Sometimes the good die old

Working the Graveyard Shift as I do, I thought I should mention for the record the passing of two of the all-time great authors. The first is Bernard Lewis, and this is from Roger Franklin at Quadrant Online:

Vale Bernard Lewis

bernard lewis

To reach the age of 101 is by any reckoning a pretty fair innings, but mere longevity was the least of Bernard Lewis’ achievements. The author of some 30 books and hundreds of articles passed away on Saturday (May 19) at an assisted-living home in New Jersey, where he spent his final years. As the Jerusalem Post puts it

Lewis was a leading scholar on Oriental and Middle Eastern studies. His study of antisemitism, Semites and Anti-Semites was a cry against Soviet and Arab attempts to delegitimize Israel … he argued Arab rage against Israel was disproportionate to other tragedies or injustices in the Muslim world.

Quadrant‘s Daryl McCann addressed Lewis’ work and his critics on the Left, not least the late and unlamented Edward Said, in our October, 2012, edition. His essay, Bernard Lewis and the Dangerous Creed of Freedom, can be read via this link.

The other is Tom Wolfe who passed away last week at 88. I had been scouting for someone who sees him as I do, but having begun with The Electric Kool-Aid Acid Test in 1968 – and you cannot imagine what a blast it was at the time – and then eventually ended up with his The Kingdom of Speech, his last book, for which I did a rave review* also at Quadrant [November 2016 but, alas, not online], it has been not easy to find someone who covers the terrain. It was not his fiction I truly enjoyed, but “the new journalism”, if you will pardon the expression, since we are talking about something that began fifty years ago. So let me snatch these bits from John Derbyshire’s 2004 review of I am Charlotte Simmons, which fiction though it is, where the right sort of sentiments are struck.

• The political incorrectness. Well, not exactly that. Tom Wolfe takes no point of view, has no bill of goods to sell. He just calmly, coolly records the way things are, the way people look and talk, the commonplace, mostly harmless, prejudices and solidarities that have survived 30 years of relentless media and educational indoctrination against them.

• The class angle. Modern U.S. society is addled with class snobbery. Poor and rural Americans are coarse-looking, ill-dressed, speak in dialect, and have lousy dietary habits. Rich suburban and high-urban Americans would much rather have nothing to do with them. When confrontations do occur, the rustics are insecure but defensive, the rich patronizing but impatient, with a frisson of guilt. Again, these are things known to everyone, but we are not supposed to notice them. Wolfe does notice them, and draws them to a “t.”

• The cold eye. I don’t know how the future will rank Tom Wolfe as a novelist, but he is a simply terrific journalist. Oh, sure, he exaggerates some when writing fiction to get the effects he wants; but you could put a Wolfe novel under a steel-mill press and not squeeze a single drop of sentimentality out of it. Wolfe’s authorial tone to the reader is: You don’t have to like this, and I’m not too crazy about it myself, but this is the way it is, and we both know it. Our society is awash with the grossest kind of sentimentality — in movies and TV, saturating the sappy nostrums of the Sunday magazine-supplements and corporate mission statements, pouring in from self-help cranks, victim-industry moaners and weepers, love-the-world useful-idiot politicians and Oprah-fied pain-feelers. Wolfe is the antidote to all this sugary glop. There isn’t enough of him to have much effect, unfortunately; but when you’re drowning in treacle, the merest squirt of lemon juice is refreshing. Wolfe worships the God Kipling worshipped, The God of Things As They Are.

• Typographical vitality. A copy editor once sent back a manuscript of mine with all the italics, semicolons, dashes, parentheses, and exclamation marks stripped out. She was, I learned later, a disciple of some dogmatic imbecile — was it Strunk? — who had pronounced that the barest text was the best text. Well, the hell with her, and him. Our Tom shares my opinion that every key on the keyboard is there to be used, including the shift key. In I Am Charlotte Simmons he has even ventured a typographic innovation (I think — it is new to me, at any rate): using strings of colons for ellipses in interrupted or disconnected thought. Like this:

::::::trying not to look at him::::::the condom, the ball-peen hammer::::::the undertow again::::::the Doubts::::::more time::::::can’t think spinning like this!::::::Look, Hoyt::::::just wait a second, okay?::::::

• Neat plotting. Wolfe isn’t one of the great plotters — not a Wodehouse, not even a Trollope — but he understands the principles of moral balance and equity that make a novel satisfying to the reader. Virtue need not triumph, but ought at least survive; evil need not be routed, but ought at least be chastened; and there must be a sufficient number of secondary characters we are sufficiently interested in that the author’s giving us some hint of their subsequent fate at the book’s end adds minor satisfactions to the major ones.

* The last para of that review:

In the meantime, I hope there are many who find their way to The Kingdom of Speech which is an amazing read on so many levels, not least of which being how revealing it is about how ideas are formed and sustained across time.

