Good and Bad Competition

     I have noticed the term "social Darwinism" popping up in
the news.  Social Darwinists claim that in free competition the
most capable will out produce the less capable causing the less
capable to parish.  The social Darwinists fail to distinguish
between the two types of competition.

     Competition can be either productive or destructive. 
Destructive competition is worse than a zero sum game.  When
competitors destroy the wealth of the other competitors, on
average everyone ends up with less then they started with.

     Total war is the extreme example of destructive
competition.  Any competition to take from others is destructive. 
The victims end up with less.  The "winners" gain less than the
victims lose.  The cost of taking the loot consumes part of the
loot, often most of it.

     The US government welfare system consumes over 70
percent of the wealth taken to aid the poor.  In other words, the
welfare system provides more than twice as much in benefits to
those who run it as it provides to the poor.

     Government is the realm of destructive competition. 
Uncountable special interests use government to destructively
compete for wealth produced by others.

     As this competition increases, it drains effort from
production.  The competitors for what is produced by others
inevitably end up competing for an ever decreasing pool of
wealth.  In the end the weak will inevitably parish.

     Productive competition is a horse of a different color.  In
an environment of liberty, individuals compete to out produce
each other.  Some may try to out produce everyone else.  Others
may compete mainly with themselves.  Primarily they seek to be
more productive than they were.  They don't worry about how
productive others may be.

     The more we produce for others, the more others will
give us in exchange.  This motivates us to compete to increase
what we produce for others.  Yes, this is totally selfish.  Who
should care when everyone benefits?  Failure to recognize how
we all benefit from the selfishness of others often leads
individuals to act against their own best interests.

     Even those who fail to increase their productivity are no
worse off than before.  They may be relatively worse off when
compared to others.  In absolute terns they haven't lost a thing. 
The farmer whose corn production is stuck at 100 bushels per
acre doesn't have less corn merely because another farmer
increases his yield to 150 bushels.

     When the more successful producers invest their
increased productivity in facilities that increase the productivity
of others, those others are better off, rather than worse off. 
Productive competition doesn't drive anyone to extinction.  It can
only aid the survival of all.

     There is another point worth noticing.  When the more
successful producers increase their productivity, they have more
that they can, and often do, donate to aid the less successful
producers.

     For most of history, competition was more destructive
than productive.  A few rulers and slave masters grew wealthy
by forcibly taking from others.  Competing tribes battled to take
from each other.  In this world of destructive, government style
competition, life was cruel, brutish and short.

     The industrial revolution, which still continues, is
powered by productive competition.  Competing to increase our
productivity and service to each other has lifted us to by far the
highest productivity and standard of living in the history of the
human race.  Out producing your neighbor doesn't beggar your
neighbor.  It benefits him.

     The total insanity of social Darwinism is that its
advocates seek to replace the productive competition of free
people with destructive, government based, competition among
special interests.  It is the social Darwinists that have embarked
on a course of action that threatens the survival of the least
successful producers, and everyone else.

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Copyright 2013
Albert D. McCallum

The Right Man

     Imagine that every state in the country has a shortage of
electricity.  The people cry out to Washington, D.C. for more
electricity.  But, D.C. had no electricity.  D.C. wants to help.  It
builds power lines to every state to supply the needed electricity.

     Then D.C. builds a second set of line for the states to
send electricity to D.C.  Electricity flows from the states to D.C.
and back to the states.  Still the people complain that they need
more electricity.

     D.C. builds more lines.  Eventually all the electricity in
the nation flows to D.C. for retransmission back to whence it
came.  As a result every state has less electricity due to the
losses during transmission.  In addition (or, perhaps subtraction)
the people had to pay for building and operating the lines.  D.C.
didn't have any wealth of its own to use to build the lines.

     Still the people complain, some louder than others.  The
states who shout the loudest convince D.C. to send them more
electricity.  D.C. then diverts electricity from the states that
produce it to those who don't.  This pleases the recipients while
only further impoverishing the losers.

     A high paid consultant in D.C. finally comes up with a
miraculous solution.  Only in D.C. would the solution be
considered a solution.  The plan was to make the collection and
distribution so complex and confusing that D.C. could convince
the people that they were all getting back more electricity than
they sent.

     The plan worked.  Even as the lights flicked and went
black across the nation, the people ever demanded more juice
from D.C.   They also refused to even think of the possibility of
taking the D.C. middleman out of the power loop.

