book with is the feeling that NGDP targeting and similar notions are probably a bad bet. Depending on what particular recipe has been agreed upon for calculating GDP, policy can easily end up optimizing to very unproductive ends. For example, Coyle mentions how changes in the recipe ended up far overstating the financial sector’s component. The larger the component of GDP the financial sector makes up, the more likely the government is to bail out big firms to prevent a big collapse — after all, the further headline GDP falls quarter over quarter, the more incumbent politicians sweat about losing their seats.

This blog has already dismissed macroeconomic aggregates as politicized ‘garbage‘ — so I agree.

It’s hard to tell from this short review whether Gurri sees the search for “a better proxy for welfare” as worthwhile or hopelessly Quixotic. Regardless, with utilitarian distractions firmly side-lined, it would be intrinsically valuable to arrive at a realistic measure of economic performance (i.e. improvement in productive capability), to provide guidance for systemic auto-correction. It’s well worth recalling how radically inadequate GDP is for this function.

ADDED: Related conundrums raised in James K. Galbraith’s review of Piketty — measuring capital is difficult.

ADDED: Scott Sumner vs Larry Summers (not an agonizing choice). This is good: “I’m a right wing liberal because I have a counterintuitive view of the world …”

ADDED: Scrap the CPI.

F. Roger Devlin reviews Gregory Clark’s latest book The Son Also Rises: Surnames and the History of Social Mobility at American Renaissance:

China, which saw enormous social upheaval in the 20th century, provides yet another perspective. Under Mao, much of the country’s elite was killed or exiled. The rest were subject to discrimination and excluded from the Communist Party. During the Cultural Revolution, Mao tried to turn the social scale upside down by shipping prominent people to the countryside to work in rice paddies. If political intervention can create higher social mobility, it would have done so in China.

Yet once discrimination against “class enemies” was abolished shortly after Mao’s death, those with surnames characteristic of the pre-communist elite quickly began to rise again. Today, they are greatly over-represented even in the Communist Party. Those descended from the “workers and peasants” favored under Mao have quickly seen their status erode. Recent social mobility in China has been no greater than it was under the Emperors.

Anyone who doesn’t find their presuppositions shaken by Clark’s work is probably not paying attention. If those out here in the NRx think it conforms neatly to their expectations that heredity is strongly determining of social outcomes — are they comfortable proceeding to evidence-based acknowledgement that socio-economic regime-type seems entirely irrelevant to the (uniformly low) level of social mobility? Clark himself draws the curve-ball conclusion: so why not be a social democrat? It’s not as if rational incentives make any difference anyway.

(I’ll be looking for the opportunity to dig into this stuff at least a little, as soon as I catch a moment.)

Thomas Piketty’s Capital in the Twenty-First Century argues that the normal tendency of capitalism is to increase inequality (the book has a link-rich page here, eleven reviews here). It’s not a theoretically-ambitious work, but it gets to the point, well-supported by statistics. The simple, Zeitgeist-consistency of the thesis guarantees its success.

Because Piketty’s claim is casually Marxist, the impulse on the right is to attempt a refutation. I very much doubt this is going to work. Since capital is escalating at an exponential rate, while people definitely aren’t (and are in fact devolving), how could the trend identified by Piketty be considered anything other than the natural one? Under conditions of even minimally functional capitalism, for sub-inert, ever more conspicuously incompetent ape-creatures to successfully claim a stable share of techonomic product would be an astounding achievement, requiring highly artificial and increasingly byzantine redistribution mechanisms. No surprise from Outside in that this isn’t occurring, but rather a priori endorsement of Piketty’s conclusion — only radically anomalous developments have ever made the trend seem anything other than it is.

Continue Reading