Move Your Feet

It's been quite a while since I've last blogged. It's been incredibly busy lately, and not much spare time to spend doing "outside" thinking and writing. But today I was doing some pondering in priesthood meeting and felt the thoughts were worth writing down.

One of my favorite quotes of all time is this anonymous one:

"Don't ask the Lord to guide your footsteps unless your willing to move your feet."

This clever statement holds embedded in it some profound insights that I doubt many grasp. First and most obviously, faith is a principle of action. While works without faith is dead, so it is the other way around. Not because faith requires works, but because faith is works. Faith is who you are, not what you think. This is manifest in what you do. If you truly have faith that some action will offer greater reward than another, you will do that action. But if you have some semblance of doubt, if you are unsure which will offer the greater reward, or if you will receieve any reward at all, you may waver in your actions. This is the cause of sin.

Bible translation has lost this meaning of faith because we don't have in English (nor in Spanish I might add) a verb form of the noun faith, as it is in the original Greek and Hebrew, so the word has been degenerated through translation into the related but unequivalent word believe. Thus we have come to understand faith incorrectly as a mere thought.

Additionally, we gleen from this simple quote another important, but largely misunderstood doctrine, that our receiving of revelations, guidance, commandments, and similar blessings are dependent on our willingness and ability to follow the counsel we would receive. As Josepth Smith taught, "we cannot keep all the commandments without first knowing them, and we cannot expect to know all, or more than we now know unles we comply with or keep those we have already received." In other words, you won't be getting any new commandments until you're ready for them.

Our Heavenly Father is not overly anxious to heap condemnation on us. Yet we often seem to deeply desire it, and perhaps sometimes even beg for it. We teach frequently that we can receive guidance, revelation, and blessings if we ask for them and live righteously. This is a poor misrepresentation of the doctrine which has led to much misguidance. First, living righteously is a vague and ambiguous phrase that offers little guidance as to what state one must achieve to be worthy. Many, perhaps most, church members (and this is probably generalizable to the world) consider themselves righteous. This is because they fail to recognize what they've already been given and are yet not living up to. Thus they find themselves in a sort of stasis, living up to a certain level of commandments and contenting themsleves at that level. They believe themsleves to be "righteous", and thus worthy of whatever spritual help they ask for.

Additionally, God has warned us against asking for things we shouldn't. "Trifle not with these things; do not ask for that which you ought not" (D&C 8:10). Yet we fail to consider what is is we should be asking for and instead focus our attention only on what we want.

These are dangerous states to be in because God, in His love, wishes not to heap on us more commandments which we will fail to live up to, thus condemning us further. And, just like any other good parent, He certainly won't give us what we want if it isn't right. But if we don't receive what we ask for, believing oursleves to be worthy, we start hammering at our foundation of faith with doubts. We wonder why God doesn't care, or if He's listening, or if He's even there at all. These are, perhaps a little extreme reactions for many of us, but it certainly broods a frustration when we don't get what we expect or perceive to need.

If we are to receive revelations and guidance from the Spirit, we have to pick up our feet and do it, whatever it is, even if it's something we'd rather not do. Until we adopt this attitude of ultimate determination, we will reach a point of spiritutal stagnation, where we've maximized all that we are willing and able to do. How many of us would be willing to literally drop our jobs and everything we are working on for a church responsibility, as was asked of the Apostles of old? How many of us have a hard time finding time to magnify the callings we have now?

Could we be doing better? If so, we're probably not ready for more.

Economists Debate

I listened to a podcast between 2 economists yesterday as they debated the trade deficit with China. On the one hand, argues one, China gains a competitive advantage by manipulating its currency. By devaluing their renminbi, the effectively increase the demand for their products by making them cheaper.

“So?”, argues the other economist. If they want to sell us their stuff for cheaper than it’s worth, better for us.

Not so, argues the first economist. If China is selling us all their goods, a greater portion of our aggregate demand goes to them, rather than to American business. So American business suffers while Chinese business flourishes.

But we can move our resources to better uses then, points out the second economist. If they’re willing to produce stuff for us cheaper than we can make them ourselves, it’s better for us to use our resources for other things.

Ok, here’s where I interject my argument. The first economist’s argument is founded in the idea that if we buy all our stuff from China, we’ll run out of demand for our own stuff, and our economy will implode. This, of course, is nonsense. If we trade with China, China expects something in return. They’re not charitably giving away all their stuff, and if they did we’d be even better off. No, China expects us to give us something of equal value back to them. The aggregate demand is a wash. We demand the stuff they make better/cheaper, they demand the stuff we make better/cheaper.

The second economist is exactly right, why should we fight to keep our labor resources stuck in employment where they are less efficient than others in the world? If the world gives it to us cheaper than we could produce ourselves, aren’t we just hurting ourselves if we make it ourselves? We could make a pie for $5, or buy a better pie than our own recipe for $3. If we refuse to let the law of comparative advantage work in our favor, we lose the benefit of the talents and hard work of the rest of the world, which is the majority of people.

