CNN Poll: 56% of Americans Recognize the Obvious

I thought about blogging this CNN story the other day when I read it, but obviously a lot of other important stuff has been happening instead...  Additionally, I don't really put any stock in public opinion polls because what people say can be easily led one way or another by the questions themselves, and as any first year marketing student probably knows; what people say and what they actually do are often widely divergent.  That said, CNN reports:

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government's become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. Forty-four percent of those polled disagree.

What is sort of irritating about this is that government is ALWAYS a threat to liberty.  Government is liberty's opposite.  Isn't this, by definition, completely self-evident?

What is government?  Not to be too ridiculously pedantic, but let's go to the dictionary, shall we?

-Noun

1. the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states; direction of the affairs of a state, community, etc.; political administration: Government is necessary to the existence of civilized society.
2. the form or system of rule by which a state, community, etc., is governed: monarchical government; episcopal government.

And liberty is, of course, the absence of control being exercised over individuals' actions.

It's really that simple. Intrinsically, government is against liberty.  They are oppositional concepts... Of course, many might argue that in some contexts, this is ok.  Government restricts some "liberties", such as the freedom of people to murder or brutalize each other.  True enough... In one sense, one might argue that once a law is made establishing that murder is not ok, and that top-down punishments will result if an attempt is made or carried out, then it is fair to say that liberty has been curtailed.

Yet, if the goal is maximizing liberty, then the first step to accomplishing that is protecting individual rights - one of the most important of which is naturally the right to life.  Essentially in this role, government's job is simply to play referee and make sure that no one is violating the rights of others through violence, theft, fraud, or murder.    Government is only one of several possible ways of protecting natural rights (which of course are not derived from government but are intrinsic and self-evident in all sentient beings who are able to assert them), but unfortunately it is historically actually probably the worst one I can think of.

Throughout history, governments have never limited their role to protecting liberty.

Instead they've typically just been a means of providing fancy titles and false-legitimacy to thugs and tyrants who's interest lies purely in controlling the bulk of the people under their charge for personal wealth and status.  If the goal is concentrated power, government is always the way to go.

George Washington said it best, I think:

"Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master."

To my mind, the government has overstepped its bounds the very second that it is no longer purely a protector of liberty and has moved into dictating the terms of people's lives.  This includes telling people what activities they can pursue, what kind of houses to build, where to live, how much they can or cannot accept as employees or how much employers can offer, what kinds of food they can eat, drugs they can take... The list is endless.  Basically anything the government is doing which restricts the voluntary activities of individuals is an affront to liberty.

The US government is REALLY far down that road already... So honestly, it's a shock to me that the CNN poll didn't result in 100% of people believe government is a threat to liberty.  That's exactly what it is by definition, and you have only to look around you occasionally to see the amount of freedom that is curtailed here.  It's not the land of the free or home of the brave in really any greater sense than Russia is in 2010!

In fact, when I was in Russia, the border guards and police pretty much did exactly what ours do...

More importantly, since every incentive is geared towards expansionist government, they tend to quickly begin curtailing people's freedom of choices on grounds that have nothing to do with keeping the barrier of equal liberties in place.  The US was a unique experiment in the history of government and our Bill of Rights was a truly monumentous step forward.  But it seems we're actively engaged in taking 10 steps back...  What's funny to me, though, is the partisan hackery that surrounds this kind of thing on CNN.

For example, in the comments, Pedro says:

"Funny that so many GOP respondents think the government is a threat given that it was the Bush administration that tried to do away with Habeas Corpus and had the military and NSA listening in on the phone conversations of American citizens without having to secure a warrant.

Yeah, I for one feel much safer with the government now.

Really Pedro?  Cause last I checked, the current President Obama has done every single thing on that list as well!

There's a ton of comments about how no one was complaining about this kind of stuff when Bush was president... But ya know what?  I sure was.  Most of my friends were.  Isn't having consistent principles and actually paying attention to the real policy awesome!?  No one should feel safer today than they did 2 years ago.  None of the policies have changed and many have gotten significantly worse.  What's more, in my opinion anyway, there is added danger precisely because so many people view President Obama as different than Bush.  The media now actively ignores the Iraq & Afghanistan quagmires, they ignore his lawyer's defenses of wiretapping, the lack of action on unlawfully detained prisoners held without trial, they ignore virtually everything except his political advocacy of horrendously bad domestic policy ideas.

Additionally, the economic situation - which make no mistake, was abysmal under President Bush - is actually worse in 2010 than it was in 2008!  The misallocated assets held by banks around the country have never been allowed to clear, the Fed has pumped trillions of dollars into the economy to keep a rapidly deflating bubble from fully collapsing as it needs to, and thousands of pages of new regulations are going to strangle American businesses - just as the 78,000 pages of legislation under Bush did before.

Oh, did I mention Obama just reauthorized the Patriot Act?

That's the crazy thing about government, though!  It almost never repeals the horrific laws of the past administrations, no matter how awful, and merely continues piling up new ones on top of the old.  It's kind of an exponential growth of stupid, destructive and liberty crippling policy and has been a constant theme throughout history.