The Plot to Kill Stalin from 1953

After watching the whole 90 minutes, I am beginning to understand modern American politics a bit better.

Watching the ads is almost as interesting as the story. Then they advertised the improving availability of energy. Now we are actually trying to make our energy supplies as unreliable as possible.

Socialist parties are filled with totalitarians

We’ve been to see The Death of Stalin and I could not recommend it more. A tragic story told in a lighthearted way. I am so old I remembered every one of the main protagonists, knew who they were and each had a very high recognition factor. And by some coincidence, this is just now the first item at Instapundit:

TODAY IS THE 124th ANNIVERSARY OF NIKITA KHRUSHCHEV’S BIRTH: Khrushchev was all too willing to assist with Stalin’s infamous purges and was Stalin’s enforcer in Ukraine.   But at least later in life, he came to understand that Stalin was a dangerous maniac. After Stalin’s death, he emerged (hands bloodied) as the Soviet Union’s leader from 1953 to 1964 and pursued a policy of De-Stalinization.

Khrushchev’s grip on power was never as tight as Stalin’s.  On the night of his ouster (engineered by Leonid Brezhnev), he is reported to have told a friend:

“I’m old and tired. Let them cope by themselves. I’ve done the main thing. Could anyone have dreamed of telling Stalin that he didn’t suit us anymore and suggesting he retire? Not even a wet spot would have remained where we had been standing. Now everything is different. The fear is gone, and we can talk as equals. That’s my contribution. I won’t put up a fight.”

Khrushchev is famous for having told a room full of Western ambassadors, “WE WILL BURY YOU!” Instead, he is buried at Novodevichy Cemetery. Brezhnev refused him a state funeral or Kremlin burial. To Brezhnev, he was just an annoying squish.  Take a look at his monument at the cemetery. It’s in black and white–a fitting metaphor for the man.

Unless you know – really know – that socialist parties are filled with totalitarians trying to find their way to the levers of power, you will not know enough to keep an eye out for your political safety. Even then you can never be sure, but that is where you yourself must start.

The ongoing scandal of modern economic theory

Here’s the sub-head: Economists show increased research efforts are yielding decreasing returns. And if they mean negative returns, then I am with them all the way. Economic theory is at a lower level of competence today than in the 1850s. It is such a scandal, but once a subject matter falls into a hole the way economic theory has done, it is near on impossible for it to find its way out. The conclusions drawn from modern theory are literally classical fallacies. An economist raised any time between say 1776 and the 1930s would look at a modern text and disagree with almost every word. There would be almost no overlap between anything found in a modern text and a text written before 1930.

I wrote a paper, published by the skin of its teeth in 2015, on John Stuart Mill’s Fourth Proposition on Capital: “demand for commodities is not demand for labour”. You cannot increase the level of employment by increasing aggregate demand. Everyone once knew this. No one now does. Not one economist in a thousand can any longer understand what was plain as day for a century and a half. We keep growing because we keep inventing things. But the generation that is following behind us will find their living standards falling into a great pit, and the last place anyone will be able to find out why will be from economists.

I have mentioned this already, but perhaps another look might be of interest: What is the difference between Keynesian and classical economics? which is a reply I put up on Quora. Go have a look.

Then there’s this I did not so long ago on marginal analysis which, as presented in a modern text, is as near to empty of content as a theoretical demonstration can be. This is how I look at it which is also classical to its bootstraps.

The diagram represents my own version of the marginal revenue and marginal cost diagram. The traditional version has a series of lines many of which can never be realistically drawn (such as the demand curve), with the ultimate point to show the price-quantity configuration for the sale of a single product. The conclusion is that if a firm wishes to maximise profitability on the sale of some good or service, it will price the product just exactly where a lower or higher price would lead to a lower return over cost. Fatuous and useless, with many bits of the real world left out, such as the actual ability to work out the effect on revenue of changing a price. Modern micro truly is as useless as modern macro.

The above diagram – discussed fully in my Free Market Economics – brings in a number of crucial factors:

  • it is about whether some decision should be made rather than deciding on what price to charge
  • it is about trying to make a decision in the face of a future that can never be foretold but is filled with endless uncertainties
  • it recognises that there are costs that almost invariably must be borne before there is a return [Area A]
  • costs continue even after revenues commence and only eventually, in a profitable venture, will revenues exceed costs [when B = A]
  • the point of origin is the present moment when some decision must be made – all of the lines drawn are the expectations of the decision maker
  • reality may turn out to be much different, with losses instead of a net positive return
  • only when total revenue and total costs are equal – that is, when the expected addition to revenues is equal to the expected addition to costs (when MR=MC at the moment the decision is made) does the firm go ahead with the venture

This is the way a business, or anyone else for that matter, makes a decision: in the present with only one’s own conjectures as a guide.