While it’s important to be self-reliant, self-reliance does not need to mean that you grow all your own food, build your own house, generate your own electricity, perform all needed medical procedures on yourself, and never get any help from anyone. It means that you do what you do best for yourself and others, while those others do what they do best for you in return, enough that you are able to provide for your own well-being. This maximizes efficiency and output. It is these principles, outlined by Adam Smith, that led to the creation of our free nation, and thus to the long-awaited exit of mass poverty with the exponential growth of worldwide wealth that capitalism created.

Protectionism, such as the first economist advocates, appeals to our emotional senses, to help those of our countrymen who do what others from other nations do better. But if we are to protect those workers from their own competitive failure, we force all others to pay the price at the expense of growth. You make the poor pay more for their food than they are able because the farmers want to be protected from foreign competition. You force the entrepreneur to give up his idea because it costs too much to start his business due to the rules and regulations established to protect existing industries.

No, there is no trade imbalance, and it would be detrimental to pretend that there is one. Let politics be reason without emotion, and let us govern ourselves wisely, even if it means a few will have to find new careers.

Thoughts On Obedience

You hear talks on obedience all the time. As I was sitting in church listening to a talk on Sunday, I wondered if anyone would ever discuss over the pulpit the other side of the issue that’s never spoken of. Of course, I decided that if I ever get asked to give a talk on obedience, that’s precisely what I’d do.

We always approach the topic of obedience from the road of why it’s so important, why we must always obey, what blessing come from obedience. But what about being too obedient? Is there such a thing? Christ sure seemed to think so.

When we obey, we are blessed with the spirit of understanding, a testimony of the commandment’s purpose. We gain happiness in knowing we are growing and progressing and doing God’s will. But if we don’t see these blessings in spite of our obedience, we may be doing something wrong.

Obedience is a means to an end, not an end in itself. If obedience becomes an end to us, the end that it is intended to guide us to becomes lost, and we no longer find ourselves moving toward the ultimate goal, the goal of perfection.

This is what happened to the Pharisees. Were the Pharisees obedient to the commandments? Absolutely. But if so, where were the blessings, the happiness and joy, the Spirit, the promise of eternal life? What was their error? It was their strict obedience. Obedience became so much their entire moral purpose that the basic principles that the law was intended to teach them became lost, and they failed to learn the basic meaning of the law: love thy God, and love thy neighbor.

Internal factions of the modern LDS religion have become pharisaical. They take the commandments as they are given, interpret them as black and white instructions, and harshly condemn any who deviate from them in any way. Take the Word of Wisdom, for example. We have created from the revelation a list of dos and don’ts, these things are okay, these things are prohibited and you will be damned if you partake in them at all. We forget Christ’s doctrine, and fail to understand that, like the Sabbath, the Word of Wisdom was made for man, and not man for the Word of Wisdom. These commandments are given to us to teach us to take care of our bodies and minds, to live a healthy lifestyle that we function properly. It was not meant to be a burden, a trip wire to knock us down to hell.

Is it unlawful to work on the Sabbath? Sure, but that doesn’t mean we do nothing. If the ox is in the mire, we can and ought to take care of it, we should continue to prepare meals, etc. Strangely, though, we often seem to understand this concept only for the law of the Sabbath, as it is the only one that Christ specifically noted. But the principle applies to all laws.

Take “thou shalt not kill” for another example. We know that, in extreme circumstances of war, killing in defense is justified. But what about Nephi and Laban? Was it in self-defense? Was it even necessary? Yet it was permitted, even commanded of him, against the letter of the law.

When we read the laws of God in pure black and white without the intent of understanding the purpose of the laws, we find ourselves misguided and deceived. This is how the idea of celibacy came to be, no doubt to God’s dismay. This is why many religions recite prayers rather than pray. This is why certain Christian religions still observe the Sabbath on Saturday. I've heard stories of couples whose first kiss is over the altar, having kept their fence around the law very large indeed (can you think of any ways this plan could backfire? I sure can).

We have a huge problem of self-righteousness and unrighteous moral judgment in the Church. Many proclaim moral superiority over others due to their obedience (no one thinks they do this, but they do, even if only in their own thoughts), thus in effect declaring their moral inferiority. I find it interesting that those who criticize others fail to note the beam in their own eye, the fact that, while they are living a life of strict obedience, they themselves are unhappy, enough so to find the need to lift their self-image and status by comparing themselves to others.

We must beware of our quickness to judge others for their perceived lack of obedience. Perhaps they ought to do better. Or perhaps it is we who have failed to understand the intent of the law, and they who live the spirit of it.

Don't Worry, Be Happy

My fiancé is a worrier. I’m not. I have to laugh to myself about some of the things she gets nervous about. But it’s made me pause to wonder why we worry, and what consequences it has.

