They're Recording Everything

The ceaseless march of technology brings us ever closer to a dystopia even grimmer than that imagined by Orwell or Terry Gilliam in his epic motion picture, "Brazil".  This story in the Sept. 29 edition of the WSJ tells us about the combination of cameras and computers that are used to record the locations of cars identified by license plates then stored in data banks that are shared by government agencies and various private organizations without the knowledge of the vehicle's owner, or indeed without any human action at all.  Sure, individuals could, conceivably, write down these same plate numbers and make a note of the location where they were observed and this information could be stored in file cabinets somewhere so the concept is really nothing new, but the organization, storage and retrieval of the data has made a quantum leap.

 Fifteen years ago, more than half of these types of surveillance tools were unavailable or not in widespread use, says Col. Lisa Shay, a professor of electrical engineering at the U.S. Military Academy at West Point who studies tracking.

"What would the 1950s Soviet Union have done with the technology we have now?" says Col. Shay. "We don't have a police state in this country, but we have the technology."

Most interesting is the fact that, with all these incredible technological advancements, processes and mechanisms that weren't even a dream just a short time ago, the nation-state and its agents still use the centuries-old technique of employing explosive force to drive a small metal pellet through the body of humans, with often fatal consequences, who are merely suspected of some crime or refusal of responsibility. There haven't been any technological leaps that would enable an agent of the state to harmlessly incapacitate a suspect offering resistance to arrest or attempting to flee.  From this we must infer that the state and inventors that wish to sell their products to the company that never writes a bad check, are more interested in acquiring information that will increase their income and power, rather than save or extend lives.  In fact, it seems as though agents of the state actually want to kill people.

On a parallel theme, there's been a problem with the social security numbers of some honored military veterans.  On-line bios of the soldiers were accompanied by their social security numbers.  Social security numbers were originally issued to identify wage earners so that their contributions to the national Ponzi scheme could be put in the right pigeon hole of the "lock box" and be eventually withdrawn when the worker retired.  That limited use has expanded to make the social security number an identifier for all manner of things, both public and private, from issuance of fishing and hunting licenses to library cards to passports and college applications.  Everybody gotta have a number.  And since the number of an individual can be used for nefarious purposes by evil-doers, it has to be kept a secret shared only between the individual and the government.  But the government, abstraction that it is, is made up of individuals as well.  And they get to know the secret.  What do you suppose the possibility might be that some pencil-pusher in either the public or private sector, with access to social security numbers and the attached names, has sold that information to whomever might need it?  I'm betting that the possibility is 100%.

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Gazing Forlornly At The Mis-guided Heller

we have James Buchanan, who gives us his view of how the world operates, even when the technocrats like Heller are at the controls:

. James M. Buchanan, "Order Defined in the Process of its Emergence"*

*A note stimulated by reading Norman Barry, "The Tradition of Spontaneous Order," Literature of Liberty, V (Summer 1982), 7-58.

Norman Barry states, at one point in his essay, that the patterns of spontaneous order "appear to be a product of some omniscient designing mind" (p. 8). Almost everyone who has tried to explain the central principle of elementary economics has, at one time or another, made some similar statement. In making such statements, however, even the proponents-advocates of spontaneous order may have, inadvertently, "given the game away," and, at the same time, made their didactic task more difficult.

I want to argue that the "order" of the market emerges only from the process of voluntary exchange among the participating individuals. The "order" is, itself, defined as the outcome of the process that generates it. The "it," the allocation-distribution result, does not, and cannot, exist independently of the trading process. Absent this process, there is and can be no "order."

What, then, does Barry mean (and others who make similar statements), when the order generated by market interaction is made comparable to that order which might emerge from an omniscient, designing single mind? If pushed on this question, economists would say that if the designer could somehow know the utility functions of all participants, along with the constraints, such a mind could, by fiat, duplicate precisely the results that would emerge from the process of market adjustment. By implication, individuals are presumed to carry around with them fully determined utility functions, and, in the market, they act always to maximize utilities subject to the constraints they confront. As I have noted elsewhere, however, in this presumed setting, there is no genuine choice behavior on the part of anyone. In this model of market process, the relative efficiency of institutional arrangements allowing for spontaneous adjustment stems solely from the informational aspects.

This emphasis is misleading. Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossiblefor an omniscient designer to know, unless, of course, we are to preclude individual freedom of will.