     Everyone knew they were totally dependent on D.C. for
electricity.  Without the electricity from D.C. everyone knew
they would starve, and freeze to death in cold, dark basements. 
The determined citizens were sure that incompetence and
corruption on the part of those who operated the system were the
only problems.  Nothing else stood between the people and
Utopia where abundant, free electricity and honey flowed to all.

     A "reformer" cried out to the people in their most
desperate hour.  "There is hope.  We can throw out the nay
saying greedy crooks and bring abundant electricity to all.  Trust
me.  I will change everything for the better."  The people
shouted "Hosanna."

     Only one man raised his voice to question.  "Where will
the electricity come from?  Who will pay for it?"  The people
hated this man.  He wanted to deny them admittance to Utopia. 
A screaming mob poured into the streets surging toward the
home of the evil one who dared to question the plan for Utopia. 
When the sun rose his body dangled from a tree.  No one ever
again raised a voice in opposition.

     The man of hope went to D.C. while the people cheered. 
Soon some noticed something was wrong.  The lights faded even
dimmer.  The people felt betrayed.  A new voice proclaimed,
"The man of hope is a charlatan.  Only I can clean up the mess
in D.C. and make your lights grow bright again."  Once more
the people shouted "Hosanna."

     Alas, the new last, best hope failed to brighten the lights. 
The lights continued to dim.  Still the people never lost their
faith in D.C. and Utopia.  Even as they lay starving and dying in
their cold, dark basements the people still dreamed that before it
was too late the real man of hope would rise up and solve the
problems that prevented wise rulers from opening the doors to
Utopia.

     The people went to their rewards clinging to the belief
that D.C. could have saved them, if only the right man had
arrived in time.

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Copyright 2013
Albert D. McCallum

Where Does Butter Come From?

     I found a quart of heavy whipping cream in the
refrigerator.  It had expired over a month ago.  My wife
pondered what to do with a quart of sour cream.  I wonder how
many people would simply throw it out.

     I said "Why not make butter?"  How many people have
ever seen butter made the old-fashioned way?  When I was a
young boy I watched Grandma make butter.  Sometimes I helped
by pumping the dasher in the churn.

     My grandparents had a small farm.  As was common in
the area, the farm included a small dairy heard.  By today's
standards the heard was infinitely small, five to eight cows.

     The cows would freshen (for city slickers that means they
had calves and started giving milk) in February or March. 
Caves have to eat.  My grandparents didn't want to use up whole
milk feeding calves.

     At each milking Grandma saved out a couple of quarts of
milk in a pan for each calf.  The pans set on the pantry shelf for
a couple of days.  The cream came to the top.  Before feeding
the calves Grandma skimmed the cream from the top of the
pans.

     The calves got skimmed milk mixed with a powder
supplement called "Calf Manna."  The cream went into a crock. 
Twice a week Grandma churned the then sour cream into butter.

     The churn was a crock five gallons or so in size.  It had
a wooden cover with a round hole in the top for the dasher
handle.  The handle had a wooden X on the bottom.  Pumping
the handle up and down stirred the cream causing the butter to
float to the top.  Pumping the churn was fun, for a while. 
Sometimes the butter took at least forever to separate.  Adding
some cold water to the cream aided the separation.

     After the butter floated to the top, Grandma skimmed it
off and put it in a wooden butter bowl about a foot and a half in
diameter.  She then added cold water and used a wooden butter
paddle to work the water through the butter.  This washed the
butter milk out of the butter.  The final step in the bowl was
adding coloring, if needed, and salt.

     Grandma then formed the butter into one pound bricks
with her butter mold. It was a wooden box just the right size to
hold a pound of butter.  It had a plunger in the top to push out
the brick of butter.

     The natural color of butter is anything from orange to
white.  The color of the butter also depends on the color of the
cow.  Different breeds of cows produce different colors of butter. 
When the cows were on green grass in the spring, the butter was
very yellow to orange.  In the dry summer the butter was nearly
white.

     Armed with all this knowledge I was ready to make
butter.  I didn't have a churn handy.  A mere quart of cream
would have gotten lost in a churn anyway.  My wife set up her
mixer and put the aged cream in the bowl.  I put the mixer on
low and let it rip.

     A few minutes later a thick scum was forming on the top
of the bowl.  I stopped the mixer.  The final separation required
a gentler agitation.  I worked it with a spoon.  Soon the butter
was separated.  I skimmed it into a bowl and worked cold
water through it a couple of  times to rinse out the buttermilk.

