Retirement Savings

I often hear people say that Social Security should be eliminated, that we'd do better with our own 401K's.

There are a lot of problems with that argument.

The argument is that people could invest their money better. Maybe. But they can also invest their money worse. So it's a very uneven policy. And that is ultimately cruel. It makes gamblers of us all, and experience shows that gamblers are often a lot more confident than is warranted.

Moral Failing

The sociopaths among us often say, “Too bad. Individuals should take responsibility for their lack of saving. It's not my fault that some people don't plan.” Is that so? I doubt it.

You see, those same people are telling us that we should eliminate the minimum wage, asking “if the market doesn't want to pay someone enough to even live, why should it have to?” So exactly where is the savings supposed to come from?

On the one side, people work hard for hardly any money. On the other side, they're told their failure to save is a moral failing. But where is the discussion of moral failing in having more money than God and yet still being unwilling to help raise people out of poverty? That seems the biggest moral failing.

Dynastic Wealth & Connection

Moreover, a lot of what makes the difference in who succeeds or fails is one's parents. Dynastic fortunes. Better schools. Better connections. Race. Sometimes even just better health or better clothing. The narrative is spun that the rich worked hard for their money, but, in my personal experience, poor people work much harder for the scraps they are thrown than rich people ever do, and the notion of “meritocracy” is nonsense because the people who get ahead are just those who get to start ahead of the others.

Social Security as Moral Agent

While on the topic of morality, let's also look at the structure of Social Security itself. People like to compare it to a 401K, but it's not like that. It's not a bank account. It's a very different beast.

As an example, if you become suddenly unable to work, it kicks in right away, even if you haven't paid a lot up front. That's very different than a bank account. Also, if you live for only a short while or for a long time, it continues to pay you through your life.

There might be issues with getting necessary cost of living adjustments, but the only reason we don't do those more often is that the aforementioned rich sociopaths insist it's more important to give tax breaks to the wealthy.

They'll tell you that Social Security is intended only to supplement your retirement, not to be the full amount, and yet they'll happily attach penalties for those using Social Security if they try to draw money out of it while also getting other income. That's not really how supplements work, and it's a disincentive to additional work.

A Social Contract

But my point is that the contract is not for a specific quantity of money. It is a social contract. You pay into it while you're able and you are paid when you're not able. We could do better in the “helping people to get paid” part, but the point is for it to keep a great many people from falling into poverty—to add dignity.

It's worth noting that Social Security did not arise in a vacuum. While people could invest their money, a lot of people didn't, or else were losers in that gambling. Before Social Security, in the 1930s, the elderly poverty rate in the depression was something like 70%. So there is an objective way to understand what this did for the public. Some have called it the most successful anti-poverty program in the history of the US.

Implementation Details

If we were sincerely worried that investing in the market were a better bet, we could arrange for the Social Security trust fund to do that. That's just an implementation detail and has nothing to do with the overall social promise. If DOGE wanted to do something helpful, instead of aggressively dismantling all of the US government's ability to provide value to the public, they could analyze whether there are better ways to manage the funds.

But, ultimately, government is not a business and Social Security is not a profit & loss center, even if it's popular for some who don't like it to portray it that way. It mostly pays for itself, but from a moral point of view, its real purpose is to say that we as a society need to have a commitment to our sick and elderly, to assure they are taken care of, before we declare a profit.

If we as a nation are able to give tax breaks to rich citizens only by cutting social programs, then the rich are preying on the poor. The health and welfare of all citizens is our first priority as a nation. We should not be preferencing the already-preferenced before we have attended to that.

The Present Day

This topic is very apropos in the current market. We may be about to enter another recession, perhaps a depression. 401K's are down. So the claim that we could do better investing on our own is uncertain, but is again certainly going to test a lot of ordinary citizens, postponing their ability to retire.

And I emphasize that the choice of when to retire is not just a whim. Even ignoring age discrimination, age wears on a person, and some people do physical jobs—actual hard work, as opposed to the metaphorically hard work done by rich executives—that leaves them depleted. So, delayed retirement is not just an inconvenience, it is in some cases cruel torture, and in some cases impossible.

