Saving Capitalism by Robert Reich

Anyone who still believes people are paid what they’re worth is obliged to explain the soaring compensation of CEOs in America’s large corporations over the last three decades, relative to the pay of average workers—from a ratio of 20 to 1 in 1965, to 30 to 1 in 1978, 123 to 1 in 1995, 296 to 1 in 2013, and over 300 to 1 today.

Unless the company did better than the stock market as a whole, there is no reason to suppose the CEO did anything in particular....

from Saving Capitalism by Robert Reich

Sand dollar...

Comment: It's also worth considering why this is primarily an American (North American) phenomenon. Sure, there are highly - at times too highly - paid European executives but, by and large, not as highly paid as those in the USA. Surely we're not to believe that somehow American corporations are more difficult to run and those in Europe.

Myths of Modern Capitalism by Joseph Heath

Increasingly, economists are becoming aware of this - there has been a significant move toward so-called behavioral economics within the profession. This approach, as the name suggests, pays a lot more attention to how people actually behave. Unfortunately, behavioral economists have yet to generate anything with the explanatory and predictive power of “the model” that is taught in Economics 101, and so the latter continues to exercise its intoxicating (and sometimes toxic) influence on the minds of the young... from Economics Without Illusions: Debunking the Myths of Modern Capitalism by Joseph Heath

Camden Market, London (2014-05-22)

Comment:

I spent most of my professional life teaching Organizational Behaviour to business students. Invariably, several of my office neighbours, up and down the hallway, were economists. My conversations with these colleagues lead me to the conclusion that, conceptually, they led a charmed life. Meanwhile, my Organizational Behaviour colleagues, steeped in models adapted from Social Psychology, Anthropology, Political Science, and Economics lived in a complex world.

Our models were many. Rarely would one model or theory account for observed behaviour. Rarely could one theoretical framework prove adequate to the task of predicting behaviour. Our world was complicated by a multitude of contingencies. Our students were stopped short if their case analyses didn't start with "it depends."

Meanwhile, the economists had a relatively simple model (confounded by a profusion of mathematics); monetary incentives.

If only life were that simple!

The End of Faith by Sam Harris

Religious moderation springs from the fact that even the least educated person among us simply knows more about certain matters than anyone did two thousand years ago... From "The End of Faith" by Sam Harris

Santa Maria chuch in Obidos, Portugal (2014-05-10)

Comment:

Cognitive Dissonance

What accounts for religious moderation? That is, why are not all believers fundamentalist believers? If believers believe, why don't they, or can't then, believe fully in whatever doctrine they subscribe to? The answer is simple for most people born into a reasonably "modern" society. If not by virtue of formal education, then surely by simple observation or even osmosis, much of what is presented in religious texts is nonsensical. It just cannot be.

Therefore, much of what is written is rejected or at least viewed with a sceptical eye. Clearly, cognitive dissonance turns thinking people away from fundamentalism.

Cognitive Dissonance accounts for religious moderation..

Niall Ferguson - on the consequences of the 1914 European war

Civilization: The West and the Rest - Niall Ferguson

The war that began in 1914 was not a war between a few quarrelling European states. It was a war between world empires. It was a war within Western civilization. And it was the first sign that the West carried within it the seeds of its own destruction. In this war, more than in any previous conflict, the West unleashed its killer applications against itself...

...war can also be a driver of human progress. As we have seen, the impressive advances of the Scientific Revolution were helped not hindered by the incessant feuding of the European states. The same was true of the clash of empires between 1914 and 1918. The slaughterhouse of the Western Front was like a vast and terrifying laboratory for medical science, producing significant advances in surgery, not to mention psychiatry...

The Co-Op in Sointula; a trading alternative...

In many ways, then, the Nazi Empire was the last, loathsome incarnation of a concept that by 1945 was obsolete. It had seemed plausible for centuries that the road to riches lay through the exploitation of foreign peoples and their land...

...in the course of the twentieth century it gradually became apparent that an industrial economy could get on perfectly well without colonies....

Comment:

Interesting premise.

