The point of this series is to make clear how the world has changed for the better since innovation and trade have taken off to provide increasing amounts of “More”, while the old standby of taking it from others ultimately results in “Less.” The problem is we either have to commit to adapting to a changing world with greater flexibility and efficiency or get caught in the downward spiral of government-directed economies invariably get snared. More government direction and you go down the road to “less.” The leaders promise “More” and maybe initially deliver by taking it from some and giving it to supporters, but ultimately they can’t adapt quickly enough and fall behind. The people get restless. The leaders grow fearful and clamp down on dissent. Maybe, aggressive foreign ventures are taken to distract from the leader’s failures. Sanctions for these actions or human right violations follow adding to the economic distress. The country is forced out of normal trade as unreliable in any supply chains. The economic situation gets even worse and the leaders have to be even more repressive. On and on it goes. Unfortunately, this is the history of every modern top-down government. If we wish to avoid this horrible fate we need to take certain steps:Continue reading
Never in human history has the average human had “More.” Capitalism if left alone to continue to work its magic promises to bring even “More” to everyone allowed to participate. Only where economies are increasingly run by top-down dictates is the human condition deteriorating. Yet as we have seen this highway to more is threatened both at home and abroad. Even China where allowing capitalism rum a major part of its economy brought a billion people out of abject poverty is reasserting top-down control. No wonder its growth rate is slowing in line with every turn of the screw. We know where this leads, increasing oppression and, of course, “Less.” At home, we have a large part of our populous favorable to socialism and outright hostility to capitalism. To understand this strange reaction to a system that has provided everyone with far “More” than our forebearers ever dreamed possible, Joseph Schumpeter (1883-1950) gave us some insight. The economist popularized the phrase “Creative Destruction” to describe the dynamics of market capitalism and how its disruptive the forces of innovation undermined norms. With the widespread change, some suffer near term loss but overall most gained. He lauded the entrepreneurial spirit of the capitalists, but thought the loss of equilibrium would cause socialism to win out in the end. He based this on the hostility of intellectuals on one hand and workers on the other. He couldn’t have been more wrong. As we’ve shown, socialism and every other top-down system have proven to be an utter disaster. As it turns out the equilibrium under these systems is upset but not in a good way. However, this hasn’t quashed the hostility among many intellectuals and workers.
Today’s intellectuals are the direct descendants of the small number of literate elites topping the heap all over the world for all those centuries prior to 15th. Whatever “More” there was to have belonged to them. They were the military leaders, the governors, the lawmakers and keepers, the bureaucrats running most everything, the repositories of whatever passed for knowledge and the intermediaries to the gods. The vast majority of humanity was just dust beneath their feet. The uncouth deplorables were put on earth to serve their betters. They only suffered merchants and artisans to provide them with the good things of life. They were the top of the human pyramid. The commercial class had to kowtow and often bribe these officials in order to survive. This still exists but much more muted in liberal capitalist countries. As commerce grew and entrepreneurs prospered, the intelligentsia had to share power and place. They are not happy.Continue reading
n our last post, we laid out how old-style top-down governments cannot keep up in a world where change can come from anywhere at any time. Lumbering bureaucracies must become increasingly repressive to maintain the control that has only provided “Less”. Moreover, you can’t be part of a worldwide trading system and supply chain while intimidating and undermining your more liberal neighbors. Threatening supply routes whether it be the South China Sea or the Straits of Hormuz just doesn’t denote a commitment to world trade. Top down just isn’t compatible with the continued growth of “More.” Yet even countries once appearing to follow the liberalizing path (in the classical sense) to”More” somehow found a way to be increasingly top-down and moved in the opposite direction. Venezuela surely has made the trip. Turkey seems headed in that direction. China is at the crossroads. Could others follow? Could we actually get off the highway that has brought us so much “More”? There is always a danger of backsliding and unfortunately, there are worrying signs.
But don’t we need Laws and rules? Of course, all civilized societies have to have them, but there are rules and laws and there are rules and laws. In order for us to flexible and adaptable they have to be needed, fair, level playing field, workable, and reviewable. A good example of this is how we approach energy in light of a warming world. Presently we have a hodgepodge of mandates and subsidies favoring some while penalizing others. A tax subsidy to the producers of luxury electric cars puts competitors with a much different solution at a disadvantage. Many think a better way is to have a carbon tax and let everyone choose what is the least costly way to have energy in light of the tax. Definitely, this would be superior to what we have today, but how do we determine the proper amount of the tax. Once the tax is collected what do you do with the money? Spend it or rebate it? However, the biggest negative is even if it works and we reduce our emissions further unless the rest of the world does the same it will hardly move the needle. However, it would raise our relative costs putting us at a huge disadvantage. Even if the rest of the world buckled under and adopted high cost Zero carbon emission energy sources it would doom a billion plus people to continued poverty. How moral is that?Continue reading
In years gone by, powerful leaders exerting maximum control could plausibly claim they needed this power to protect the governed from attack or to lead them to “More” by taking it from others. Fighting with and taking from others was justified by presenting your culture as superior to others. From Imperial Rome to Imperial China outsiders were considered barbarians. Much easier to take their goods and enslave if you see them as inferior. In the modern world, these claims just don’t hold up. Recent German history illustrates the point. Prior to World War II Hitler claimed the Germans were being denied their Lebensraum. Invading Poland and other “inferior” nations were imperative to give them the territory needed for its natural development. Today even with unification Germany has less territory yet is much wealthier. With a declining birthrate, the country has had to actually import workers and allow in migrants. After spending 2 Trillion euros on joining east with the west, the country has no interest in taking over Poland or Ukraine anyone else.. Much more profitable to just trade with them. Closer to home, we would love to back what we spent occupying Iraq and Afghanistan. It surely didn’t gain us “More.”