But even as we are potentially entering a depression, the billionaires are salivating. They are looking forward to “buying low”. They're treating this roller coaster as a buying opportunity! They plan to get rich on this depression. Even as others suffer and probably many die. As homes and farms are foreclosed upon. They are gleeful.

Betting on Regular Citizens

This is the time when Social Security should be doubling down and assuring people it will increase benefits to cover rising costs—although it wouldn't be terrible if we also just impeached the President who's artificially causing those rising costs by imposing tariffs that really no sane business people think are a good idea. Social Security is a social contract with the population about what our priority is, even in tough times. Especially then. So, if we need more money, we should be bumping the tax on those gleeful about what a great buying opportunity this is. That would properly reflect our societal morality.

They, the rich, would probably whine that such a tax singles them out. They'd speak of their pain, and claim that others were just jealous of their wealth and cleverness. No one should stand for such rhetoric. The rich folks making noise did not get their power by dealing honorably with us citizens. This is not jealousy speaking. It is a desire for justice. Be glad I'm not suggesting—as some have and still do—that we just “eat the rich” and be done with it. Proper taxation of accumulated wealth (not just income) works for me.

No one needs that much money anyway. It's clear from their observed behavior that one can only buy so many gold toilet seats before one starts to wonder what the point of excess riches is, and really it seems the only thing that one can find to spend such wealth on is buying governments. And then, apparently, running them badly and cruelly. The Peter Principle in its most high stakes form. No, I'm not going to feel sorry about suggesting taxation.

 

---

Author's Notes:

If you got value from this post, please “Share” it.

An early version of this post lost some text from the original that was restored a few hours after posting.

This post originated as a rant by me on Mastodon. Small amounts of content have been aded, it has been lightly copy-edited, and its typography has been adjusted to fit this forum. Also, some of the tariffs were paused today as this revised version of the essay goes online, along with claims that this was all strategic. But that only underscores my point about gambling. There is no certainty in the 401K approach like there would be in a societal commitment to care for its weaker members.

The graphic was produced using abacus.ai using RouteLLM and FLUX 1.1 [pro] Ultra, then post-processing in Gimp.

The Two Economies

Some are in a rush to
 “reopen the economy.”

The economy.
As if there were only one.

But there are two economies:

• the Essential Economy, and
• the Luxury Economy.

Yes, the Luxury Economy is paused.
And yes, it is losing money.

But the Essential Economy is still operating.

And what a lucky, lovely, life-sustaining thing that is.

Ordinary people—those who work in fields to plant or harvest crops, who drive trucks, who stock shelves or operate cash registers in grocery stores, who keep our lights on, who patrol our streets, who fight fires, who drive ambulances, who operate food kitchens, who are doctors and nurses in hospitals and clinics and nursing homes—ordinary people are, each and every one, nothing short of heroes.

Heroism pervades the essential economy, where amazing souls risk and regularly lose their lives just to keep our essential services working.

We haven’t closed that economy.
So there is no need to speak of reopening it.

Of course, there are people suffering in the Luxury Economy. A great many. Not everyone who works for the luxury economy lives in luxury, so please don’t misunderstand.

But if the Essential Economy creates enough food, housing, health care, etc. to sustain us, then the rest of it is just a dance we do because we are not making our nation more fed, more housed, etc.

If we’re not part of the Essential Economy, we’re the entertainment, amusing them and perhaps ourselves, while we wait for a handout. They’re creating all of the essential value. At best, we’re left to creating “optional additional value,” but by definition nothing we can’t do without, or we’d still be doing it.

So we’re operating at a surplus, not a deficit, and the reason we know that is that the essentials are being met even without our whole population working. We’re just bad at dividing up our collective surplus.

The things society needs to do it is still doing, to the extent we ever were. We’ve always been far from perfect at that, but that’s topic for another day. Right now my point is that the Essential Economy isn’t shut down, only the Luxury Economy is.

And so, you see, to speak of “need” to reopen “The” Economy is a slap in the face to the contributions and, frankly, to the sacrifices made by these heroes.

Let’s be blunt: The whining is about when we luxuriate anew, when profit-taking can resume, when we can start polluting again, when businesses can get back to exploiting within impunity.

These things we so urgently need to get back to are not needs. These are just things that some among us are used to doing because money makes them feel important.

But these activities are not what is important—if they are even good for us at all.