However, perhaps much depends on how we perceive colonisation. Let's examine to what extent achievement of riches no longer relies on the exploitation of foreign peoples or lands. To the extent that Western nations strive to clean their environments by erecting acres of wind farms consisting of hundreds of wind turbines, so Chinese workers, mining rare earth minerals are exploited. Does it matter that this exploitation is not of the nature witnessed during colonial times? Does the Chinese miner know or care?

What we may be witnessing is the final demise of the Nation State. The coloniser is now the corporation, not the foreign power.

Richard Branson - Business Stripped Bare

Richard Branson - Business Stripped Bare

Business is creative. It's like painting. You start with a blank canvas. You can paint anything – anything – and there, right there, is your first problem. For every good painting you might turn out, there are a zillion bad paintings just aching to drip off your brush

Comment: This certainly rings true. I can't begin to count the number of times I've looked at a new business and thought to myself, "Whatever make those people think this business will work?" Invariably, it'll be just another of the "zillion bad paintings"

Branson references.

In the accompanying picture, a restaurant that is "open". Open at the time of the picture, but preceded by countless iterations of either "Closed", "Open", or just plain empty. Now (2015) it's been torn down. Just one of the zillion bad paintings.

Adam Smith: the systematic analysis of the behavior of individuals pursuing their self-interests

"Smith had one overwhelmingly important triumph: he put into the center of economics the systematic analysis of the behavior of individuals pursuing their self-interests under conditions of competition" (Stigler 1976, 1201)

-from "The Big three in Economics" by Mark Skousen

The cheese market in Edam, the Netherlands

Joseph E. Stiglitz on the wealth of lower and middle classes

... much of the wealth of the bottom and the middle, resting on the value of their homes, was phantom wealth—based on bubble housing prices... 

  (from "The Price of Inequality: How Today's Divided Society Endangers Our Future" by - Joseph E. Stiglitz)

Cute cottage in Husum, Germany

Luxury, rather than necessity, is the mother of invention...

From The Evolution of Useful Things by Henry Petrosk

Think about it:

...whereas the shortcomings of an existing thing may be expressed in terms of a need for improvement, it is really want rather than need that drives the process of technological evolution. Thus we may need air and water, but generally we do not require air conditioning or ice water in any fundamental way... 

Rock ovens built 1913 during construction of the Kettle Valley railroad

Thus:

Luxury, rather than necessity, is the mother of invention. Every artifact is somewhat wanting in its function, and this is what drives its evolution....

It’s my stock and I love it

A Mathematician Plays The Stock Market by John Allen Paulos ; a must read if you're going to dabble (don't dabble!) in the stock market. 

Sheep on the dike by Dagebüll
Avoid behaving like sheep when investing

The “endowment effect,” ... is an inclination to endow one’s holdings with more value than they have simply because one holds them. “It’s my stock and I love it.”

and

If enough people suddenly wake up believing in a stock, it will, for that reason alone, go up in price and justify their beliefs further...

Barbara Tuchman on the Renaissance

A nice summation of the Renaissance by Barbara Tuchman in The March of Folly:

Christopher Columbus statue at 
downtown Seattle's 
Waterfront Park

At about the time Columbus discovered America, the Renaissance—which is to say the period when the values of this world replaced those of the thereafter—was in full flower in Italy. Under its impulse the individual found in himself, rather than in God, the designer and captain of his fate.

Key point: ...the individual found in himself, rather than in God, the designer and captain of his fate...

Which brings to mind the words of the poet William Ernest Henley in his poem Invictus: 

It matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul.

From Economyths by David Orrell

A fascinating read; Economyths by David Orrell: 

Bank in Leipzig

The economy is unfair. Economic theory is supposed to be about optimising the allocation of resources. However, the reality is that the rich really do get richer. (Economyths by David Orrell)

Mencken on religion

A while back I decided to actually read HL Mencken, rather than just browse through publications of his pithy points. 

St. Laurentius Kirche - Ahrweiler

For example, in H.L. Mencken on Religion, this short bit of wisdom:

The common view of science is that it is a sort of machine for increasing the race’s store of dependable facts. It is that only in part; in even larger part it is a machine for upsetting undependable facts.

Very good. But let's focus the the really relevant part:

...science... is a machine for upsetting undependable facts.

-->

First post... testing...

Testing. Testing. Testing. Testing.