As we pointed out in our last post, innovation was at best a very slow contributor to humanity gaining “More.” Top-down government and culture were essential. The educated elite made and recorded the laws, maintained calendars, and made the proper tallies. For most of mankind being an elite was gained by heredity. 10% or less of humanity used their positions to acquire whatever “More” there was to be had. The rest of mankind was mostly at the bottom. For thousands of years, this was mankind’s basic organization. Then the 15th Century A.D. came and the pace of innovation accelerated to the point it is the main determinate of gaining “More.” As change could now come from anywhere at any time we, in turn, have to be more nimble and flexible. Top-down governance of everything just can’t keep up with what is happening from the bottom up. The more controlling a government is the less efficient. If this wasn’t true the Soviet Union with its 5-year plans would’ve won the cold war.
Today the most controlling top-down governments such as Cuba, Egypt, North Korea, Iran, and Venezuela not only have failed to lead their citizens to”More,” but managed to provide “less”. The question is whether China will join them. Taiwan and South Korea liberalized from one party states to a democratic market dominated countries and gained much “More.” For a while, it appeared China was heading in the same direction. Then Xi Jinping took over. Facial recognition, the social credit policy and concentration camps for Muslims match or exceed anything George Orwell ever penned. It looks like the Chinese Communist Party is bent on joining the “we have to stay in power at any cost club”. President for life Xi seems aligned with those leaders with lifetime job security in we provide “Less” club. The one thing all the members have in common is they have maintained absolute control over their citizens no matter how much pain they have to inflict on their citizens just to maintain control.
China because of its size is of utmost importance to continue the march of humanity to “More.” The nation is at a crossroads. It either to moves to a responsive flexible society like its neighbors Taiwan, South Korea, and Japan and continues on its journey to “More” or it becomes North Korea or Venezuela on a much greater scale. Remember the Chinese Communists went down that road before with Mao’s Great Leap Forward. A failure setting China back for decades. Worse it cost 45 million lives. Is Xi out to break that record?Continue reading
From at least 10,000BCt to the 15th Century AD Humanity at it’s most advanced level was organized on a strictly top-down basis. Agriculture involving most people underpinned of these societies. Highly labor intensive, agriculture needed organization. When to plant, when to harvest and where and how to store the harvest called for certain retained knowledge. As we have pointed out in this series on “More”, a society can only get “More” in three ways, take it from somebody else, trade for it or innovate. Once the easy areas were planted only innovations such as irrigation and better tools, akin to the plow, axes and saws could bring more land under cultivation. Unfortunately, major innovations were few and far between. For instance, the wheel came into use at about 3,500BC, but as a potter’s wheel, not for transportation or carrying burdens. That came even later. The wheelbarrow dates only from 600 BC in Greece. That left it for trade and taking stuff from others as the preferred ways to get “More.”
Settled agrarian communities with seemingly abundant food and fiber, couldn’t help but attract those looking to relieve them of the fruits of their labor. The protective organization was a necessity. Military and policing needed leadership, organization and a means to pay for it. Accumulated knowledge had to be preserved and passed down. Who keeps the calendar? Who makes and enforces the laws.?
Trade, the other means of acquiring “More” also had its requirements. Exchanging goods need central protected markets and routes. It’s no wonder towns and cities combined administration, religion and markets in a protected area.
Laws, religion (often the same), administration and trade then all needed ways to preserve and tally. Fortunately, civilizations learned to write, read and compute. Sadly, for most of history, this was laborious, costly and limited. Even if you could read and write cuneiform, can you imagine War and Peace written on clay tablets? As a result, literacy was severely limited. As of late 1475 BC, literacy was 5% in France and 1% in Sweden. Out of necessity, a narrow group of literate elites filled the upper clergy, government administration, military and those in mercantile endeavors across all civilizations. Heredity in most cases played a major part in the makeup of these elites. The other more than 90% of the “civilized world” was an illiterate mass, mostly tied to the soil. Whether they were called peasants, serfs, slaves, coolies or some other name denoting those at the bottom, they, for the most part, led mean short lives, partaking in little or none of the “better things of life.”Continue reading