We in the Luxury Economy are likewise not what is important.

We matter as individuals. I don’t meant to suggest we’re expendable. But what qualifies as hardship and what is mere inconvenience is something we owe scrutiny. There are some in the Luxury Economy sitting comfortably on accumulated wealth as others are panicked, barely getting by, worried about keeping a roof over their head or where their next meal will come from. But that isn’t a collective wealth problem, that’s a problem with how we distribute surplus.

Also, many of the people sustaining themselves on amassed wealth think of themselves as virtuous, that they did the right things, that they are deserving of their comfort now. But we see now more clearly that if they earned all that wealth in the Luxury Economy, they’ve provided none of the value that is now sustaining them. They’re just lucky they are now sustained. They are asking for handouts right now, just like the rest of us. They differ only in being more smug, in their sense of entitlement to those handouts they need as much as anyone.

We often run on autopilot, indulging the presumption that things are as they are for good reason. But based on an unscientific survey of my friends, most of whom are on the prowl for yet another Netflix series to binge, my guess is that we have time on our hands, time that could be spent contemplating whether we should ge back to familiar routines or get busy finding new ones.

And so, just to sum up…

The fact that many of us have jobs that do not contribute to essentials is proof of our collective wealth. When we need food we go to work—but not to make food, because there is enough, even if badly distributed and poorly shared. No, when we need food, we go to work just to make money, a dance we do to feel worthy of surplus food and essentials made by a few.

We who do not create the true value, the essentials that are largely and miraculously and heroically still available even now should be thankful supply lines are moving and should be asking how we can help that, how we can assure they are properly paid for arduous, dangerous, and relentless work, how we can make sure their families are taken care of while they do this, and how we can make sure their health care is assured, not whining about when we can resume pointlessness again.

---

If you got value from this post, please “Share” it.

If you haven’t read my essay Corny Economics, you might want to head there next. This post was intended as a sequel, but I tried to write this on the assumption that you might read them in either order. Otherwise, I might have here used the parlance of Corny Economics, replacing “Essential Economy” with “Corn Economy” and “Luxury Economy” with “Harmonica Economy”.

The 1920 photo by Lewis Hine titled Power house mechanic working on steam pump was obtained from Wikimedia, which identifies it as being in the public domain.

The “drop caps” effect I used is a modified version of the helpful advice from Chris Coyier’s article Drop Caps at css-tricks.com, which I found in a Google search. He suggests it’ll work across multiple browsers, and it looked to me like it should. I used it in a span tag, since my use was a one-off and I didn’t want to fuss with style sheets. And I liked the color enough that it influenced some of the other design, and that in turn led me to the idea of working the entire piece in vary sizes and colors, so I evolved the article from there. I had been looking for a visual way to make some of the points clearer and this was one of several things that catalyzed the final result.

I find I often write text to fit visually, I don’t just mark things up after-the-fact. I change the lengths of sentences so that in plausible line-breaking on various browser settings, I expect it to look good. In cases where I am looking for a particular break, I experiment with reshaping windows and watch for widowing and often just replace spaces with non-breaking spaces ( ) so that if a line break occurs, it has substance and semantic units fall, perhaps more raggedly, in meaningful units.

Corny Economics

Sometimes we get so mired in the thick of things that we lose track of where we began and what we were about. I think economics is a lot like that. We’re all affected by it. We all have opinions. And yet we’re told it’s a vast topic about which we can have no opinion. It’s too big and complicated for us to understand if we haven’t studied it. I’m not sure I agree.

I want to begin by speaking in very blurry terms to reset the conversation. I think many of us have a problem of not being able to see the forest for the trees. So I want to zoom out to where the detailed view no longer holds us captive. Let’s talk in very broad brush strokes for now.

OK, so having zoomed our view of the Earth out to a resolution befitting an astronaut, let’s click the “Economic View” icon in the upper right corner, and see what the world looks like. I’ll interpret for you, since you may not be familiar with this view and I don’t have a handy screen image.

From this view, I see only two things: People and corn. That’s all there is in the world.

“Corn?” I hear someone in the audience asking “Why corn?”

I’ve chosen corn to metaphorically represent what we need to survive.

“What about beef? We’re not all vegetarians,” some of you are asking.