What causes us to worry? Whenever we are presented with an decision or activity that has some degree of risk, which is most activities, including merely existing, we do an internal audit of that risk. We assess the possibilities of negative results occurring, and weight those against the possible rewards. We estimate the probability of those negative results occurring, and then factor that in to the final decision. Once the choice is made, the margin of possibility from our assessment of a negative outcome determines how much we worry about it.

So why do we differ so greatly, person to person, in how much we worry? The simple answer is that we estimate the probabilities of risks differently. The way we estimate these probabilities is primarily through experience, and also through education. If our experience while growing up included an unfortunate outcome, we will internally expect similar outcomes at a higher probability than those who did not have that experience, no matter what the actual probability might be. The reason, obviously, is that the actual calculated probability from their subset of 1 was much higher.

Those who never experience certain issues have an experience probability of 0, increased only by their education of others who have had that experience. When we hear of others in similar situations that have had a negative outcome occur, that probability is suddenly no longer 0. Between you and them, it is not quite 50%, since your personal experience is weighed heavier than others’ experience. But the more experiences you learn of, the more refined your estimated probability becomes. The experiences of those close to you often hold greater weight because you measure their situation to be close to yours (i.e. they live in the same neighborhood, they’re about the same age, you share genetics, etc.). You will naturally piece together all the information you’ve collected personally as well as the experiences of others to try to refine that probability of negative outcomes for your exact situation.

More differences can arise from your personal weighting system, how much weight you give to certain aspects of yourself in affecting the risk of a certain outcome. For example, one might consider wealth a higher factor for the probability of getting robbed, while another considers location to be the greater factor. This weighting plays a significant part in how much we worry about things. I think it’s common of certain personality types, those who have experienced more negative outcomes than is typical, to assume that the most weighty aspects are those which apply to themselves. This skews the worry levels.

The best thing we could do is find the most comprehensive studies of each negative outcome and learn (and trust) the results and each of its factors. Studies are being done constantly, and each study gives us a chance to refine our internal calculator. It is impossible to discount personal experience, but the more we are able to see our experience as an exception, the more we are able to ease our worry.

But why does it matter? Is worry a good thing or a bad thing? An amount of worry should be counted as a good thing. It provokes us to prepare, to take precautions, to avoid needlessly risky situations. But it doesn’t take much worry to promote these behaviors. Any more than a little worry is debilitating. It freezes us, it haunts us, it destroys our ambitions for advancement and progress. When we become preoccupied with every potential risk that may arise, no matter how small, the doubt rises to the forefront of our minds and binds us to the floor. We become unable to decide to take even a small risk with great chance of reward. We become afraid of new places, new people, new situations, new ideas, new adventures. We get stuck in the status quo, frozen in place.

But most importantly, we cannot be happy. Fear and happiness are antonyms, they cannot coexist. If you fear the simple walk from your front door to your car, you cannot be happy. If you fear the activities of the day, you cannot enjoy that day. If you fear even the smallest risks of living in a neighborhood, you cannot enjoy the pleasant company of your neighbors, the tranquility of a peaceful night, or the pleasures of simply playing in the yard on a warm afternoon. If you let a misjudged assessment of risk keep you from enjoying life, what’s the point of your life?

It becomes vital, therefore, to minimize our worry. We must be wary of the risks, and prepare for them. But once we are prepared, let go of the fear, for it no longer does us any good. Cease to worry, and let yourself enjoy life as only a stress-free person can. When a problem arises, then it becomes time to worry and use the preparations you have made to remedy the issues as best as possible. Sometimes things happen, tragedies, that have no remedy. Disease, injury, death, etc. Precautions should always be in place to mitigate these risks and minimize them within reason, but should these risks ever cause us such fear and worry as to destroy our happiness? If we ever get to that point, it is safe to assume we have misjudged the risks, and are worrying too much. We must then take steps to reduce the risk, educate ourselves on the actual risks, and do whatever else we can to cast out our fear, that we may again be happy. For happiness is the very purpose of life. Even tragedies should never prevent us from being happy.

War and Peace

It is an unfortunate truth that, while there are communities who want what another community has more than they want peace, there will be war. Those who would have peace must therefore choose either to submit to the tyranny of the oppressor or fight back in spite of their distaste for war. Those unwilling to fight will be made slaves or left robbed and destitute. Those who will fight must be better at war than those who choose it in order to win peace.

It would seem, from the true analysis above, that peace is hopeless. The peaceful must be better at war than the warmongers. This is the inherent contradiction that must be hurdled. But we’ve found that overstepping this hurdle is quite possible, and even natural.

A community that respects personal property and coexists peacefully has proven to be the most economically efficient in the world. Free and moral trade prompts both trading partners to create wealth for the other at the highest efficiency possible. Trade can only maximize its productivity when its interaction is completely honest and open, and no coercive force is applied.

When a society fails to respect personal property, production becomes less valuable to the producer, since it is expected that whatever is produced may be taken away. The risk is much higher than the reward, so little is produced. Why would I put my hard work in to create something of value, just to have it stolen by someone who has done no work at all? So the only ones who are willing to produce are those who are very diligent in the protection of their property, but eventually even they are overcome by the force of the many.

