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Sunday, July 26, 2015

Anarchism is a Loser's Game

The following is a reply to a member of an anarcho-capitalist group. The response is "in-line" and the portions of the reply which are quoted from the AnCap are presented in italics as well as being enclosed in quotation marks. The illustrations and links are added for color and interest.




"Consider for a moment that the history of government is, what, 10,000 years? How much time does a species need to "fine tune" a class system (that, as a rule, allows some in that species to use violence to enforce their will over others, either through popularity contests or some other means that legitimizes the ruler(s)) so that it works without leading to total collapse?"

I would contend that the complexity of the problem is second only to, if not on par with, the grand question of science. What I mean is that the number of factors which exist to be manipulated and understood, and the measurement of second- and third-order effects from manipulation of the factors, and the fact that oftentimes the manipulation of factors reveals information hitherto not even conceived, is similar to the way that the scientific method tends to raise more questions than it answers. The complexity of the problem is augmented by the fact that the parameters of the experiment are constantly shifting - the human condition is markedly different from what it was even at the beginning of recorded history. Additionally, like science, the systematic analysis of the efficacy of the experiment is a novel development and, like science, the practice and interpretation of the method is subject to significant emotionalism from society.

For a short answer to "How much time?" I offer these two rhetoricals: How much time does a species need to fine tune its understanding of the universe? Would the abandonment of the rigidity of the scientific system be justified due to its failure to thus far produce complete understanding?



"Remember, you're arguing that some people *must* possess the "legal authority" to force their will on others with threats or actual use of violence in order to meet some utilitarian end."

As I've argued elsewhere in these threads, elimination of a legal governing apparatus does not necessarily reduce coercion; nor does it eliminate a class system. Realistically, it only reduces coercion de jure and replaces it with coercion de facto: the claim that a man is free to leave his job, and is therefore not "coerced" or "enslaved" is naive. No economy can be comprised entirely of successful venture capitalists, all economies require the skills of laborers and as such any economy outside of the strictest Planned Economy will have stratification.

The expense of vital services comprises a greater portion of the income of the poor. In an anarcho-capitalist society, where all services are rendered by private (and ostensibly, for-profit) businesses, this means that the poor must either prioritize which services they will pay for - to include vital services - or they must collectivize in order to bargain for them, a practice which has been sneered upon by your associates in other portions of this thread.

Why the freedom to freely associate and form supportive organizations which create bargaining parity is somehow immoral is beyond me. I do not understand why it is necessary for the business owner to hold all the cards if the only requirements for the AnCap model are the right to freely contract as sovereign entities; but it seems that to some, the right of the business owner to dictate wages is more important than the right of the worker to freely form a coalition in order to negotiate.

Returning to the point of the expense of vital service, I would like to comment on the market implications of a game theory model; the first-order effects of which you can yourself observe any time you see, say, two coffee shops on the same block:

Consider a beach of length X. On this beach are two ice cream vendors, selling an identical product at an identical price. The beach is populated evenly along its length by bathers who, realizing that the product is identical, will minimize the effort/time cost of obtaining ice cream by patronizing the nearest vendor. Where do the vendors establish their stands?

The optimal solution is that one vendor (Vendor A) establishes his stand at 1/4x, and the other (Vendor B) at 3/4x. In this arrangement, each vendor has half the beach as clients and client cost is minimized, with no client having to travel more than a quarter of the beach's length to obtain ice cream.

However, once the vendors are imbued with a profit motive, the optimal solution fails: Vendor A realizes that by moving his stand immediately next to Vendor B, he will control three quarters of the beach, even though only one third of his customers enjoy the convenience of having a vendor only .25x away, and some must travel as far as .75x for ice cream. Vendor B then moves his stand to the other side of Vendor A, effectively reversing their positions. This dance continues until a Nash equilibrium is reached with both vendors as close to .5x as possible. Each vendor now serves exactly as many clients, and generates the same revenue, as in the socially optimal solution. However, half the beach is now experiencing an exaggerated cost in obtaining ice cream.



When it's just ice cream on the beach, it's hard to care. When it comes to vital infrastructure, however, the difficulties of this arrangement become clear. Our mixed economy already places a premium on proximity to services such as fire and police departments, hospitals, schools, and commercial districts. The wealthy - who could afford the extra cost in transportation to these areas - instead pay a higher initial cost to station themselves near to them. The poor, who already have difficulty obtaining the services in the first place, now have an additional cost attached to even reaching the services, which exacerbates the stratification of the society.

The ability of the poor to deal with monetary inconvenience - ill health, temporary unemployment, vehicle breakdown, etc - is greatly reduced. These issues make it such that social mobility is exchanged for economic survival. The poor cannot afford to buy healthy food or buy supplies in bulk, so they purchase cheaper items which provide poorer sustenance or which have lower durability; the net result of which is that the cost of the same necessities which the wealthy buy not only claim a higher percentage of the poor's income, but that they are forced to spend money more often. The percentage of their cost of living isn't simply higher, it is disproportionately so.