For the purposes of our conversation today, beef is a kind of corn. We’re too high up to care about the kind of detail that would distinguish beef from corn.

“Health care? Housing?”

It’s all just corn. From here, corn is enough. From here, corn represents everything we need to live.

“We must be awfully high up to think that. But it’s OK. At this altitude, I think the thinning corn is making me light-headed and it’s starting to make sense.”

Great. Now back to economics.

The first and most obvious observation is that there is either enough corn in the world, or there is not. If there is not, we have a serious problem. That would mean we are beyond the carrying capacity of the Earth.

“So that’s your model of the world? That all people do is make corn?”

Thanks for reminding me. Of course that’s silly. They also make harmonicas. Did I forget to mention that? People, corn, and harmonicas.

“I don’t know anyone that owns a harmonica.”

Well, I do. But it doesn’t matter. Harmonicas, iPods—same thing. From our vantage here, anything we make that we don’t need looks to me like a harmonica.

“Why harmonicas?”

They’re a way to pass the time between growing and eating corn. I divide life into essentials and leisure. After all, it takes only a fraction of the population to grow the corn we need. The rest of us just make—or use—harmonicas.

“Sounds like some of us are more necessary than others.”

Now you’re seeing my point. At the highest level, the problems are simpler. We don’t need everyone to grow corn because a few people can make enough for everyone. We’re an affluent species. We could just grow the corn and distribute it out and there’d be plenty for everyone.

“That would mean some wouldn’t have to work.”

Right. And that would drive some others crazy from an equity standpoint.

“So how do we solve that?”

We ask them to make harmonicas.

“But that won’t feed anyone.”

No one needed to be fed. There was already enough. Making harmonicas doesn’t make us more able to feed people, it just soothes our primitive emotions, making it seem that people aren’t getting something for nothing. If they make harmonicas, we tell them they’re entitled to food. No harmonica, no food.

“That seems a bit harsh. And does the world really need that many harmonicas?”

Well, that’s what got me thinking. I have a friend who knows someone named Joe who’s living on welfare. She thinks Joe should get a job. I started to wonder if that was really true.

I imagined Joe getting a job making drink umbrellas.

“Drink umbrellas?”

They’re a kind of harmonica. But don’t interrupt.

Mind you, as with all harmonicas, the world doesn’t really need drink umbrellas. They offer very little value, they mostly just go straight into the trash, and they add to landfill. Plus Joe will burn corn getting to and from work so that he can make this product that adds to the landfill. And someone will have to drive the product to market so that someone else can drive to the store and buy it. All of these activities threaten the corn supply. On net, I’d say, they make us poorer.

Or it might be no one even wants drink umbrellas. We might need additional people to work at a marketing firm in order to figure out how to get people to buy them anyway. Those people would have to expend fuel driving to and from work. They need heat or air conditioning while at the office. They need an internet connection. Expense is layered upon expense just to get society to create and tolerate things we don’t need. And why? Because without all this expense, we wouldn’t feel good giving Joe some corn for free.

I’m not sure any of that makes good sense. None of it will make us more able to feed Joe. It will only make us more willing to feed him.

We don’t end up caring whether the job Joe takes burns more resources to earn the corn than he would burn if we just gave him the corn. In fact, we don’t account carefully for the resources used by our society at all. We take it on faith that resources are being used well because we imagine that when everyone makes purchases that each individually make sense, the entire system will somehow, magically also make sense. But what if that’s wrong? What if there is no such emergent effect? What if being down and dirty in the details obscures our chance to create any global coherence?

We created money so we could keep track of traded value, but somehow things have gone awry. I’m not advocating an end of money, but I am advocating a hard look at the assumptions we make about its effect and about the goodness of the things it buys. I’d like an end to the blind trust in money, as it were.

There may indeed be things we could be doing in our society to make the world better, but merely looking at where there’s money to be made might not answer that. We have erected a consumer-driven society in which we incentivize the making of things. But I suspect we will not have a sustainable society until we start to incentivize the “not making” of things we don’t need.

Maybe there are other ways people can provide value, maybe not. But if there can be such gigantic questions of what’s the right thing to do in the world, can we at least agree to feed everyone in the meantime while we sort it out? And by feed, I really mean feed, clothe, house, and take care of them. I think we’d be able to do it. I think so because I think we could do it if people would just make more harmonicas.

