Monday, July 27, 2009

Peak Column #7: What is to be Done?

Welcome to the final entry of Rules for Radicals, a Libertarian propaganda column blatantly and unapologetically written with the intent of luring wayward Progressives and Conservatives away from their respective flocks. I’d like to think we’ve picked up a few disillusioned members of each camp over the past few months, thus expanding my readership beyond the five or six other Libertarians on campus, possibly well into the double-digits. This may sound modest, but compared to other Libertarians’ efforts to spread free-market gospel, it really is the journalistic equivalent of a three-minute mile.

Today’s column will take your dogmatic faith in free markets as a given, so that we may focus on a more practical matter: Strategy. If you are a Libertarian, you believe in small government, free markets and individual liberty. Unfortunately, governments in the western world have been systematically abandoning these principles over the past 100 years or so. We need to understand this trend if we are to have any hope of reversing it. Why has the past century been so cruel to us?

Libertarianism is a tough sell because it has nothing to offer its potential converts. Saul Alinksy, patron saint of community organizing, taught that successful organizations always address the self-interest of their supporters. This explains the success of movements that seek to increase the size of government, since the expansion of central authority implies an expansion of the ability of that same central authority to reward its members. Lenin was able to stir up violent, chanting hordes of followers because he advocated for the redistribution of aristocratic wealth to those same hordes. What material benefits await supporters of Libertarian public policy? Subsidies? Corporate welfare? Power over the lives of others? Umm, no. Libertarianism simply can’t offer the kind of corrupt incentives necessary for effective mob politics.

This is why Libertarians are so rare, they would qualify for federally-protected wildlife habitats, while you can’t open your car door on campus without hitting a Progressive. (Conservatives are somewhat less common, but rip a few donuts in convocation mall and I’m sure you’ll connect with a few.) The traditional Right and Left are both supported by a critical mass of self-interested recipients of government-allocated privilege. Libertarianism is an ideology fundamentally opposed to such privilege, so our ability to recruit and retain supporters is limited.

Now we understand why free market policies have been losing favour since the advent of democratic governments. The second question is, can we reverse this trend and actually implement Libertarian policies, despite our failure to draw support from interest groups? Even better, can we do this without resorting to politics by other means, i.e. retired generals, tinted aviators and five o’clock shadows? In keeping with the theme of pilfering our ideological opponents’ catchphrases – “Yes We Can.”

Call me naïve, call me insane, or (even worse) call me a Whig, but I am optimistic about the future of Libertarianism in the Western world, for two reasons.

The first is the rise of China and the other East Asian economies, who are adopting free market policies almost as quickly as the west is abandoning them. One of the main reasons why communism collapsed in the USSR was that the capitalist West existed, and was clearly a much better place to live. This discredited the Soviet government in the eyes of its population. The West of 2009 is not a communist wasteland on par with the late-game USSR. But it is also not the dynamic, innovative world leader that it once was, and the situation is not improving. If free-market reforms continue apace in China, and creeping socialism goes unchecked in the West, a day will come when our voters, intellectuals and politicians will not be able to ignore the superiority of capitalist institutions at generating wealth, prosperity and human dignity across the Pacific Ocean.

The second factor is the rapidly decreasing costs to individuals of finding and verifying information. Any curious, intelligent person with an internet connection can compare Libertarian arguments against their alternatives at no cost. Journalists, authors, academics and politicians are now forced to avoid lying, misleading, or contradicting themselves whenever there’s a camera rolling, lest they wind up the PR equivalent of the Star Wars Kid. Bloggers and columnists can call each other out on factual questions in open forums for all to see. Economic growth statistics of free and unfree countries can be compared with a few clicks. If you believe, as I do, that you are on the side of truth, this is a good thing.