I will lastly mention a very nice note I received the other day:

Steve

Just finished reading your book Free Market Economics and wanted to congratulate you.

I have read plenty of economic texts, but yours is the best by far and helped crystalize a number of things that have been swirling around in my mind.

Great work.

It was truly appreciated. You can get a copy for yourself right here. I didn’t make any of it up myself. It is just a distillation of classical theory, the economics of John Stuart Mill and his contemporaries. It’s never been improved on and I doubt it ever will be. But so what. It is a massive improvement on that junk science we go around teaching today.

Love and gratitude in the wild

From 15 Amazing Finalists From Smithsonian’s 15th Annual Photo Contest. This is the text that goes with the photo:

Affection
© Thomas Chadwick. All rights reserved.

This is my favorite black skimmer photo that I have taken in all the years following a little-known colony. Every year I select a nest when the parent is on eggs, then follow that same nest until they fledge. I choose one nest because colonies are chaotic; you will miss some shots by pointing the lens at hundreds of birds. One morning I got into position and lay there for an hour until sunrise when a parent flew in directly to feed the baby. The baby was inches away from me, so I couldn’t get the feeding photo. However, after the baby gobbled down the fish, I captured it running up to the parent and displaying the behavior pictured.

Category: Natural World

My Quadrant review of Jordan Peterson’s 12 Rules for Life

Here are the final lines of my review of Jordan Peterson’s 12 Rules for Life.

I can do no more than encourage you to read the book. There is nothing else like it and I cannot praise it enough.

This then is how the review begins.

STEVE KATES

The Future is a Judgmental Father

12 Rules for Life: An Antidote to Chaos
by Jordan B. Peterson
Allen Lane, 2018, 448 pages, $35
______________________________

jordan petersonJordan Peterson (left) may well be the deepest, clearest voice of conservative thought in the world today. In the space of less than a year he has risen from being a relatively obscure professor of psychology at the University of Toronto to becoming perhaps the most articulate defender of the values of the West to have arisen in the last fifty years. I can think of no one in recent times who has been able to reach such depths of understanding, but with such an extraordinary ability to make plain his meaning to such large numbers of people. You should, of course, read his 12 Rules for Life: An Antidote to Chaos, but you should also watch as many of his online presentations as you can if you are interested in understanding, and preserving, the values of our Western civilisation.

This review appears in the latest Quadrant.
Click here to subscribe

 
The rest of the review you can read here, but not only do I think you should read the book, you should also subscribe to the magazine as well.

Beyond Economics 101

This post on Economics 101 reminds me yet again how useless modern economic theory is at working through almost any economic issue at all. It’s about the theory of comparative advantage, I think, and the role of free trade in creating a high standard of living. But let me go first to this question at Quora: What are 25 economics books that you would recommend (preferably classical and neoclassical)? My answer:

If you are seriously interested in understanding economics you need to understand classical economic theory, the economics of the period from the publication of Adam Smith’s Wealth of Nations in 1776 until the marginal revolution began about a hundred years later in the 1870s. And if you are interested in understanding classical economic theory, you should read the third edition of my own Free Market Economics: an Introduction for the General Reader.

Modern economic theory has fallen into very hard times since its classical period, and is now incapable of explaining almost anything that matters. My FME third edition is entirely supply-side, explaining how classical economists understood the operation of an economy which is how an economy actually does work.

From the marginal revolution with its focus on marginal utility, through to the Keynesian Revolution of the 1930s with its introduction of aggregate demand, economic theory has looked at economies from the demand side. And while it has a superficial appeal, no economy is driven by demand. All economies are driven from its production side. People buy more where more is produced. If you want to understand what allows people to demand, you first have to understand what makes them capable of producing.

I will just add that if you try to read classical theory without some preparation for the changes in the terminology between economics today and economics then, you will miss the point. This is a paper you can find at SSRN which will help you get past what is a quite formidable barrier.

Classical Economics Explained: Understanding Economic Theory Before Keynes

Steven Kates

Abstract

Since the publication of The General Theory, pre-Keynesian economics has been labelled “classical,” but what that classical economics actually consisted of is now virtually an unknown. There is, instead, a straw-man caricature most economists absorb through a form of academic osmosis but which is never specifically taught, not even as part of a course in the history of economics. The paper outlines the crucial features that differentiate modern macroeconomics from classical theory, with the emphasis on what an economist would have understood as The General Theory was being published. Based on the differences outlined, a model of classical economic theory is presented which explains how pre-Keynesian economists understood the operation of the economy, the causes of recession and why a public-spending stimulus was universally rejected by mainstream economists before 1936. The classical model presented is an amalgam of the final edition of John Stuart Mill’s 1848 Principles of Political Economy published in his lifetime and Henry Clay’s influential 1916 Economics: an Introduction for the General Reader, a text which was itself built from the economics of Mill.