The Anarcho Capitalist model of private toll roads, private security, private healthcare, etc. creates additional burdens on the poor. When you say:

"That is, the people who are on the receiving end of those threats or actual violence are, by all accounts, nothing more than drones meant to carry out the will of the rulers."

I see presented as an alternative a method whereby the poor are made drones, kept poor so that they can continue to buy services and cheap products to bolster the accounts of the entrepreneurial class.

Which leads us to the question of violence.

Most anarchist traditions rely on the voluntary participation of people in the social structure. The right-wing variations of them typically hold that private enterprise will provide goods and services through payment and contracts.

The question becomes: in what manner are these transactions and contracts enforced?

It is tempting to model these societies on the assumption of "enlightened self-interest," where the reputation of a company is what keeps it honest, and that companies will cooperate to provide socially optimal solutions. Those who propose this theory posit that the incentive towards profit maximization and rational actors on all sides of the arrangement will ensure the fair, impartial, and optimal distribution of goods and services - to each according to their ability, and assuming that ability is sufficient to match need. As with the ice cream vendor experiment above, the veracity of which can be determined in nearly any shopping center, this is not how human beings operate. And even in cases of game theory where the "winning" move - that is, the one which results in the maximization of profit to the player - assume rational actors on all sides, in many games the winning move is the one which disregards social cooperation.

Take, for instance, the "Centipede Game." As I've rambled on quite a bit already, I will leave it to you to familiarize yourself with the setup in the interest of brevity. There is an article on Wikipedia which does a fine job of discussing moves, payouts, and the empirical data of how people actually play.



In such a game played entirely by rational actors, the Nash equilibrium is reached on the first move, which ensures that the first player wins, though it means a much lower payout than the potential maximum. It is noted "Palacios-Huerta and Volij (2009) find that expert chess players play differently from college students. With a rising Elo, the probability of continuing the game declines; all Grandmasters in the experiment stopped at their first chance." This means that there is real experimental evidence that rational play does not result in the maximum payout. As anarcho-capitalists rely on the assumption of all parties to the social structure to be "rational," it will follow that such elimination of incentive - or requirement - to cooperate is inefficient. However, given the variation of rationality in the human race, various levels of apparent cooperation can be expected, with the various "players" cashing out based on two variables - 1) their individual threshold for a desirable payout, and 2) their assessment of the trustworthiness of the other players. In all cases, "defection" is inevitable as all players seek to maximize their profit and will do so the instant they assess the game is reaching imminence.

When applied to the supply of goods and services, highly rational actors can maximize profits by "playing rationally," that is, by screwing over the other guy as quickly and as often as possible. This does not bode well for the development of trust necessary for "enlightened self-interest" and all that is necessary for "enlightened self-interest" to fail as a social model is that barest bit of self-interest which causes people to "defect"

What this means is that, in the absence of methods which enforce cooperation, theft, fraud, and extortion become widespread. This can be witnessed in Bitcoin markets, where people regularly pay for goods or services which are undelivered. Without any means of enforcement on the trade, there is no recourse. Essentially, the "threat of violence," as AnCaps and libertarians so often put it, is necessary to ensure cooperation.

To tie it all together, let's consider the following scenario, based on the quote "Your right to swing your fist ends where my nose begins"



I am happily swinging my fist about when it connects with your nose. Whether this meeting was intentional or not is immaterial: You rightly demand an apology, and because in this scenario I am the sort of asshole who will do what he can get away with, I refuse. Not only that, I continue to swing my fist about, with no regard for your nose. You attempt to take responsibility for the well-being of noses everywhere, and attempt to exercise your right to self defense by attacking me. However, it seems I am an experienced fist swinger, and you are beaten. You appeal to your friends for support to deal with the fist swinging threat. As a person of limited means, you are able only to gather a few friends, but because this is a free market society violence is also a commodity for sale, and you pool some funds to retain a small posse in order to come and deal with me. When next you find me, however, you discover that I have not only a physical, but also an economic advantage: I am able to retain in my service a squad of the finest, most aggressive, and best equipped bodyguards.

You are clearly wronged, but due to the total privatization of all commodities, and the inherent stratification of wealth, you have no recourse in this scenario. The only possible way to deal with me would be to entreat an equally advantaged person to spend their wealth in support of your cause. Because of the security forces each party is able to hire, this results in some small-scale warfare which does not necessarily result in a just outcome, and which causes danger to innocent bystanders.

Government is an administrative apparatus, which exists primarily to deal with the affairs of those it governs in a way which minimizes expressed violence through the threat of violence. It is capable of enforcing contracts and ensuring the equitable distribution of goods and services by pooling resources and making them commonly available. One of these resources is justice.

You said:
"I think you're conflating what you have with why you have it. Those things exist and increased once people became freer."

Those things I mentioned which exist certainly have an aspect of freedom to their proliferation, but they have far more an aspect of planning to them. The light-socialism of Scandinavia is empirically responsible for the ascendancy of the people therein - by many metrics, they are among the happiest, most equitable, best educated, most mobile, and least stratified people on the planet. If their wealthy suffer for their tax rates, it is incomparable to the suffering of the poor who live paycheck to paycheck, living in constant dread of the next calamity.