Tuesday, July 14, 2009

Peak Column #6: A Propogandist Walks Among Us

I think the secret’s pretty much out after my last column. Rules for Radicals is not written to entertain and enlighten. The column you’re reading is actually pure, unfiltered, 180-proof Libertarian propaganda. Scary stuff, isn’t it? A real-live propagandist at SFU, walking by you in the halls, sitting next to you in class, and even writing a column for your school’s otherwise respectable newspaper. If it’s any consolation, the political movement that I am quite unashamedly shilling for is not particularly prominent or influential – not yet, anyways – so you shouldn’t freak out or anything.

But if you intend to continue reading, you should definitely be on your toes. Remember, I am a demagogue and a charlatan and a hack, if not worse. Apparently you are brave (or foolish) enough to yield several minutes of your attention so that I may practice my chicanery. I assure you I’ll be making the most of it, so be warned: Open your eyes, son and keep those hands up.

My goal today is to convince you to drop whatever political beliefs you currently hold, and become some sort of radical Libertarian. For all my talk of deception and Jedi mind tricks, I am convinced that the Libertarian worldview is self-evidently true, and thus mere exposure to its tenets should be sufficient to generate some conversions.

So really, all I’m asking you to do is become familiar with the Libertarian thought process. Is this really so terrifying? I’m sure your current set of beliefs are robust enough to withstand some temptation. Just think of it as snake-handling, except you’re demonstrating ideological, rather than religious faith. If Libertarians are nuts, than leafing through our holy books will only confirm this. If the Sun-God Ra truly watches over you, the cobras won’t bite. There’s no risk at all, unless you suspect your faith is misplaced. Injections of Libertarian venom are quite painless, in any case.

Moving right along, let’s pull out our first snake: The success of Libertarian public policy at generating wealth, prosperity and material comfort. As Deng Xiaoping said, possibly channeling the late Michael Jackson: It doesn’t matter if a cat is black or white. If it catches mice, it’s a good cat. Xiaoping was talking about the introduction of capitalist, free-market reforms in China. Who cares whether a set of policies is historically defined as capitalist or communist? Use what works. That’s what Xiaoping did, and over the past three decades of Libertarian-themed reform, China has transformed itself into a lean, mean mouse-catching machine. Score one for free markets.

Of course, that’s just one example. Perhaps China experienced unnaturally good weather over the past three decades. Or something. Does this trend exist anywhere else? Fortunately, Wikipedia is kind enough to grace us with an entire sub-category entitled “Economic Miracles.” Click away, and note what kind of policies were implemented immediately before each of these “miracles” occurred . Can you identify the common theme? Hint: It starts with an “F” and rhymes with “Tree Markets.” Any honest evaluation of economic history leads us to the same conclusion: Whence go Libertarian policies, prosperity and wealth soon follow, while Socialism cuts a wide swath of destruction, poverty and tyranny wherever she treads. If you don’t take my word for it – and really, why would you? Your mother warned you about columnists like me – please do look into it for yourself. The internet isn’t hard to use.

The second test of faith we’ll administer is a short reading list expounding the theoretical and moral case for libertarian government. I’m sure you’ve got enough people assigning you reading lists as it is, but as an intelligent and honest seeker of the truth (and thus an elite member of Rules for Radicals’ target audience) you have a moral and intellectual obligation to familiarize yourself with what was until recently the dominant view on economic policies and effective government in the Anglo-American world. If acquiring said familiarity triggers your Progressive wrongthink detector, remember: You’re just reading these books to better understand the mind of the Neo-Liberal enemy. To defeat the Libertarian, you must first understand him - If you understand him, however, it may already be too late. I warned you this would be dangerous.

Our first assigned reading will be The Constitution of Liberty, by F.A. Hayek, available at a library near you. Following that, you’ll be looking into the collected works of Milton Friedman, starting with Capitalism and Freedom. Murray Rothbard’s Man, Economy and State, while not for the faint of heart or short of time, is required reading once you’ve developed a taste for the stuff. Before our next column, your conversion to the Dark side – excuse me, the Light side –should be complete.