So... Uhh... Yeah.  Government is a threat to liberty.  Congratulations, CNN, for pointing out one of the biggest understatements of all time.

The False Belief in True Models

This whole post over at the Junk Charts blog is worthy of being on my blog and probably should have been written by me.

An excerpt:

"Unfortunately, Gross apparently did not speak with a statistician before writing this article. A statistical modeler would compute

REALITY - FORECAST = ERROR

which is different from the reporter's perspective that

REALITY - EXPECTATION = OVERPERFORMANCE (or UNDERPERFORMANCE)

What's the difference?

***

The statistician takes reality as the truth, and any deviation from reality as a modeling error while the reporter takes "expectation" (the forecasts) as the truth, and any deviation from expectation as overperformance (if positive) or underperformance (if negative). When the model's forecasts are treated as yardsticks for performance, one is assuming that the expectations are set correctly, which means the model can never be wrong!"

This phenomenon is startlingly and disappointingly common within all aspects of journalism and politics. In this blog post, the author (Kaiser Fung) is referring to the Olympic medal winning prediction models, but how often do we see exactly this logical error being made by reporters and politicians?  What's more disturbing is when you see these errors being made by other types of scientists and economists, and this happens pretty frequently!

For example, policy supposedly designed to combat global warming is entirely based on assumptions coming from predictive models which have often proven to be wildly inaccurate. Now, sure... Decent scientists will see the inaccurate model and say "Ok, how do I make this better?", but the reporter or politician will often implicitly suggest that in fact the model is correct and reality simply didn't match expectations for reasons unknown.  They then typically proceed to push through policy driven based on those failed models as "truth".  This represents a sort of blind faith in the infallibility of the model, even when it turns out to fail to reflect reality.

A point that Fung doesn't cover which I'd like to bring up, however, is that sometimes the very premise of building models via statistics is a flawed concept from the outset.

Unfortunately, most of modern (Neo-Keynesian) "macroeconomics" is based on exactly this fallacies.  When reality - for example the 2008 stock market crash - doesn't line up with the models, some scientists will go back and try to re-work their model to be more accurate at predicting future events... But what macroeconomists fail to understand is that economics is not about Keynesian "aggregates"... Economics deals with individual human action, which in turn is based on a wide array of unknowable (to researchers) values and motivations spurring those individuals to act in one way or another.

Building accurate models in economics would actually require economists to be able to plug in data from millions of variables (each individual) which they are absolutely not privy to.  This is why it's far better to view the whole field from the framework of axiomatic human action, than it is trying to aggregate all demand and all supply - and thus all individual decisions - into big lumps of "economic activity" that can be manipulated or controlled from on high.  It is also ironically why the folks who don't really view economics as "predictive" science (any more than an evolutionary biologist would feign to "predict" the next phase of evolution) are always the best at predicting future outcomes of current policy.

So anyway... Belief in the infallibility of models is a huge problem, but so is building statistical models in some cases & fields at all when that's entirely the wrong tool for understanding reality.

TED: 21st Century Motivation

Dan Pink discusses the (social) science of motivation at TED:



Watch the video first, and then I have some points to make... Done?  All right then.

Dan Pink makes some fantastic points throughout this speech, yet as surprised as he believes I should be and assumes that everyone else in the room is to learn this shocking "new" information, I am completely and uniformly... not.

Why not, you ask?

Am I some kind of super-genius who knows more than sociological researchers or Nobel laureate economists from the London School or the University of Chicago?  Probably not.

However, I would suggest that it is possible that I have an understanding of incentives (motivations) & economics that Dan Pink at least, and possibly those other folks, simply have not taken into consideration.  For those who didn't actually watch the video like you were supposed to, Mr. Pink explains that for certain types of jobs - specifically creative or "right brained" jobs which require intelligent, cognitive problem solving as opposed to more mechanically repetitive jobs - the "standard" incentives of higher wages or disincentives of being fired don't actually work.

And he's not just saying that they don't work well... He's saying that they actually work almost completely the opposite of their intended purpose to the extent that they are tried.  In consistent social experiments, Dan notes that sociological researchers are finding that in creative problem-solving situations, offering people more money to do a job faster actually correlated to poorer performance than people who are offered lower rates of pay.

Seems odd, right?  Dan certainly thinks so.

But I don't.  At all.  You see, it seems odd only if your conception of incentives is purely financial or monetary.

Clearly, that's what Dan is referencing and is the one major flaw he seems to repeat throughout this speech.  It's also a stereotype of economists and so-called "free market" supporters that is actually completely untenable, and is why I've decided to write about this today.

The premise of his talk is that "science knows" that people don't actually respond to incentives in the way economists and (many, but definitely not all) businesses believe...  While he's certainly right that the business environment is changing for Americans in the 21st Century into areas which "traditional" financial incentives have less meaning for employees, he actually makes no challenge what-so-ever to the assertion that people respond to incentives, which is sort of the revelation he's trying to support.  What's more, essentially his entire speech at TED actually supports the basic Misesian "Action Axiom" instead, summed up as follows:

"Action is the purposeful employment of means to achieve ends in accord with the actor's values."