If we’re prepared to do something important if only our people do some utterly irrelevant act, I think we’re prepared to do it regardless. Why not dispense with all the corny excuses and finally just do it.

---

This article has a sequel/companion, published in 2020:
The Two Economies.

---

Author's Note: Originally published May 27, 2012 at Open Salon, where I wrote under my own name, Kent Pitman.

The graphic was added in June, 2025. The initial design was created as two separate images with the help of abacus.ai using Claud Opus 4 and Seedream. Neither was exactly right, so I had to manually fuse them and do other post-processing manually using Gimp.

Tags (from Open Salon): place to live, housing, house, home, healthcare, health care, health, drink umbrellas, drink umbrella, blind trust, trust, obfuscation, excuses, excuse, extra, surplus, leisure, luxuries, luxury, non-essentials, essentials, essential, wants, needs, housing, shelter, clothing, clothes, clothe, food, feed, harmonicas, corny economics, economics, corn, corny, politics

Losing the War in a Quiet Room

The Occupy Wall Street (OWS) movement has seemed to tap into a deep-rooted sense discontent in the American populace over how capitalism has gone wrong. Criticism has not come just from the Left, but also from the right, as recently discussed on the excellent new MSNBC show Up with Chris Hayes:

[VIDEO TEMPORARILY MISSING FOR TECHNICAL REASONS.
SEND KENT A REMINDER TO FIX THIS.]

Visit msnbc.com for breaking news, world news, and news about the economy

The discussion begins with a quote from Newt Gingrich asking “Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of other people and walk off with the money, or is that somehow a little bit of a flawed system?” To which Chris Hayes cheerfully responds, “Well, yes, Newt it is.” The discussion that follows is typical of the many thoughtful exchanges that make this show such an absolute “must watch.”

Early in the discussion, Prof. Anne-Marie Slaughter of Princeton University, asks “What’s the opposite of ‘predatory capitalism’?” and chuckles about whether that means a kind of “kinder, gentler capitalism.” Alexis McGill Johnson of the American Values Institute frames the issue as a sort of nostalgia for something lost, and David Roberts of Grist opines that “democratic nostalgia is for a set of laws and regulations that used to restrain capitalism; the republican nostalgia seems to be for nicer corporate titans, to an era of public-spirited rich people.” Vincent Warren of the Center for Constitutional Rights, questions whether the system has adequate benefit for workers, noting that the only thing workers get out of capitalism is jobs, but they don’t get economic benefits or any control of the direction companies take.

It all begs the question: What changed?

My immediate thought on that question came from having listened to the book The Betrayal of American Prosperity by Clyde Prestowitz. In the book, Prestowitz offers the following account that struck me as simply extraordinary:

Excerpt from pages 198-199 of
The Betrayal of American Prosperity by Clyde Prestowitz

THE HARVARD BUSINESS SCHOOL CREED

At the founding of Harvard Business School in 1908, Dean Edwin Gay said the purpose of the school was to teach business leaders how to “make a decent profit by doing decent business.” That was McCabe’s creed and what thousands of future business leaders learned at Harvard for many years. But in 1970, the University of Chicago’s Milton Friedman sounded a different note. Said he, “Few trends could so much undermine our free society as the acceptance by corporate executives of social responsibility other than to make as much money for shareholders as possible.” This tune was quickly picked up and elaborated by Harvard’s professors and especially by Michael Jensen, who became the dominant American voice on corporate architecture and the proper role of a board of directors and a CEO.

In a hugely influential 1976 paper and subsequently, Jensen propagated Friedman’s doctrine of shareholder sovereignty and of increased returns to shareholders as the sole purpose of the CEO. His argument was grounded in the view that the shareholder is the corporation’s final risk bearer and therefore also its final claimant. He added the notion that, as agents of shareholders, the corporation’s managers do not necessarily share the interests of the shareholders. Indeed, the managers and the shareholders may be at war because the way for the CEO to maximize his/her private gain may be at odds with maximizing shareholder gains. For instance, a CEO may like corporate jets or want to be part of the society scene, but the costs of such indulgence may be a burden to shareholders. Thus, the central problem is how to align the interests of managers and shareholders and to establish a monitoring mechanism that easily indicates whether the managers are acting properly on behalf of shareholders.