     I had over a half pound of very pail yellow butter. 
Disregarding the half hour or so I invested in "Project Butter,"
that beats pouring the cream down the drain.

     The survivalists who are planning to survive the collapse
of civilization might want to add this column to their scrap
books.

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Copyright 2013
Albert D. McCallum

How Much Should the Rich Give to the Poor?

     Last time we plunged into the consideration of inequality. 
We saw that it is impossible to measure and compare the real
wealth of one person to that of another.  Real wealth is
measured by use value, not market value.  Use value isn't
measurable.  We also saw that individuals' real wealth, their
satisfaction, is often increased by tangible wealth that belongs to
others.

     Suppose that a wealthy person invests $50 million in a
factory.  The workers at the factory earn 20 percent more than at
their old jobs.  Those who build the factory and those who
supply the factory and distribute its products also gain increased
income.  The factory owner has used his wealth in a way that
clearly increases the tangible wealth of others.

     We can reasonably assume that many of these others also
enjoy increased satisfaction.  Why would they work for the
factory if they didn't find it more satisfying than their next best
option?

     Suppose instead of building the factory the wealthy
person gave the $50 million to the poor?  In the short term the
poor would have increased tangible wealth.  Very possibly this
wealth would contribute to increased satisfaction.

     When poor people gain wealth, they spend most of it.  As
a result of the gifts, society as a whole ends up with less
investment.  This means lower production and lower average
incomes in the future.

     Are the benefits from the immediate satisfaction gained
by the poor worth more than the cost of satisfaction lost in the
future?  Satisfaction being unmeasurable, this question cannot be
answered.

     One thing is certain.  If all saved wealth was given to the
poor (either voluntarily or through government force) and
consumed, all investment would soon be consumed.  Eventually
there would be no factories, equipment or tools for workers to
use to increase their productivity.

     The few people who survived would be barehanded
hunter-gatherers attempting to live off what nature produced. 
The result would be nearly equal poverty at a level well below
what most poor people enjoy today.   I doubt that many people
would consider this stride toward material equality a good idea.

     Even then the survivors would not "enjoy" true equality. 
Some places the bounty of nature is greater than others.  Some
individuals would be better at living off nature than others.  Not
everyone would have equal abilities to hunt and gather.

     If the wealthy reduce their consumption and give to the
poor, long term productivity will not be hampered.  It is most
unrealistic to assume that all, or even most, charity by the
wealthy will be cut out of their consumption rather than their
investment.

     Thus, charity inevitably decreases future production and
the capacity for charity in the future, unless the charity increases
the productivity of the recipients.  If the poor simply consume
the gifts, the capacity for future gifts will be reduced below what
it could have been.

     We won't slip into the economic death spiral until we
reach the point that charity decreases net investment.  A smaller
increase in net investment will still provide for increased, or at
least sustained, production.  The one certain thing is that
committing charity that reduces net investment will eventually be
an unmitigated disaster for everyone.  Such charity is the
equivalent of giving away and eating the seed corn.  In the long
run, even the poor will benefit more from investment than from
gifts.

     I can't even suggest an ideal level of charity.  Setting an
ideal level of charity involves value judgments that will very
from individual to individual.  It would also require more
knowledge about the future than any, or all, of us can possibly
have.

     The only promising option is to leave the choices about
charity up to each individual.  When we did this in the past the
results were far better than most people realize.  With the
increased wealth produced today, there is every reason to expect
the results would be even better.

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Copyright 2013
Albert D. McCallum

The Quest for Equality

     Many people worry about inequality.  They claim some
control far more wealth than others.  Supposedly those who
control more wealth are better off.  The next step in this
reasoning is that it is unfair that some are better off than others. 
The final step in the chain of thought is that someone must
intervene with force to end the inequality.

     Before we can even consider equality we must find a way
to measure it.  The knee jerk way to measure equality of wealth
is to compare the market values of what each person owns.  It
may come as a surprise to some that market value doesn't
measure what things are worth to those who use them.

     The one thing we all seek is to increase our satisfaction. 
      We value each thing based on how much we expect it will
contribute to our satisfaction.  We always value our things more
than what we pay for them.