Someone else in these threads stated something to the effect that the sole commandment of the human condition is "to survive". I call bullshit. Beasts just survive. We have reached our place on this planet through two things: social cooperation, from the human hunter-gatherer herds to the modern corporations or Scandinavian light-socialist governments; and the ability to modify our surroundings.

Any method which reduces the human condition to "survival" is a backwards step, sociologically, morally, and evolutionarily.

Friday, July 24, 2015

The Morality of a Living Wage

Los Angeles County, a region with which I am well familiar, recently approved a minimum wage hike to $15 an hour over the next several years.


I'll admit that when the $15 an hour minimum wage was initially being discussed - towards the tail end of the Occupy movement and shortly before a measure to establish the wage appeared on a Seattle ballot - I was skeptical of the idea and disposed to oppose it on the typical economic alarmism and sneering at the demographic stereotypically assigned to such jobs.

After having the discussion over and over again, and researching the issue, I eventually came around. By the time the LA County bill passed, I was getting pissed off by short sighted and flawed macros such as this one, which was running the conservative circuit on my Facebook feed today:


Besides the fact that this seems to think that the minimum wage would only apply to fast food workers, rather than raising everyone's wages; it also ignores the critical fact that the emergency personnel (as well as many retail clerks, military personnel, office professionals, manual laborers, and professional artists) are in fact also severely underpaid. It suffers from an elitist conceit that appears to argue that, because a person is new to the workforce, or performs a menial task, they are not permitted to make enough money.

I entered into an argument over a similar graphic to this one and was so put off by my opponent's cavalier dismissal of basic human dignity (complaining that such dignity comes at the expense of making him pay a marginal increase in his cost of living) that I collected the various data that had informed my reformed opinion.

Society is a cooperative enterprise. In the various liberal traditions, including democratic ones such as our republic, that enterprise further becomes collaborative. The system exists for the benefit of everyone, not simply to prop up the lifestyles of a few elite. We are remiss if we do not maintain this cooperation or advance the enterprise in a way that at is at least as beneficial to subsequent generations, and we ought to strive to constantly improve. To promote a paradigm in which entire segments of society are impoverished is antithetical to the entire premise. This is the gestalt behind the 1938 Fair Labor Standards Act, which established that workers will receive wages sufficient to maintain “the minimum standard of living necessary for health, efficiency, and general well-being.” These words, appear to me to establish that there is a legal requirement that the minimum wage be a living wage.

An easy way to check the level "necessary for health, efficiency, and general well-being" is to examine the welfare system. This system, established as a safety net, is designed to meet the needs of a person and their dependents in a manner consistent with basic human dignity. A 2013 study by the CATO institute concluded that 34 states and the District of Columbia pay welfare benefits with a value above the minimum wage. Of the 16 other states, 10 of them are among the states with the lowest cost of living in the nation and 6 of them - Mississippi, Tennessee, Arkansas, Idaho, Florida, and Kentucky - are in the bottom quartile of national average income. And a recent DoD review found that record numbers of soldiers were on supplemental income - primarily food stamps - in 2014. 

The fact that the economic safety net is set at a level above the minimum amount of money we agree can be paid to a person is the clearest possible indicator that the minimum wage is too low.

What does the social safety net say a dignified wage is? In California, the maximum welfare benefit is equivalent to a pre-tax income of $37,160/year, or $17.87/hour. This benefit includes support for dependents, as the MIT calculator for a single person living in LA county with no dependents needs to make $12.44/hour - an increase of 38% over the current state minimum wage and 24.4% over the state minimum wage in January of 2016. A couple with one person working needs to make $19.53/hour. A single parent needs to make over $25/hour. 

The California minimum wage in 2016, $10/hr, will still fail to match the highest buying power the minimum wage has had - the minimum wage in 1968 had an inflation-adjusted purchasing power of $10.51 in 2012.

In the post-recession economy, we are not just talking about 16 year old kids starting their first jobs when we talk about the minimum wage. We are talking about people re-entering the workplace. We are talking about people who had to accept any job they could find after layoffs. In 2013, Pew estimated that as many as half of minimum wage workers were adults. The 2013 Bureau of Labor Statistics report shows 49.6% of workers making minimum wage or lower were over the age of 25. The economic policy institute shows that the average age of a minimum wage worker is 35. 88% of them are over 20 and 28% have children. 55% work full-time.

This means that when we talk about keeping the minimum wage too low to make a living, we are impoverishing people who are trying to support families and in many cases find a way back to a job they lost circa 2008 through no fault of their own. We are additionally impoverishing people who, without additional income, are likely to become saddled with student debt, if they can pursue an education at all. These same people are increasingly likely to return to live at home, if they can ever reach a financial position to leave in the first place.

So in 34 states and the District of Columbia, the social safety net is not simply helping people "get back on their feet". The social safety net is practically a part of the wage structure. In nearly 75% of the nation, business is allowed to operate with increased overhead because the government is subsidizing wages for them. In cases where workers are holding two or three part-time jobs which are not required to provide any benefits, the government is also subsidizing the benefits.

It's time to adjust the wage.