Here’s the link to the paper.

Classical Economics Explained: Understanding Economic Theory Before Keynes

As for comparative advantage and free trade, if you’d like a very good explanation of its classical meaning, you won’t do better than my Free Market Economics, an analysis I have not changed a word of since the first edition. It is naturally taken from the economics of John Stuart Mill who had himself taken it from David Ricardo, who wrote it up in 1817. It’s a great first approximation for all those economic types who are actually addicted to mercantilism, whereby economies are driven from the demand side and economies grow by increasing their level of exports. I know, who could believe such a thing, but let us assume just for now that there really are morons who harbour such views. How did Mill and Ricardo explain what was wrong with such notions? By pointing out that the best way to improve one’s standard of living is to produce what one does best and exchange one’s own forms of supply for the goods and services produced by others. You know, goods buy goods. You know, Say’s Law. You know? Perhaps not.

But you know what was also current then? The gold standard. There are many ways this process of comparative advantage breaks down, but with the abandonment of the gold standard and fixed exchange rates, there are all kinds of ways to cheat in foreign trade relations that are not discussed as part of the basic theory. This is the definition of “currency manipulation” found at Google:

It occurs when a government or central bank buys or sells foreign currency in exchange for their own domestic currency, generally with the intention of influencing the exchange rate and trade policy outcomes.

“Influencing” as in making one’s own situation better at the expense of someone else. It can be done, and is done. And there’s more. For most economies, a devaluation occurs naturally with deficits but not with the $US which is the world’s reserve currency. And let me also add this, that there is no trade war imaginable unless others decide to retaliate. And why would they if the only damage of increased tariffs in the US is to its own economy? Let the US suffer for its actions, right? Why poke yourself in the eye if they want to poke themselves in the eye?

There is so much more that can be said but will leave it to some other time.

Only one book written in the twenty-first century will explain the classical economics of the nineteenth

At Quora, this question: What are 25 economics books that you would recommend (preferably classical and neoclassical)? My answer:

If you are seriously interested in understanding economics you need to understand classical economic theory, the economics of the period from the publication of Adam Smith’s Wealth of Nations in 1776 until the marginal revolution began about a hundred years later in the 1870s. And if you are interested in understanding classical economic theory, you should read the third edition of my own Free Market Economics: an Introduction for the General Reader.

Modern economic theory has fallen into very hard times since its classical period, and is now incapable of explaining almost anything that matters. My FME third edition is entirely supply-side, explaining how classical economists understood the operation of an economy which is how an economy actually does work.

From the marginal revolution with its focus on marginal utility, through to the Keynesian Revolution of the 1930s with its introduction of aggregate demand, economic theory has looked at economies from the demand side. And while it has a superficial appeal, no economy is driven by demand. All economies are driven from its production side. People buy more where more is produced. If you want to understand what allows people to demand, you first have to understand what makes them capable of producing.

I will just add that if you try to read classical theory without some preparation for the changes in the terminology between economics today and economics then, you will miss the point. This is a paper you can find at SSRN which will help you get past what is a quite formidable barrier.

Classical Economics Explained: Understanding Economic Theory Before Keynes

Steven Kates

Abstract

Since the publication of The General Theory, pre-Keynesian economics has been labelled “classical,” but what that classical economics actually consisted of is now virtually an unknown. There is, instead, a straw-man caricature most economists absorb through a form of academic osmosis but which is never specifically taught, not even as part of a course in the history of economics. The paper outlines the crucial features that differentiate modern macroeconomics from classical theory, with the emphasis on what an economist would have understood as The General Theory was being published. Based on the differences outlined, a model of classical economic theory is presented which explains how pre-Keynesian economists understood the operation of the economy, the causes of recession and why a public-spending stimulus was universally rejected by mainstream economists before 1936. The classical model presented is an amalgam of the final edition of John Stuart Mill’s 1848 Principles of Political Economy published in his lifetime and Henry Clay’s influential 1916 Economics: an Introduction for the General Reader, a text which was itself built from the economics of Mill.

Here’s the link to the paper.

Classical Economics Explained: Understanding Economic Theory Before Keynes

Jordan Peterson and his misunderstood lobster tale

Thank you for your patience regarding the possibility of extra events during Dr Peterson’s Australian tour. I have been advised by Dr Peterson’s office today, that Dr Peterson will not be giving any additional talks on this tour due to his work committments.

Jordan Peterson is coming to Australia and his lectures are sold out. He was asked if he would put on additional lectures but the note above has been sent out along with the picture below it.

If you understand the point of the lobster story in his 12 Rules for Life, it is that both humans and lobsters seek dominance due to both of our psychologies being pushed along by serotonin. You are always going to have alpha-male lobsters just as you do with human societies. So my guess is that the people who are organising his tour haven’t actually read his book.