     Bob trades a loaf of bread to Egbert for a dozen eggs. 
The loaf of bread is the exchange price Bob pays.  Bob wouldn't
have traded unless he believed that his use value of the eggs was
greater than his use value of the bread.  Likewise Egbert
believed that to him the bread had a greater use value than the
eggs.

     In neither case do we have any way of knowing how
much the use value exceeded the exchange value.  If necessary,
perhaps Egbert would have given three dozen eggs for the bread.
Or, perhaps he wouldn't have given even one more egg.
     All we know for sure is each individual believes the use
value of the things he keeps is greater than their exchange value. 
If the exchange value was greater, he would sell.

     An individual may own something that has a very small
exchange value.  Yet, he refuses to sell it for a very high price. 
All this means is that the individual places a larger use value on
something others value far less.  If the owner refuses to sell a
trinket for a million dollars, he expects the trinket to bring him
more satisfaction than he could buy with a million dollars.  To
him the trinket is worth more than a million dollars.

     There is no way to measure the use value.  The most we
can do is observe that an individual places a greater use value on
one thing than another.

     We have no way of measuring and comparing the use
value on one person's wealth to another's.  Thus, there is no way
to measure wealth and declare that one person has more wealth
than another.  Considering that the most satisfied person has the
most of what he really wants, the most satisfied person is the
wealthiest person.  There is no way to measure and compare
satisfaction.  It is futile to pursue equality of wealth when we
can't even recognize it if we see it.

     There are other important points ignored in the pursuit of
equal wealth.  Individuals gain satisfaction from wealth they
don't own.  That satisfaction is just as real as satisfaction gained
from their own wealth.

     Who hasn't enjoyed the sight of flowers, Christmas lights,
or great architecture, etc., none of which they owned?  The
owners of these things either deliberately, or incidentally, use
their wealth to provide satisfaction to others.  This satisfaction is
a benefit to those who enjoy it.  It doesn't add one cent to their
measurable wealth.  Measurement of wealth will tell us that the
so called poor and the so called rich are still as unequal as ever.

     One thing is certain.  If the owners who incidentally
provided satisfaction to others were deprived of their wealth, the
others would be deprived of satisfaction.  Those others might
even be deprived of more satisfaction than were the owners who
lost their property.

     Next time we will consider whether the rich giving to the
poor helps or harms the poor.

aldmccallum@gmail.com
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Copyright 2013
Albert D. McCallum

Who's the Boss?

     An employer hires an employee to manage some of the
employer's interests.  The employee appears trustworthy and
reliable.  Still, caution is always warranted.  The employer
installs cameras and recording devises to monitor the employee
on the job.

     The employee doesn't trust his employer either.  Besides,
the employee would like to keep his misdeeds secret.  If the
employee can dig up some dirt on the employer, it could be
useful to the employee if his misdeeds threaten to get him fired.

     The employee sets up his own surveillance.  He even
hires a detective to spy on the employer.  The employee goes
through his employer's private files.  Then the employee steals
some of the employer's cameras and batters a camera technician
in the process.

     Someone is in big trouble.  The employer orders the
unfaithful employee to leave and quit spying and otherwise
violating the employer's trust.  The employee refuses to leave or
mend his ways.

     Instead the employee files a complaint against the
employer.  The prosecutor files charges and the employer is
arrested for violating the employee's privacy.

     Some may consider this hypothetical to be silly,
ridiculous and outrageous.  Outrageous it is. Silly and ridiculous
it's not.  It is ridiculous that it is happening every day.  It is silly
that so many people don't seem to care.

     The teachers in government schools tell us about
government of the people by the people and for the people.  We
are supposed to believe government works for us.  Government
and its agents are our employees.  Laws and union contracts
made possible by laws make it all but impossible to fire those
teachers, no matter how disloyal or incompetent they may be.

     In some states it is a crime to photograph police working
in public.  Elsewhere the police merely beat up photographers
and take the cameras.  Who is the boss, we the "employers" or
our "employees?"

     Politicians, bureaucrats, and their minions have hissy fits
if we the people ferret out some of their secrets about their
misdeeds.  In their eyes they, the employees, have been wronged
by the employer's misdeeds.  Under laws enacted by the
"employees" the "employers" must be punished.

     Meanwhile government endlessly invades what used to be
our private lives.  Nothing is private from government.  It steals
E-mail, phone calls, and anything else it can get it mitts on.  It
puts a tracking device in your cell phone so it can track your
every step.