Wednesday, July 1, 2009

Canada Day

What better way to celebrate Canada Day than by spending the morning leafing through Wikipedia and Niall Ferguson's Empire for a refresher course on Canadian history? In 2009, there's really no excuse to remain ignorant on this, or any other subject. Unfortunately, as impressed as I am by Wikipedia's performance on Canadian history, I am even more impressed (or would it be unimpressed?) by the length and breadth of their article on light saber combat. With one hand the open-source encyclopedia giveth, with the other it taketh away.

As my American friends are quick to point out, Canadian history is not nearly as sexy as the tale of the brave and plucky 13 colonies, casting off their colonial shackles and demanding independence in a hail of musket fire. Instead of Paul Revere and Fort Ticonderoga, we had the British North America Act (passed 142 years ago today, un-coincidentally) and the Statute of Westminster. No wonder Canadian kids have trouble paying attention in history class.

But I wonder, is this so terrible? Americans are quite proud of their founding myths, but is it possible that the American Revolutionary War was unjust? That is to say, is their a valid case to be made for the Loyalist perspective in Colonial New England? This is an important question for Canadians to address, because the primary difference between Canadian and American history is that the Loyalist perspective won out here.

The intrepid scholar with time on their hands should take a look at one of the leading Loyalist tracts of the era, History of the Province of Massachusetts Bay. I can't claim to have given it more than a skim, but if you want to convince yourself that the American Patriot's were a bunch of crooks, and docile Canadians were the true heroes, Hutchinson is your man.

We can actually do even better than Hutchinson and his fellow 18th-century Loyalists, because we have two centuries of hindsight to sharpen our opinions on. In 1775 North America, you could either be a Loyalist or a Patriot. Whose case is strengthened by the events of the 19th and 20th centuries?

I think any modern-day Loyalists could make a strong case that a loyal America would have jettisoned slavery a generation earlier, and without the need for a civil war that killed over 1,000,000 Americans. Whatever the alleged tyrannies of the British colonial authority (and if you believe Hutchinson, they were negligible) I doubt it was worth 30 years of Slavery and 7-figures worth of casualties.

So let's hear it for Canada's polite, orderly, and wholly legal Declaration (more like a request) of Independence. Of course, by "Independence" I mean gradually declining degrees of dependence, vestigial elements of which still exist today. But I'll take the Queen on my $20 bill over a civil war any day.

Happy birthday Canada. To all her citizens: Spend a moment today reflecting on our peaceful, prosperous, and exceedingly polite nation. Raise a glass in honor of our founder, John A. MacDonald. Better yet, make him proud and raise a few glasses. It's your duty as a Patriot.


Sunday, June 28, 2009

Peak Column #5: Progressivism through the ages

Welcome to week 5 of Rules for Radicals. If you’re just now tuning in, I would suggest you first acquaint yourself with previous installments, starting here. Regular clientele, welcome back for another exciting round of anti-Progressive demagoguery. Today we’ll be looking at Progressivism through the ages. As we’ll see, she was quite attractive in her early years – but the toll of age is steep.

A century ago, the world was full of people who believed in free markets, individual liberty and personal responsibility. We would call them “Libertarians” if they were re-animated today, Jurassic Park-style. We would also keep them in tropical preserves surrounded by electric fences, so out of fashion and practice are their ideals in the 21st century.

Oddly enough, these ancient people called themselves “Liberals.” This raises a few questions, since the 21st century definition of a Liberal is pretty much the polar opposite of what 19th century Liberals such as Adam Smith, David Ricardo and John Stuart Mill meant when they used the label on themselves. Back in their day, Liberals were defined by their support of laissez-faire economics and limited government. Modern Liberals, in contrast, advocate the opposite set of policies: Central planning; state ownership of the means of production; high taxes and lavish social spending. What’s up with that? Have we found a glitch in the English language?

As neat as that would be, no we have not. It may seem unlikely, but the word “Liberal” has been true to itself all this time. There is a clear and direct line of descent between 19th century Liberals like Adam Smith, and 21st century Liberals like, say, Hilary Clinton. This is hard to swallow, since you couldn’t get a 19th-century Liberal to spend 5 minutes discussing policy with Ms. Clinton without them coming to blows, but the common lineage is there, if you know where to look.