Naturally, therefore, moral and free societies economically out-perform those of coercion. Any honest evaluator of history must admit this to be true from past experience. Thus the economic discrepancy between peaceful societies and coercive societies grows quickly in favor of the peace lovers. This economic advantage gives peaceful societies a large advantage in the art of war. The additional resources and technologies available to peaceful societies will allow a defense that is indestructible by those who would attack them in pursuit of their wealth.

The problem then becomes the ability of peaceful communities to hold off any attack on their liberties and properties until they become so economically advantaged as to ward off any attack by mere intimidation of size and strength. The American experiment was successful, but it was convenient to have an ocean to separate itself from potential conquerors. It has been much less successful protecting itself from itself. But the foundations for peaceful trade were well enough established initially to protect itself long enough to become the richest nation, and thus the most powerful military force, in the world. It’s only major breakdowns, and thus setbacks, were the Civil War and the Great Depression, two dark time periods of great envy and division where the size and strength of the coercers exceeded that of the peace and freedom lovers.

We are approaching a possible 3rd dark period where the coercers exceed the size of the peacemakers. The peacemakers have so far submitted to the coercion of the takers, but the line is wearing thin. The producers still feel like their own hard work is creating for themselves a better life, but more and more of that hard work is being stolen from them for the benefit of those who are not so ambitious. If tax rates increase much more, the producers may refuse to be enslaved and coerced to produce for others. At this point, we must face either another Great Depression, where producers give up the fight and stop producing except at the barrel of the gun, coercion reigns supreme and production becomes scarce, or we must face another Civil War, where producers fight to protect and defend their freedoms and properties against the takers.

A civil war seems to be the more likely outcome, as it appears those who love liberty are passionate enough to fight for it. But we must remember, if we are victorious, that our strength in war is to be used only to maintain our peace. If we become tempted to use its force for coercion, we will lose our peace, and war must again become necessary. I fear that this is what America has already become, and I fear that it will take a world war to resolve.

What Drives Economic Growth?

I was laying in bed last night as my mind wandered to nerdy things. I was thinking about Keyensian philosophy and the Paradox of Thrift. If people horde their money, that unspent money does no good for anyone, and trade does not happen, so people are not increasing their value. This causes economic stagnation. Then, of course, you get the concerns of more hording if the economy stagnates, and the cycle continues. It’s not a perfect theory, and I have a lot of problems with it, but that’s the gist of it.

But why would people not spend their money? If products are more valuable to them than the money they hold, they will purchase that product. If they’re just holding off, waiting to get more value for their dollar, their demand for that product is not high enough to demand it now such that they can enjoy it sooner. At some point the waiting is not worth the discount and they will purchase the product.

Anyway, the idea that dawned on me last night is that there is a point in economic development, assuming no new technology or invention, in which optimization and productivity improvements maximize, and all products are sufficiently available to satisfy all needs. In other words, if there is no other development, at some point, farmers and food producers produce all the food needed for society with only a few needed resources. Homebuilders have built all the needed homes, and we have enough doctors to care for everyone’s health. The rest of the economy is given to unnecessary, but life improving, services. But is there such a thing as too much food? Is there such a thing as too many massages? Is there such a thing as too many movies? Yes, there certainly is. If, say, 20% of the economy was needed to provided necessities, and the other 80% was dedicated to entertainment and luxury, where is there room for growth?

Let me try to make the point a different way using a historic example, the dark ages. With the existing technology available, everyone was provided shelter, food, some medical attention, and occasional forms of entertainment through their economic structure. At their level of technology, they had maxed out their economy. It stagnated, held to a constant standard of living for centuries.

I wish I could explain my thoughts more clearly, but the point is that eventually, all our current technology, without any further developments, can only do so much, and at that point the economy maxes out and stagnates. There is a max level of efficiency based on the current technology node that will ultimately be attained. At that point no more work can be done to improve that industry, and everyone then has all that they can have. I should restate that: they can have more, but it is of no value to them to have more, it does them no good. For example, you could have a 24 oz steak, but you can’t even finish a 12 oz steak, so what’s the point?

The ultimate conclusion of this though experiment is that technology and innovation are drivers of economic growth. After each new technology develops, the economy may adjust, re-optimize, and then wait for the next technology development to come. In our modern society, technology and innovation are non-stop, thus the ability to improve efficiency never stop either. So long as this pattern continues, we will always have economic growth.