The point I seek to make in this note is at the same time simple and subtle. It reduces to the distinction between end-state and process criteria, between consequentialist and nonconsequentialist, teleological and deontological principles. Although they may not agree with my argument, philosophers should recognize and understand the distinction more readily than economists. In economics, even among many of those who remain strong advocates of market and market-like organization, the "efficiency" that such market arrangements produce is independently conceptualized. Market arrangements then become "means," which may or may not be relatively best. Until and unless this teleological element is fully exorcised from basic economic theory, economists are likely to remain confused and their discourse confusing.

James M. BuchananCenter for the Study of Public Choice
George Mason University (after 1983)

Found here:  http://oll.libertyfund.org/?option=com_content&task=view&id=163&Itemid=282#xx01

Walter W. Heller Kept Keynesian Economics Alive

Among other things, Walter W. Heller was the Chairman of Economic Advisers from 1961 to 1964, and helped to formulate the increasing role of the federal government in the US economy under Kennedy and Johnson.  He was the architect of the "War on Poverty" and, for a time, the leader of Keynesian economic theory in the country.  After leaving the Johnson administration he returned to his previous post as a professor of economics at the University of Minnesota.  Here is an excerpt from his 1966 book New Dimensions of Political Economy, Harvard University Press:

...A professional resolve to maintain our basic reliance on the market process does not require us to admire or to tolerate the resulting income distribution, or the existing division of resources between the public and private sectors, or the forces of monopoly and consumer deceit that tend to thwart the market process.  There are substantial differences among economists on how far the government should go in protecting consumers or setting guideposts for wages and prices.  But there is little difference-at least among the vast majority of economists-in supporting strong measures to protect the free play of market forces against monopoly and price-fixing, and in strongly opposing direct wage and price controls as inefficient and inequitable substitutes for market forces, to be considered as a last resort in a war economy.

    The study of macroeconomics, in turn, moves us in the other direction.  The basic structure of the Keynesian theory of income and employment-and even the basic strategies of Hansenian policy for stable full employment-are now the village common of the economics community.  When Milton Friedman, the chief guardian of the laissez-faire tradition in American economics, said not long ago, "We are all Keynesians now," the profession said "Amen".

     True, we still differ over the tactics and timing of fiscal and monetary moves for stabilization.  We do not, for example, agree on precisely when we should tighten the monetary and fiscal tourniquets in an overheating economy or loosen them in a slack one.  But we do agree that economy cannot regulate itself.  We now take for granted that the government must step in to provide the essential stability at high levels of employment and growth that the market mechanism, left alone, cannot deliver.

_________________________

There you have it folks.  The country, and by extension the world in its entirety, can't properly  function without the guiding hands of economists like the late Dr. Heller.  Monopolies would abound, customers would be exposed to insurmountable deceit and the curse of unemployment would doom our growth and prosperity.  Thank goodness the apparatus to remedy these ills was implemented with the help of Dr. Heller.

Heller Hall, headquarters of undergrad economic indoctrination at the University of Minnesota.

J. Edgar Hoover Talks to Henry Ford

J EH:  Hi, Mr. Ford.  Have a seat.  Nice to see you.  Heard a lot about you.  Maybe you've heard of me?

HF:  Can't say as I have.

JEH:  As you can see by the sign on the door, I'm the head of the Bureau of Investigation.  In a few years, it will be the Federal Bureau of Investigation but we're not there quite yet.  And I'll be the boss.

HF:  This Washington, D.C. is a swell place but I've got plenty going on back in Michigan, what can I do for you?

JEH:  Let me explain some things first and then we'll get to what you can do for me, actually for the great and wonderful USA.  This is the Bureau of Investigation.  We investigate things, things that are bad for the country.  Like bank robberies, postal fraud, pornography, and sedition and treason.  When those kind of crimes are committed, it's our job to arrest the perpetrators and bring them to justice.  But that's not all.  We know that there are people that want to commit these crimes but just haven't got around to it yet.  They might be planning to sell secrets to the Bolsheviks but haven't gotten the whole thing done.  We investigate those types, too.

HF:  I'm basically just trying to manufacture and sell automobiles.  You might be driving one now, lots of folks are.  Anyway, it's a big job and keeps me pretty busy, I don't think that I've got time to be helping you out with your investigations.

JEH:  Well, let me say this about that.  First of all, its the duty of every American citizen to help us, the legal authorities, in any way they can.  Catching crooks isn't easy, they get more inventive all the time.  And as technology advances, your cars are a good example, the bad guys put it to use and we have to keep up with them.  We're getting big into fingerprints now, no two humans have the same fingerprints so if we can get a record of the fingerprint of every person, well, we'll have a very useful tool in fighting crime, see what I mean?