Note the crucial qualifier: "in accord with the actor's values."

...Not the proscribed values of researchers, not the values of other people...  The values of those individuals doing the action and no one else.

Where Mr. Pink gets confused is that his conception of what constitutes an "incentive" has been grossly narrowed to include only the kinds of ideas bandied about by the same types of economists who are hung up on aggregating supply, demand and every other market process in order to quantify & create fancy, elegant and entirely useless macroeconomic statistical models.  What's worse, is that he pushes this false assumption onto both the audience (who for all I know share his misconception) and to essentially all economists.

For example:

Dan discusses the success of Wikipedia over Microsoft Encarta in the mid-1990s, noting that Microsoft did everything "right" according to what people thought about incentives at that time.  They hired writers, management, paid everyone well and yet Encarta is used by almost no one, and Wiki is obviously the go-to source for just about everyone today.  Dan says that;

"Ten years ago you could not have found a single, sober, economist anywhere on planet Earth who would have predicted the Wikipedia model."

But he's wrong about that.  Extremely wrong, in fact.  He's failed to take the Austrian School into account on this point, and the entire speech is unwittingly an ode to Ludwig von Mises' beautiful treatise, "Human Action" (PDF) first published in 1949... Undercutting the above statement severely.

I suppose in all fairness, many economists don't exactly view the Austrian crowd as "sober", but that's a discussion for another day, and I doubt Mr. Pink would quibble over that point anyway...

On the issue of human motivation, however, anyone who's remotely familiar with the Austrian School of Economics (which has been around over 100 years and has successfully predicted and clearly explained many major economic events, such as the Great Depression, the steep rise in inflation since the 70s, various shortages and bubbles & even the current economic catastrophe) should be explicitly aware that the school's views are completely in line with "the science" being reported on at TED, and always have been.

I would go so far as to suggest that had Mr. Pink approached any economist from Walter Block, Bob Murphy or Mark Thornton all the way to even a few non-Austrians like George Mason University's Walter Williams or the brilliant Monetarist, Thomas Sowell, and said, "Would you believe that an encyclopedia who's only rewards for contribution were the satisfaction of writing about a topic you are interested in could out-compete a professional highly paid encyclopedia like Encarta?" and I can almost guarantee that every single one of them would have resoundingly said, "Of course!"

This is because, for any economist who actually understands the nature of subjective value (which is the whole deal with the Austrian School), the question is already answered within the premise.  Do the people contributing value the reward they're being offered - in this case, international publication in subject areas they are acutely passionate about?  YES... Immensely!  Is the reward monetary? Not at all.

What's even more amusing (to me) in the Wikipedia example is that the founder of Wikipedia, Jimmy Wales, is a pretty hard core Objectivist-leaning libertarian!  Funny how it's always the libertarian crowd who winds up correctly anticipating the way real humans are actually going to behave in the real world.  It's endlessly perplexing to me how "we" wind up getting told repeatedly that we're crazy, only to be completely vindicated in our views a little while later... Of course, after being vindicated, we just go on to being called "nuts" about something else.  Good times.

But I digress...

The lesson to learn here is one I've written about repeatedly on this blog.  The goal of economic activity isn't to arbitrarily move around some quantity of dollar bills from one party to another... It is instead to tangibly improve the lives of all parties involved in the exchange - based solely on the judgment of those individuals involved.

And that... is the fundamental point here.

Understanding that human beings act to pursue things that they value, and that values are subjective and dependent entirely on the individual in question means that monetary incentives are most definitely not the only types of incentives people are going to respond to.  It should also come as no surprise that people with higher levels of intelligence, skills and the ability to creatively solve intellectual and artistic problems for a living are motivated far less by monetary concerns (which we can usually assume they've largely already secured) and far more by the pursuit of besting challenges and rewarding experiences.

As Dan Pink puts it, people are looking for "Autonomy, Mastery & Purpose ".

That they are, Dan... That they are...

Additionally, the last few decades of American culture has shifted employment towards precisely these kinds of incentives.  Granted, it's not all that widespread yet, but the internet is making it possible for people to work from home, and many companies are doing exactly that with their employees.  In fact, as noted a few weeks ago, Tim Ferriss wrote a book advocating such things.

At any rate, I think that the vast majority of what Dan Pink says in that video is awesome.  It falls right in line with what I've observed about human nature since I was a kid, and it doesn't surprise me to find that experiments are backing up that observation consistently.  But unlike the so-called "Behavioral Economics" crowd (who on this issue are a lot like 15 year olds hearing Led Zepplin for the first time), I am under no delusions that I'm the first person in the world ever to figure this out.

Daniel Pink could do with a serious reading of Human Action.  Had he gone into this talk with an understanding of the Austrian School position, and certainly with more knowledge of Ludwig von Mises' work, he might not have made the foolish claims about economists that he did, and more importantly, he might have better understood that not only are people not behaving unpredictably or surprisingly... They are, in fact, behaving perfectly in line with what any decent observers of human action would expect.