However, we have come to face political philosophies that tend to stunt and inhibit the driving forces of the economy. These philosophical ideas, while perhaps not intended for the purpose of stunting growth, nevertheless have the unerring effect of dissuading wealth creation through innovation. First, wealth redistribution and progressive taxation policies greatly reduce the rewards earned by successful entrepreneurs. This slides the risk v. reward balance toward the risk side, thus reducing the number of willing entrepreneurs. Second, the red tape policies delay, inhibit, and often destroy good ideas and talent that could possibly give society another technological leap forward. These policies include federal standards and regulations, business licensing laws, health and safety procedures (e.g. the FDA), and the such. These make the costs of developing new technologies astronomical, thus greatly increasing the risks, and again making the risk v. reward balance risk-heavy. Third, the policies that dissuade maximized efficiency promote an early max out, and thus an early stagnation. These policies include subsidies and protectionist tariffs.

There are likely more I could come up with, but the point is that if we are to promote a growing economy, we must eliminate the disincentives and improve the incentives to innovation and entrepreneurship. The risk v. reward balance should be naturally balanced. We have an enormous public sector full of nannies who choose to protect us from ourselves. They are naturally inclined, like any parent, to be risk averse, to not allow their “children” to do anything potentially hazardous. While this mentality prevails in government, innovation and entrepreneurship, and thus economic growth, will be hindered.

The Unemployment Fallacy

There’s a lot of talk about jobs these days. Government needs to create more jobs, illegal immigrants are taking our jobs, etc.

The arguments founded around the idea of employing the unemployed are based fundamentally on the presumption that there is a finite number of jobs to be had. The argument can be made based on the current population, its wealth levels, and the technological efficiency at a particular moment of time. Supply is so much, demand is so much, so this is how many jobs that are needed to meet the demand. Right? This logic, however, is based in the Keynesian economic philosophy which brought us the stimulus bill to maximize employment. There’s something wrong with the theory.

The error in this particular case is in the presumption of a limited, static economy. The number of jobs are not predetermined by economic demand. To create a job, one simply has to create an item, or provide a service, that other people would be willing to trade some of their own work for. If there is insufficient aggregate demand to employ the entire population, it is because the demand in all current industries relative to their current market level price is satiated.

Then to find employment, one must simply use a personal skill to improve the lives of others in a way that they are willing to pay for. For example, one could find an existing product or service and provide it cheaper than current market levels, thus shifting the demand curve up. Or they might build an industry of an existing product or service in an area that is currently under-supplied for the demand at current market levels. Or perhaps it means innovating a good or service that will improve the life of others in a way that has not yet been done before.

Unemployment is a much propagated fallacy of economic theory. There is no unemployment. Those who are unemployed are simply those not employed by someone, who are both unable or unmotivated to find employment with another and are unwilling to employ themselves. Everyone is a potential employer. Thus it is impossible to be unable to find anyone to employ you. If no one else will, you can employ yourself. The idea of unemployment is derived in the unwillingness to self-employ, but is this really unemployment, or laziness?

I will grant that the government rules and regulations have changed this dynamic significantly. The costs of starting a business legally are such that they may make self-employment too expensive for some. This is truly tragic, and must be remedied. Entrepreneurship is the driving force of economic growth, and must be encouraged by government. I may not go so far as to suggest subsidies, but they ought to be easy to create, with little to no additional costs or government red tape to hack through.

We’ve lost the spirit and mentality that each individual has control of their own destiny. We’ve become a worldwide society of dependents, each of us depending on another’s entrepreneurship for our sustenance. As a result, our economic growth, once growing exponentially, has stagnated, and we now grow at a snail-like pace. Except for the occasional recession, we don’t even realize that our growth rate has stagnated, we’re content with the fact that there is growth at all.

I’m tired of listening to people clamor for politicians to focus on job creation. If these people focused their energy on that very job creation that they’re clamoring for instead, the bulls would return.

A New Amendment

I’d love to see a new amendment to the Constitution to the effect of the following:

Congress shall make no laws regulating the right to form voluntary contracts. No federal laws shall be made to favor labor, management, service providers, consumers or any other party to a contract legally agreed upon by consenting adults. Contracts shall be defined to include legally authorized and signed written agreements and purchases or trades under free and voluntary agreement, but shall not include verbal agreements. Contracts shall be declared void, and a punishment predetermined by Congress shall be assigned by judicial review, if either party fails to meet the criteria agreed upon, or if the contract is determined in a court of law to be agreed upon by force or fraudulent presentation.

The intent of this new amendment is simple but broad. Consenting adults may do whatever they choose with other consenting adults if a contract is signed. Provided they do not infract on the rights of another, adults may do as they choose. Policeable offenses should only include those which interfere with the protected rights of another. This is what is meant by freedom. Adults should not require nannying by any federal authority, but shall choose their own fate as they wish.

Adults may enter into contracts with each other as they wish. You can buy what you want, you can do what you want. But goods and services must be as they claim, no exchanges shall be made deceitfully, as this violates the rights of another’s property by the use of fraud. This shall require fairly strict disclosure rules, requiring all relevant information to be given before a contract is signed.

But more to the specific point, this amendment would prevent government from intervening in business contracts, including labor contracts. Labor unions could still exists, but government could not lawfully favor them in any way and force businesses to cede to their demands. Business and labor would have equal footing, thus allowing market forces to determine employees’ value and employers’ power. Without federal union protection, businesses have equal power in contract negotiations, and can do the best thing for their company. This will spike company productivity, lower costs and therefore prices, improve the general standard of living, and accelerate economic growth.