     If you have an interactive television, government has
software for secretly turning on the camera and watching you in
your living room, bedroom or any place else you have an
interactive television.  One reporter said he was going to put
tape over the camera anytime he wasn't using it.  Expect
government to make it a crime to tape the camera.

     Naturally the first and foremost purpose of laws made by
government is to protect government.  Thus, we the people have
no privacy or secrets.  If we somehow violate government's right
to keep its misdeeds secret, we are criminals.  Sorry, I forgot for
a moment.  Government makes the rules. Thus, by definition,
there is no such thing as a misdeed by government and it agents,
unless that deed is somehow detrimental to government.

     The idea of government secrets is troublesome.  Servants
don't have the right to spy on and keep secrets from the master. 
Masters aren't punished for checking up on their servants.  The
mere existence of the right of government to punish citizens for
violating government's secrecy puts the lie to the idea that
government serves the people.

     Government secrecy should be limited to a few narrowly
defined instances.  Even in these cases no one should be
punished for discovering and publicizing government secrets.  It
should be a crime for anyone to try to keep government
wrongdoing secret.  Government secrecy undermines any chance
we have to protect ourselves from out of control government and
hold it accountable.

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Copyright 2013
Albert D. McCallum

Is Our Civilization Sustainable?

     Many people worry and fret about environmental
sustainability.  They are sure we are headed for destruction and
disaster because of environmental excesses.  They warn that we
face doom from depletion of resources, pollution, global boiling,
etc.  The more shrill among them are certain that disaster will
strike little beyond the middle of next week.

     We do face a sustainability crisis.  Every past civilization
has faced the same crisis. It isn't particularly encouraging that
most, possibly all, past civilizations have self destructed because
they were unsustainable.  It wasn't their physical environment
that was unsustainable.

     Like with past civilizations, our present social-political
environment isn't sustainable.  Humans are social.  We live,
work and play together.  For this to work and endure we must
trust each other and get along with each other.

     All friction among individuals tears at the fabric of our
social-political order.  The fabric of a strong social-political
order can withstand quite a bit of stress.  It isn't indestructible. 
People can't interact without some tension and stress.  Even the
best of families have disagreements and quarrels.

     The larger the group, the greater the potential for friction
and stress.  The question that should concern us most is, How
can we keep the friction and stress down to a level that doesn't
threaten the sustainability of our civilization?  Mostly we ignore
that question.

     In the struggle to sustain our civilization and prosperity,
environmentalism is a distracting sideshow.  If we don't radically
change our ways, our physical environment will long survive the
implosion of our social-political environment.

     A sustainable social-political environment depends on
voluntary cooperation.  Individuals must be self regulated. 
Constructive self regulation will occur only if individuals see
that they will benefit from it.

     If most individuals believe they can benefit from stealing,
lying, and punching out their neighbors, they will steal, lie and
punch.  Constructive voluntary cooperation is impossible in such
an environment.

     The first step to preserving our social-political
environment is to recognize how everyone gains through
peaceful, voluntary cooperation.  The key is recognizing that we
are traders who depend on trade for almost everything we have. 
We produce for each other.

     For this to be sustainable everyone must benefit from the
exchanges.  Exchange extends far beyond commercial trading. 
Exchange permeates everything we do.  Social interactions are
an endless succession of exchanges.  We socialize with each
other.  Both commercial and social exchanges must be peaceful
and voluntary to be sustainable.  One person or group using
threats and force in any relationship destroys long term
sustainability.

     Spontaneous order where each individual seeks to
maximize his gain in voluntary cooperation is the only system
that works.  It works when each individual realizes that to
increase what others provide him, he must increase what he
provides for others.  We all end up voluntarily serving each
other.

     No one wields a club to make this happen.  The only
way we can sustain our social-political environment through
voluntarily cooperation is to allow liberty for everyone.  No one
is a master.  The only role for threats and force is to prevent
aggression and exploitation.

     Unfortunately we are headed in the opposite direction. 
Ever expanding government is  the opposite of voluntary
cooperation.  It is "Do it my way, or I will hurt you."  The
powerful gain in the short term.  The weak lose.  When the
unsustainable system crashes, everyone loses.

     Unless we stop government, it will destroy voluntary
cooperation and shred the fabric of our civilization in the
process.  No society built around big government and its endless
use of threats and force is sustainable.

aldmccallum@gmail.com
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Copyright 2013
Albert D. McCallum