Here at Rules for Radicals, we’ve previously defined modern Liberalism (under its synonym, Progressivism) as a preference for centralized government authority over individual liberty. Astute readers may have noticed that this definition is full of holes. In several areas – military power and policing, in particular – Progressives favor a decrease in the power held by centralized governments. Statism is apparently a symptom of Progressivism, and a selective one at that, rather than its defining feature. Clearly we need a new definition of Liberalism, Progressivism, and the Left.

Fortunately, I have just such a definition. I find it simplifies the world, answers questions, and generally matches up quite nicely with reality. Your mileage may vary, of course, but here it is: Liberalism is the political ideology concerned with redistributing power away from those who currently possess it.

Consider the problem of conflicting definitions of the word “Liberal” in the 19th and 21st centuries. 150 years ago the chief proponents of mercantilist (i.e., un-libertarian) economic policies were business and land owners who benefited from tariffs, protectionism and political favoritism. Liberals of the era advocated for free-market reforms at least partially on the grounds that such policies would dilute the power of the wealthy and benefit the working classes. (Google “Corn Laws” for a good example.) Other historical Liberal causes – the abolition of slavery, civil rights, first-wave feminism, replacing monarchal governments with democracies – all can be understood as Liberal attempts to change an existing distribution of power.

I am not a Liberal, according to the word’s modern definition, but I have to admit, their track record is good. Had I been born 50 to 300 years earlier, I would be the era-appropriate equivalent of a Prius-driving, SFPIRG-attending, New York Times-reading, capital-P Progressive. But in the world today, when I look for undeserved power, unearned privilege and unjust authority, I don’t see it in the Corporations, IMF, or whatever other enemy-of-the-week Progressives are decrying with chanting and sign-waving. I see it in the modern Progressive movement.

Certainly, Progressivism has achieved great things in the past. But the men and women who today seek to nationalize our economy, ban dissent through Human Rights Commissions and strangle our public schools with corrupt unions that prevent the firing of incompetent teachers – these are not the same Progressives who created the free, open, and prosperous civilization that we live in, and they don’t deserve the political power they’ve inherited.


Monday, June 22, 2009

Peak Column #4: An Unanesthesized Dissection of Progressivism: Part II

Previously on R4R, we began a savage and merciless attack on the political ideology known as “Progressivism.” She was a cagey opponent however, so the smackdown has spilled over into this week’s column. Hopefully, loyal readers of Rules for Radicals are as patient as they are intelligent and open-minded, and can forgive the two-week delay.

The quality of open-mindedness will be particularly important to my Progressive readers this week, since we will be pulling no punches, barring no holds, and landing every cheap shot we can get away with in our cagematch against their flawed and dangerous ideology. It won’t be pretty, my dear Progressive friends, but I promise you: it’s necessary. As for my Conservative readers, prepare for a treat. Grab some popcorn, set the TiVo, and turn your phone off – in a few minutes, Progressivism will be nothing more than a tie-dyed stain on the heel of your host’s boot.

Let’s begin. Recall, in our earlier attack on the Right, we pointed out that Conservatism, by definition, opposes change. But, we said, change is often necessary and desirable. Therefore, Conservatives are idiots. This cuts both ways, however. Change is often good, but it is certainly not always good. Since Progressivism (by its literal definition) always favors change, Progressives must also be idiots.

Of course, I’m just fishing for hate mail right now. Neither Conservatives nor Progressives are, to a man, idiots. But my point, which I’m sure you’ll grant, is that an ideology that is reliably phobic of change is as philosophically bankrupt as an ideology that always and everywhere fetishizes it. Unless you believe that human societies are constantly changing for the better, literal Progressivism is logically untenable.