What’s more, this would prevent government from restricting consumption. You can buy what you want: energy-wasting light bulbs, pot, SUVs, experimental medicines, etc. Government would have no power to tell you what to buy. Consumers would have no nanny protection that result in huge price increases to protect them from their own choices. Companies would simply have to be honest about their product and consumers would decide for themselves what risks they’re willing to live with.

But there are maybe a handful people in Congress who don’t have a god complex and think that their job is to save people from themselves. The chances of such an amendment passing are as slim as Nancy Pelosi’s reconstructed nose. But we can always hope…

Let's Make Jobs!

You know what the main concern of the American people is right now, right? Jobs. All of our politicians are huddled together in masses, inventing ideas to create jobs for the unemployed American workers. From this brain-trust emerged the growing concern in our foreign trade deficit, that our imports exceed our exports, that we buy more than we produce, and thus our jobs are lost to these foreign nations. Let’s look at this concern a little deeper.

Let’s suppose that we were to choose whether to purchase a foreign-made product or a good old made in the USA product. The foreign product is cheaper, but of course made in Chilandia. Many argue that, economically speaking, it is far better to buy the domestic product, as it creates a profit for the American company and subsequently grows their employment, while purchasing from the foreign company, who is able to provide much lower costs because the cost of labor unfairly low for them, creates a trade deficit and causes our jobs to be outsourced. Makes sense, right? But let’s follow the money to make sure we understand the full implications of each choice.

Let’s suppose we need 100,000 t-shirts for our beachwear clothing company. We could buy them from California for $1.50 each, or from Chilandia for $1 flat. So we would either spend $150,000 or $100,000, depending on who we purchase from. That $50,000 difference in costs for the company is significant, as we could hire new employees, or invest in new equipment, or lower our costs to the customers. But if we buy from California, we’re helping the California company stay in business. So we’re saving a lot more jobs, right?

Well, let’s keep going. Let’s suppose we choose to purchase from California, so we spend $150,000. What does the California company do with the money? It pays their employees, covers the costs of production, pays its taxes, and keeps the rest as profit, which goes as dividends to its shareholders.

Suppose we instead chose to go with the foreign company. We spend $100,00, saving the $50,000. The Chilandia company is paid in U.S. dollars. It takes the dollars and exchanges it at the local bank for chilands, its own local currency, after which it pays its employees, covers its costs, etc, same as the U.S. company. But let’s keep following the dollars, since that’s what we in America care about. Now Chilandia has our money. What do they do with it?

Dollars are just paper unless used, and the Chilandia bank needs to put the money to work so they can stay in business. Some of the dollars will likely be taken by chilandese companies (in exchange for chilands) so they can buy American goods they need. The rest will be used by the bank to invest in American companies (just like American banks do). So ultimately all the money spent in Chilandia comes back to the U.S. in the form of U.S. exports or foreign investments. Is there a difference between buying American or buying Chilandian? Not really, the money ultimately goes to the same places, and in essentially the same number of steps. The difference is that a few dozen Americans are out of a job instead of a few dozen Chilandians.

So now let’s analyze the economic effect of the different choices. First, it seems obvious to note that the $50,000 difference to the bottom line of the American beachwear company is significant. The company’s success depends on its ability to compete with other clothing companies. Being able to shave off a couple of dollars off the price of their finished products is significant in their bid for market share. So would it be better for the American beachwear company to fail due to higher production costs in order to support another American company (note that ultimately they both fail)?

Perhaps we could force all companies to buy American only, so no one can buy foreign and they compete on equal grounds. This would protect the competing American companies from unfair foreign advantages, such as a lack of labor laws. But what would happen to the costs to the consumer? In this example, the cost of the supply of shirts goes up 50%. Since the actual shirt is a majority, but not all, of the cost of the finished good, let’s say the total increase of the cost of production is 30%. Since the company must maintain its profit margin to stay in business, this cost increase gets passed on to the consumers. The cost of shirts goes up 30%. What does this mean to the economy? The American shirt company is saved. But the American cost of living has just gone up. Americans are paying $13 for a shirt instead of $10. How many Americans? Pretty much all of them. So let’s assume Americans buy an average of 5 shirts a year. That’s $3 per shirt x 5 shirts per person x 300 M people in America. That’s $4.5 Billion in increased shirt costs nationwide.

Ok, you say, but that money is all going to American companies. We’re creating and saving American jobs. This is true… sort of. We are saving jobs in the same way we would if we were to destroy tractors and farm equipment. We’d have a huge increase in the number of farmers, as each farmer would produce much less each year. More employment, right? Or if we destroyed computers, causing a huge surge in clerical workers and postal services. More jobs, right? Or perhaps we could restrict trade to a single city maybe, so you can only buy stuff made in your town. You’d have to do without a lot of things, but it would create a huge increase in demand in each town as people look for things they used to get elsewhere, thus increasing employment. Sounds great, right?

