I'm reading the Black Swan by Nicholas Taleb. I haven't even finished it but feel compelled to comment on it right now.
The Black Swan event, according to Taleb, is a very improbable event with enormous implications, a far outlier in the Gaussian sense. One of my first posts in this blog was about links and nodes of networks and based on that my conjecture is that black Swan events can arise in nonlinear environments but not in linear. Linear events, where the output is proportinal to the input, pile up a Gaussian curve statistic but in a network the same trigger can either fade away or blow out of proportion through the many nonlinear feedback loops.
I conjecture that all memes are potential Black Swans. The memetic network is like a excited laser, feed in the wrong frequency and nothing will happen but with the right input the whole energy is released in one go.
Saturday, March 28, 2009
Monday, March 16, 2009
The point
I got some comments about my previous post. It was pointed out that the capitalism of big corporations is a meritocracy. This is, of course, true and I realized that the main point implied in the artice was not spelled out clearly enough.
Any stable order is a meritocracy given the parameters of the system. My point was that the capitalism of big corporations will not bring about the meritocracy that the Enlightment thinkers and the Founding Fathers of USA had in mind. These thinkers envisioned a society with free individuals, all having an intrinsic human value and where their starting point in life would not be an impediment for the pursuit of happiness.
In a system where the incumbents can tweak the rules in their favor, this will not happen.
Any stable order is a meritocracy given the parameters of the system. My point was that the capitalism of big corporations will not bring about the meritocracy that the Enlightment thinkers and the Founding Fathers of USA had in mind. These thinkers envisioned a society with free individuals, all having an intrinsic human value and where their starting point in life would not be an impediment for the pursuit of happiness.
In a system where the incumbents can tweak the rules in their favor, this will not happen.
Saturday, March 14, 2009
Capitalism and the American Dream
I saw a video clip about Milton Friedman defending capitalism against critics.
He is right that other systems have not been able to deliver the goods as well as this system and in this way is better for its citizens, but he is dead wrong when he lets us understand that capitalism equals free markets and free competition.
Capitalism, as commonly understood today, is the capitalism of corporations. Corporations loathe free competition - they do everything within the law (and sometimes beyond) to achieve a monopoly of sorts, because that can deliver the highest profits. Basically they like competition when it allows them to move in on somebody's turf but cry foul when it is done unto them.
As my pseudonym indicates, I'm no lover of monopolies. It does not matter do they come from corporations or trade unions. It is the same idea, to monopolize the market of a certain good and create barriers of entry.
Capitalism as of today left unchecked is not a good idea since it will not increase the chances for the challengers of the world, bringing in the full competition and innovation that humans can muster. However, the allocation mechanism of "the market" is unsurpassed in its efficiency and should be kept going at maximum speed but that does not mean that it can be left unchecked either, as we have learned in the near past. Its allocation efficiency will not be hampered even if it has strict rules and full transparency. Capitalism with not easily manipulated checks and balances is probably the optimal system that we can achieve.
Americans have been conned from birth into believing that today's capitalism equates to the "The American Dream" where Scrooge McDuck relying on himself only and his skill and his hard work, can work himself up during his lifetime from being the shoddy immigrant at Ellis Island into the richest duck in Ducksburg. With fewer barriers of entry driven by the incumbents and the helpful governments, we would have more Scrooges. The American Dream is much better served by full competition (even foreign) underwritten by the government. Regulation is actually needed to bring this about.
I see the main economic role of governments to make sure that the playing field is level, this will not emerge. Not that I believe it to happen any day soon, since political parties are organisations driving their own particular monopoly with no love lost for actual competition regardless of the color of the banner they fly.
A totally level playing field would actually equal to meritocracy. That is a scary thing since you can not be so sure you are the best, can you?
He is right that other systems have not been able to deliver the goods as well as this system and in this way is better for its citizens, but he is dead wrong when he lets us understand that capitalism equals free markets and free competition.
Capitalism, as commonly understood today, is the capitalism of corporations. Corporations loathe free competition - they do everything within the law (and sometimes beyond) to achieve a monopoly of sorts, because that can deliver the highest profits. Basically they like competition when it allows them to move in on somebody's turf but cry foul when it is done unto them.
As my pseudonym indicates, I'm no lover of monopolies. It does not matter do they come from corporations or trade unions. It is the same idea, to monopolize the market of a certain good and create barriers of entry.
Capitalism as of today left unchecked is not a good idea since it will not increase the chances for the challengers of the world, bringing in the full competition and innovation that humans can muster. However, the allocation mechanism of "the market" is unsurpassed in its efficiency and should be kept going at maximum speed but that does not mean that it can be left unchecked either, as we have learned in the near past. Its allocation efficiency will not be hampered even if it has strict rules and full transparency. Capitalism with not easily manipulated checks and balances is probably the optimal system that we can achieve.
Americans have been conned from birth into believing that today's capitalism equates to the "The American Dream" where Scrooge McDuck relying on himself only and his skill and his hard work, can work himself up during his lifetime from being the shoddy immigrant at Ellis Island into the richest duck in Ducksburg. With fewer barriers of entry driven by the incumbents and the helpful governments, we would have more Scrooges. The American Dream is much better served by full competition (even foreign) underwritten by the government. Regulation is actually needed to bring this about.
I see the main economic role of governments to make sure that the playing field is level, this will not emerge. Not that I believe it to happen any day soon, since political parties are organisations driving their own particular monopoly with no love lost for actual competition regardless of the color of the banner they fly.
A totally level playing field would actually equal to meritocracy. That is a scary thing since you can not be so sure you are the best, can you?
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