This is an excellent argument against my own straw-man definition of the Left. Perhaps I’ve convinced you that “Progressivism ” is a slightly inaccurate name for your beliefs, but I’m sure the beliefs themselves remain firmly entrenched; if you supported a comprehensive welfare state coming into this column, nothing I’ve written here should change your mind. But now that we’ve found a fundamental flaw with the ideological core of Progressivism, it’s worth asking some questions.

Such as: If Progressivism isn’t simply an unflinching love of change, what is it exactly? If we look at the policies proposed and implemented by people who call themselves Progressives, what is the common denominator? Consider a list of ideas any sane and reasonable person would have no trouble identifying as progressive: Publicly provided schools and health care; generous welfare programs; state ownership of major industries; increased regulation of business; and the liberal use of fiscal policy during recessions.

Note that each involves a transfer of power from individuals to a centralized governing authority. Is this a coincidence? Did your host cherry-pick to suit his demagogic purposes? Perhaps. But try this thought experiment: put together a list of Progressive policies that do not involve the expansion and centralization of government power. Once you have tried and failed, the conclusion is inescapable: The ideology of Progressivism advocates a gradual and wide-reaching extension of the powers of central governments.

To me, this discovery is reason enough to condemn Progressivism – I see it as self-evident that ever-expanding state authority in every aspect of people’s lives is abhorrent. It strikes me as painfully obvious that, historically, small governments emphasizing the rule of law and free markets have been orders of magnitude more successful at improving the human condition than governments that did not – there is a reason guards on the Berlin wall had their guns pointed inward at their own citizenry, preventing them from escaping. China’s 10% annual growth is not unrelated to her recent pro-market reforms. If your opinion on this matter doesn’t match my own, please spend some quality Wikipedia time with Dubai, Singapore, Hong Kong, South Korea, Chile and Ireland - see if you can manage to come out the other end with your pro-government sympathies intact.

Realistically though, if you don’t share my preference for small government over large, than there is nothing I can say to change your mind in an 800-word column. I can recommend some authors – Milton Friedman to get your toes wet, then some Hayek once you’re warmed up. An occasional episode of South Park doesn’t hurt. But ultimately, the realization that 60’s-style Leftism is untenable is one that recovering Progressives must come to themselves.

Hopefully the conversion process is complete before our next column, though. Next week, we’ll be focusing on a new question: Since the Libertarian ideals of capitalism and free markets have been responsible for what have unarguably been the most prosperous two centuries of human history – why are those ideals being categorically discarded by Western governments over the past century?


Wednesday, June 17, 2009

The Economics of Friendship

It's blog post titles like this that make people not want to be friends with economists.

(I kid, of course. Everyone wants to be friends with an economist. At least they do today, now that their portfolios have taken a 25% haircut in the past three quarters and their old financial advisor has fled the city to work on an oil rig in Fort McMurray. Now everyone wants some pro bono investment advice from their friendly neighborhood economist. But I digress.)

Today's post will focus on a rigorous, quasi-serious analysis of the economics of friendship.

First, read the inspiration behind this post. Bryan Caplan is one of my favourite economists living today. He is smart, honest, perceptive, and full of integrity. He also strikes me as a fundamentally decent and nice person. Hopefully, in light of all this (very sincere) praise, he will forgive me for pointing out that in his younger years, he was a bit of a nerd. As such, his definition of a successful social strategy sets the bar pretty low.

As I pointed out in the comments to that post, I disagree with his recommendations. To explain why, I'll need to break down a working model of friendship.

Friendships exist because life is full of potential positive-sum interactions between groups of people. Most of these look a lot like unconventional forms of insurance.

- Your friend moves, you help him
- His car breaks down, you drive him around until it's fixed
- He loses his job, you pick up bar tabs until he's back on his feet
- He's single, you introduce him to your girlfriend's hot friends


As I said: Insurance. Except better, because the cost of helping is much less than the benefit received. What does it matter to you if you give up a Saturday to move furniture? You didn't have much to do anyway. But you saved your friend $500 of movers fees. A group of people who are all willing to do altruistic things for one another will always be better off than lone wolves. The closer the friendship, the higher the ratio of (cost to you)/(benefit to them) you are willing to tolerate before the favour becomes "unreasonable." Assuming the number is always less than one, it's pretty easy to see that closer friendships are welfare-enhancing.