In other words, we could certainly increase employment by making ourselves poorer, but that doesn’t seem like a preferred option. What would happen to our economy if our nation became suddenly poorer? Every time we make ourselves richer, it is because we have made something better, made something cheaper, created something new. These forward steps always create unemployment. We make one product better, the old product becomes obsolete. We make a product cheaper, the more expensive brand goes out of business. We come up with a new idea, it replaces an entire industry, putting them all out of business. So how have we survived so far, after putting so many people out of work year after year?

Quite simply, and notably obvious, when an industry gets replaced, the unemployment is temporary as workers of that industry move to new industries. Perhaps they would work in the new industry they were replaced by, for that growing industry will undoubtedly need workers. Or perhaps there are other industries that are growing and expanding that need the additional manpower to manage their growth.

You don’t solve unemployment by protecting these failing industries. Whether they are competing against unfair foreign business practices or not, they are failing because they are less effective, more expensive, or outdated. Rather than force a universal reversion to ineffective, outdated, or expensive products (which is what protectionist tariffs and regulations are designed to do), would it not be more sensible to allow those failed companies and outdated industries to die and move their resources to growing and improving industries? That is what made America great in the past, and our interventionist politics are exactly why we are struggling to grow now.

Stop thinking in “Buy American” slogans and protectionist theories. They are economically destructive. Not because they don’t provide more American jobs (they potentially could), but because they lower our standard of living. Jobs are not the ultimate goal, it is an improved standard of living that should be our focus. Protecting jobs is not the way to achieve that goal. And when we become poorer because of protectionism, we can no longer afford things we once could, and the economy spirals downward. Counter-intuitive? Only until you make sense of the invisible hand of a free economy.

The Cycles of Thought

Milton Friedman wrote in his foreword to the 1994 edition of Hayek’s Road to Serfdom that, as we have come full circle back to the same issues that Hayek addressed in 1944 when he wrote the book, someone ought to address the questions of why we keep returning to the emotional thinking that leads us to believe that economic planning can work, and why intellectuals tend to be some of the most emotional of thinkers. The question of intellectuals is very interesting, and I’ve heard a few ideas that make some sense, but I won’t address that question here. I want to theorize on why we keep cycling our thought processes, why the political motions go in waves.

I know that liberals consider themselves intelligent and logical, but since history shows the massive failure of social engineering, it is impossible to be both logical and not see the correlation. Most liberals can acknowledge the fact that they think with their hearts, that they think the way they do because they care. The intellectuals of the left actually believe themselves capable of successful social engineering, which is either megalomania (they think where all others have failed they will succeed… it can’t be the theory, it makes too much sense) or ignorance (could they really not know/believe the massive failures of past Marxism?), but either way it’s wishful thinking. But since Marxist socioeconomic policy has failed everywhere it is tried, it must be concluded that proponents of such policy do so solely on emotional grounds.

Since the founding of our nation, there were many emotional thinkers who tried to change the system to “help” other people (mostly themselves). But the vast majority of the nation was on board with the principles of freedom on which it was founded. It lasted for decades, but things started to change as the issue of slavery became more debated, and that became one of the first waves of emotional politics (not that the freeing of slaves was bad, but you’ll need to study the real history to get the full picture, not the liberal interpretation of history taught in schools). After Lincoln, with exception of a couple of spurts of emotional ideas here and there, things went back to normal, up to the turn of the 20th century. German philosophy of social engineering grew more and more popular, and we had a huge wave of progressive thought that gave us Social Security, Welfare, and the progressive income tax. This thought lasted the duration of the Great Depression, until, with the war against the Germans (and their Marxist ideology), and the final ending of the Depression, most of the thought returned to the logical principles of freedom that produced a historically unprecedented economic growth. While the emotion based theories and philosophies never really went away, they lost most of their momentum, and the nation returned to a mostly logical track. There were waves back and forth, every decade or so, from there on out. Notable was Jimmy Carter’s presidency, which found difficulty handling the recession of the time, then Reagan’s policies restored economic stability and growth to the nation. Logical thought reigned supreme for the next several years with small swings back toward the emotional side in the next decades. Then we were attacked in 2001 and we became united in emotion again, culminating ultimately in the election of our current president, the most emotional and illogical president since FDR.

So why the ups and downs, the political shifts from right to left and left to right? Why is one generation more conservative and the next more liberal?

There must be a factor of independence and individualism in it. “I’m smarter/better than my parents and their generation, and I don’t follow their outdated philosophy.” But it’s more than that. There’s an actual socioeconomic cycle, which, I believe, John Adams put forth unknowingly:

"I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain."