Jensen’s solution was to grant gobs of stock options to CEOs to evaluate their job performance by focusing on the progression of quarterly earnings. This is a single, readily available, objective number upon which a CEO can concentrate all her attention and which the shareholder can readily use to determine whether a CEO is working for him. Jensen emphatically rejected stakeholder theories on the grounds that giving a CEO multiple objectives would be confusing, distracting, and make it impossible in the end to measure performance.

In effect, Prestowitz is noting that this is a recurrence of the old joke

“If you dropped your keys over there,
   why are you looking here?”

“Because the light is better here.”

If I’m hearing him right, Prestowitz is making the bold claim that the reason we stopped caring about people other than shareholders was it was just too messy to do the accounting of worrying about other stakeholders, such as employees, customers, and community. It was administratively simpler and cleaner to only worry about stockholders, and so one day business just quietly decided to do that instead.

Or that was the stated rationale, anyway. Let’s not overlook the outside chance that those pushing for this change fancied themselves the potential later recipients of “gobs of stock options” as CEO of some company operating under the newly proposed rules. No point in mentioning that rationale out loud during the debate when they could stick to the altruistic-sounding story of how this focus on clarity of measurement would just be good for business. “Let's give them gobs of stock” sounds so much more business-like and less self-indulgent than “Let's give ourselves gobs of stock.”

Imagine if we took that “clarity” approach toward our justice system, saying it was too hard to measure justice so why not just measure, let’s say, cost? That wouldn’t fix old-fashioned Justice but it would create a form of NeoJustice that was so much easier to measure, allowing us to be sure we were being successful at it. But to what end?

Really that’s what happened, too. Not with criminal justice but with economic justice. We just let it go, without even knowing it. Without any real notice to or approval by the large community of American citizens affected by the change, American Business just quite literally stopped caring. It’s pretty obvious, at least to me, that this timeline Prestowitz mentions dovetails precisely with the downfall of American society so evident all around us.

A war was fought in a “quiet room” somewhere, without anyone firing a shot, and we’re now living in the aftermath of our unwitting capitulation. No wonder we’re confused about how we got here.

---

Possible Follow-up Actions

Putting things to right could begin by undoing the Supreme Court ruling in Citizens United, and eliminating from the law any notion of corporate personhood. Senator Bernie Sanders is pushing for a Constitutional amendment doing so. You can sign his petition supporting this amendment.

Another concrete action is to learn about stakeholder theory and start to ask questions about why it’s there and whether we could change it. It was changed before, and it seems to me it could change again. I don’t know the process by which that would happen. But I think it needs to.

Further Reading

The Betrayal of American Prosperity by Clyde Prestowitz covers additional issues, particularly those of US trade policy, in addition to the matters I’ve discussed here. In some ways, this was just a peripheral aspect of his main point. But it’s an excellent book either way and I very much recommend it. I listened to it as an audiobook from audible.com.

A basic overview of some of these issues can be obtained from Wikipedia articles titled “Stakeholder (corporate)” and “stakeholder theory.”

I also highly recommend Naomi Klein’s excellent book The Shock Doctrine: The Rise of Disaster Capitalism, in which Milton Friedman and the Chicago School (a.k.a. the “Chicago Boys”) play a critical role. I listened to it as an audiobook from audible.com.

And, finally, my other articles Fiduciary Duty vs. The Three Laws of Robotics and Sociopaths by Proxy may also shed some additional light in why this all matters.

---

Author's Note: Originally published January 22, 2012 at Open Salon, where I wrote under my own name, Kent Pitman.

Tags (from Open Salon): ows, wall street, occupy wall street, occupy, legal sociopath, naomi klein, shock doctrine, clyde prestowitz, betrayal of american prosperity, constitutional amendment, amendment, constitution, citizens united, sanders, michael jensen, harvard business school creed, creed, harvard business school, harvard, nostalgia, romney, newt gingrich, gingrich, newt, chris l hayes, christopher l hayes, christopher hayes, chris hayes, grist, david roberts, princeton, anne-marie slaughter, american values institute, alexis mcgill johnson, center for constitutional rights, vincent warren, up with chris hayes, chicago boys, chicago school, milton friedman, friedman, shareholder model, stakeholder model, shareholder theory, stakeholder theory, shareholder, stakeholder, quiet war, quiet room, economic justice, justice, war, fiduciary responsibility, fiduciary duty, corporate, corporation, finance, economics, business, politics, lose, losing, lost, society, war in a quiet room

My Slice of the Pie (Again)

I thought I had written this already, but apparently it was stem cell research I'd written about back in March, not abortion. Since the observation I have to make applies identically to both issues, I just copied the old article and changed the nouns in two places.