So there you have it. The conclusions derived in today's economic analysis: Cherish your friends, offer your help unhesitatingly, and expect them to do the same for you.

The Dismal Science, indeed.


Sunday, June 14, 2009

Textbook Economics

This post is not about Economics textbooks. I've dealt with enough of those in my life that I feel no need to revisit the topic. Instead, I'd like to engage some criticisms Seth Godin has made of the current crop of marketing textbooks. I share his concerns, and I'll add that the textbook situation is only slightly better in other business sub-fields. Luckily, the problem is easy to fix.

But first, let's get the negativity out of the way: The manner in which business departments select, assign and use textbooks is awful. As Seth points out, they are overpriced, impractical, boring, and forgettable. I definitely extracted quite a bit of value from my biz-school undergrad, but at a guess, roughly 80% of my current understanding of marketing has come from writer's like Godin, Cialdini, Tim Ferriss, Ben Casnocha and Tucker Max. Considering I've spent about 10x as many hours with textbooks than I have with all of the above combined, this is a major failure by my undergraduate program to deliver its core product.

The problem with the textbook industry is one of incentives. Professors write them to supplement their income. As writers of both textbooks and syllabi, they are in a conflict of interest - royalties can be increased by releasing unnecessarily frequent new editions, avoiding teaching methods that do not require a text, and so on. The fraction of professors teaching courses using their own textbooks is not large, but there are not many business gurus teaching and writing textbooks at top-tier schools in the world today. A lot of them know each other, and if one can do a favour for the other - well hey, they are business professors after all.

Another problem is the increasingly common practice of textbooks that include supplementary teaching material, such as lecture slides, online quizzes, etc. that make the Professor's job easier. Sometimes this can be perfectly reasonable. Other times - like the 4th year Marketing and OB courses in which the midterm and final exam consisted entirely of pre-written multiple choice questions, all 100% gradeable by Scantron machines - not so much.

Finally there is just the overall low quality of the actual content of the textbooks. One that Godin looked at (Printed in 2009) didn't have an entry in the index for either of Google or Twitter. Yeesh.

So what we have now is suboptimal. How do we fix it?

My proposed solution has two parts:

1) An Open-Source Glossary

For each field and sub field, and sub-sub-field of business (or anything, really) create an open-source Wiki that can be edited by any peer-approved professor in the field. Wiki-Glossary will function as a collection of impartial definitions of terms, theories, people and ideas in the realm of marketing. Basically, it will be Wikipedia, with editing privileges limited to non-anonymous experts in the field. Truthfully, I think Wikipedia already fills this need. But many people are still not 100% comfortable trusting anyone without official credentials, so an elitist Wiki such as this will be an easier sell.

2) Crowd-sourcing Case studies

The best way to learn business is by reading and analyzing case studies. This is recognized by the top-tier management schools in the world, and it suggests an important role for textbooks to fill: a convenient filter and aggregator of case studies.

The best business courses that I took had "textbooks" that followed exactly this approach. You could certainly do a lot worse, as a professor, than to assign your students a set of case studies that they can purchase bound for $30 and go through each in turn. But you could also do better.

Imagine a database of every case study ever used in marketing and strategic management classes, updated and maintained by business school professors. Each professor can rate the case studies according to his or her tastes. Students as well.

Separately, lesson plans for each case study can be submitted by professors, which would also be rated up or down according to the tastes of their peers (or students). These lesson plans would be submitted anonymously to prevent groupthink and deference to established titans. No professor would be obligated to construct a syllabus consisting of only the "best" lesson plans for the "best" case studies, but it would be immediately easy to separate the obviously at-least-decent from the crap.

So there you have it. Professors would save time, students would get a better education, and I would receive enough blog traffic that I could retire on the proceeds of my "Check your credit rating" pop-up ads. Win-Win-Win.