The importance of certain fields of study fluctuate with its demand. As the fields of business, science and engineering grow, the economy booms with innovation and technology. With the economic growth, and the increased wealth of society, demand grows for the subtler pleasures of culture, the arts and entertainment. The transfer of study to these more dramatic and creative fields in order to meet the demand causes a glut of emotional thought, a shift of thought to more illogical reasoning. As this shift occurs, economic growth stagnates. This is both because the growth of economically productive fields slows as the growth of service industries accelerates, and because political thought during the emotional periods tends to be extremely economically damaging.

With the economic stagnation, discord and anger result in a reconsideration of philosophies, and the independent voter who last voted for the liberal leader realizes the logical fallacy, and turns back to reason. The politics are restructured, the demand for the productive fields again grows, and the cycle continues.

John Adams just failed to complete the cycle: “And once their children’s focus on painting, poetry, music, architecture, statuary, tapestry, and porcelain leads to economic crisis, their children must again study politics and war.”

Is there an escape? Can we break the cycle? No, the cycle is natural and necessary. You can’t break it without economic planning, which we’ve already noted does not work. But we can reduce the depth of the economic crises that occur at the end of the cycle. The Founding Fathers were successful for a time in minimizing these busts. How? The Constitution.

The only way to prevent devastating crises such as the one we’re now experiencing from becoming regular occurrences at the end of each cycle is to minimize the political impact. The rebalance must occur, and, while it does, the economy will slow. But the “slowing” becomes “falling” when combined with emotional political policy, unfounded in logic and reason, which burdens the economy with unnecessary weights. This is what happened in the Great Depression. We must strip the power of politicians from impacting the economic cycle, for they are ultimately destined, at the end of the cycle, to govern with emotion rather than reason, and this at exactly the most inconvenient time when the economy is poised for difficult rebalance. This is what the Constitution was designed to do. It’s time we cut government back to the size it was intended to have.

Judging A Book By Its Cover

A few weeks ago, a thought dawned on me that I found quite interesting. We talk of our outward appearances as inward reflections of an individual. We, in almost the same breath, also urge each other to avoid judgment of others from said appearances. But I realized, as I passed a mirror, that we have come to incorrect conclusions of the psychological intent of style. Our appearance is not a reflection of an individual, but rather a projection of how that individual wishes to be seen.

I have a friend at work who occasionally asks me for style advice. She even dragged me to help her pick out glasses. She doesn’t have a style for herself. It was my style that she was trying to appeal to. She wanted to know what I thought looked good.

I often ask my girlfriend what I should do with my hair. If she has an opinion on the matter (which is rare), I follow it. When I received clothes for Christmas, I even noted to my mom (the giver of said gift) that they were of a style that my girlfriend would appreciate. Did I think they looked good? Sure. But I only think so because I think it will look good to other people, particularly her.

In other words, our image is actually designed by those whom we are trying to impress. It is they for whom we dress. It’s for them that we spend time styling our hair and painting our faces. How often do you see yourself in a day? When you do, do you care? When you know that you won’t leave your house and won’t see a soul for the entire day, do you still spend the same amount of time on your style? Most people I know, including myself, stay in their comfortable pajamas, showering only when their own body odor and filth becomes uncomfortable to themselves. You simply don’t care what you look like. Even those who, we joke, are in love with themselves, are not actually in love with themselves (or their image), but rather are extremely pleased and confidant in the way they think they project to their target audience.

Thus, our style is much more accurately a reflection of the people we admire and respect rather than who we are. Of course, they are correlated in that we typically strive to be like those whom we admire. But the distinction is important. Often times there is a miscorrelation, and the two don’t match very well. For example, some may dress relatively well in order to win companionship, after which goal is achieved their interest in style is reduced. In many cases, we don’t admire people for their appearance, or opinion thereof, and thus we do not care about our physical projection to them.

We see it in the personalities across the spectrum. Jocks dress in athletic garb, not so they can join a pickup game than might just break out in the middle of the day, but because that’s the style of their jock friends. Girls tend to care very much about how attractive they are to boys in addition to how their girl friends see them, thus they spend a lot of time, money, and even discomfort for their appearance. Those we would classify as nerds tend to admire those who would respect them for intelligence far more than appearance. Thus they seem oblivious to style completely. Those who claim independence and non-conformity typically conform to a style that is widely accepted by other supposed non-conformists.

Our appearance also reflects how much weight we put on the opinions of others. Some people care little of what others think. These are the true individualists of style, and tend to look rather ridiculous at times. Others care a great deal, and spend a lot of time and effort trying to look just as they ought. Most of us have a range of influences, from wives or girlfriends, who typically have a great deal of influence, to close friends, who also tend to have strong sway, to professional peers, whom we’re often trying to impress, to strangers we often pass by, whom we either try to blend in with to not draw unwanted attention or intentionally clash with to draw attention, depending on our personality.

When we balance the weight we give to each of our influences, the sum total is our reflection of style. We can tell a lot from a person’s appearance. It just isn’t what we typically think we can tell from it.

Judge a book by its cover? No, that’s not what the book is about. The cover's just there to attract readership.