HF:  I guess so.  Does this mean that you want to fingerprint me or my employees?

JEH:  It might come to that, eventually, but we're not set up for it now.  There is another way that you can be of assistance, however.  When a crime is committed, witnesses give descriptions of the criminal to the police.  Lot's of times it's pretty generic.  "It was a black guy."  Or, "He looked like a Mexican".  That's not a very useful description.  There's lots of Negroes running around, we can't grab them all.  So the officer will ask questions that narrow it down.  Like"What color shirt was he wearing?"  What we need you to do, and this might sound kind of demanding, but we need you to paint your cars other colors beside black.  They're just not that easy to tell apart when one of them scrams from a bank robbery and blends into all the other black model Ts on the street.  You think that you can do that for us?

HF:  Nobody has ever asked for a model T in any other color and we hadn't planned on painting the model A anything but black, either.  Sure, there's some car nuts that paint their cars goofy shades of red or green but if we starting offering that where would it all end?

JEH:  I'd hoped that you'd understand our situation more quickly, Mr. Ford.  This is very important, to the USA itself.  It would be nice if we could work something out on an informal basis, rather than through legislation or regulation.

HF:  OK, I suppose it was bound to happen sooner or later.  We'll begin painting them other colors as soon as we can set up for it.

Greek Government Income Isn't Making It

Greek English language newspaper ekathimerini publishes this today, on the same day that Athenians take to the streets in riots.

Firms Owe Billions in Taxes and Loans


The total amount owed by entrepreneurs and the self-employed to the state, social security funds and banks is 194 billion euros, just short of the country’s gross domestic product, according to data compiled by the National Confederation of Greek Commerce (ESEE).
Of that total, about 44 percent, or almost 85 billion euros, comprises overdue debts. This huge amount cannot simply be explained away by the economic crisis, but it is obvious that the dramatic drop in turnover, the rise in extraordinary taxes and reduced access to bank loans due to the dire financial situation have exacerbated the problem.
The ESEE data show that the total debt comprises 41.1 billion euros owed to the tax authorities, 4.3 billion euros to the fund for self-employed professionals, OAEE, and 11.5 billion euros to the Social Security Fund (IKA), while expired debts to banks come to 28 billion euros.
For 2012, the sum of the enterprises’ obligations is estimated at 104 billion euros, half of which concerns taxes due.


UK Telegraph photo of Greek riot police pushing protestors in Athens.

American Free Market Entrepreneurs In Action

A champion local scalper (or is that ticket re-sale specialist) in action.

At an unnamed location in an inconsequential American city, independent entrepreneurs sell tickets THAT HAVE ALREADY BEEN PAID FOR to willing customers for less than face value.  How can this be?  Well, these tickets were purchased by people who are now uninterested in attending the game, maybe because they're going to a baby shower instead or are too hung over to get out of bed or no longer wish to watch the follies of a team that's fighting over last place in its division.  No matter, they've put these tickets, probably at a price, into the hands of these itinerant salesmen.  Now it's their goal to get those unneeded ducats into the hands of fans that actually want to see the game, and they do.  I bought a $68 Delta Skybox seat, a pretty good spot to watch a ball game, for the reasonable sum of $15.What could possibly be wrong with that?


Some sales are from scalper to scalper, which may be what's going on here.


As in any bazaar-like environment, the seller and prospective buyer can fail to come to an agreement.

The Spanish Financial Catastrofe'

This story gives us a glimpse into what happens when a government spends a lot of money that it doesn't have. Note that much of the spending was on "infrastructure", such as the unused Valencia airport. Keynesians and their weird MMT cousins are constantly touting infrastructure projects financed with fiat money as the answer to a moribund economy and high unemployment.


 The Spanish, members of the EU and restricted to the use of the Euro, at least officially, don't have the ability to print their own money, a luxury in which the US indulges enthusiastically. The current thinking isn't all that much different than it was during the "progressive era" in the last decades of the 19th century. Go to bimetallism because there isn't enough money in the system. Now the idea is to print more money, buy more dubious assets, and get the snowball rolling down hill once again.

 Curiously, the battle against counterfeiting seems to be more intense than ever. The Treasury has redesigned currency to make production of bogus bills more difficult. Retail clerks routinely examine even $20 bills with special pens to determine their authenticity. However, all but a tiny percentage of exchanges in the US are done electronically or by check. Cash has become a relic of a bygone barbaric era. Accounts are now kept on an electronic scoreboard somewhere in Oz.