Ever pooled money with a group of people for pizza? Five bucks a head and someone calls out a big order. It can be a little tricky since not everyone likes the same toppings, but with a little effort, it can be made to work. A veggie pizza here, a pepperoni there, maybe the chicken pizza has olives only on one half of it. Pretty soon everyone who's pitched in their five dollars is satisfied.

Of course, the guy who wants the veggie might be irritated that someone in the group was eating meat. But what's he going to do? Force his ethics on others? No matter how morally sure he is of his beliefs, it wouldn't fly for him to try to control what others are doing. His $5 hardly buys him the right to tell everyone else what they can or can't eat. Chipping in buys him the right to ask that a little bit of the pizza is something he'd enjoy, but it doesn't give him the right to veto what others might like.

So now let's talk about another kind of pie: The national budget.

Why do people say silly things like “I don't want my tax dollars going toward abortion”? Why aren't they laughed out of town for such a ridiculous statement? It's fine for them to say something like “I want a few of my tax dollars to go to funding something I do like,” but unless they're paying a lot more than I'm sure they are in taxes, they just haven't bought the right to control what others are chipping in for.

---

Author's Note: If you got value from this post, please “Share” it.

Originally published September 30, 2009 at Open Salon, where I wrote under my own name, Kent Pitman.

Tags (from Open Salon): taking responsibility, overpopulation, pregnancy, unwanted pregnancy, pro-choice, pro-life, anti-choice, anti-abortion, pro-abortion, short-sighted, selfish, separately coded, separate account, federal funds, state funds, tax deduction, tax credit, my tax dollars, single payer, health care, public option, abortion rights, abortion, sharing, pizza, economics, funding, pluralism, politics, family planning, planned parenthood

Hollow Support

When I was in seventh grade, there was a playground near my house that served the kids of about ten families in our very tiny community. It had the usual kinds of things—a swing set, a sandbox, and perhaps a few other less memorable items. However, it wasn't the fixtures that call this scene to mind just now, but the use we put them to and a concept I learned about which I get occasional senses of deja vu.

For example, someone brought some good sized tires, perhaps from trucks, and we made up a game where some people would swing on the swings and others would roll the tires at the people on the swings and the game was to dodge the tires rolling at you or to hit them just right to knock them back in the other direction. It was a very dynamic game, not for the faint of heart, perhaps reminiscent of Rollerball or American Gladiators, though a lot more low tech and presumably less safe.

A short distance from the battleground area that the swingset came to be was the sandbox, where we played more cerebral games. As I recall, we had some little vehicles, probably Tonka® or some such thing, and we'd dig tunnels under the sand for them to drive through. The game in this case was to make bigger and bigger tunnels, almost like a game of Jenga®, but with sand. We'd reach into the tunnels and find a handful of sand to remove and cross our fingers that by removing that particular bit, the entire structure wouldn't fall in.

The game got harder as more was removed because there was less holding things up—and also because it was just hard to reach all the places you needed to without pushing on them. It became more and more intricate to manipulate, and through the eyes of a kid, quite beautiful.

We used terminology that denied what we knew to be the obvious truth, that we were weakening the ceiling above the area we were making. The goal, of course, was to make a giant underground cavern for the trucks to move around in, unimpeded by vertical columns. No one really thought that by removing all the columns, it was becoming stronger. We just loved when it stayed up at all as we used ever bolder techniques that by all rights should have knocked it down. And we tempted fate further by emboldening our terminology to match.

We called it “hollow support,” both as a noun and a verb. I guess it was a kind of cartoon physics thing where if we didn't admit it was getting weaker, maybe it wouldn't. “We need some more hollow support over here,” someone would call out, and another would rush to yank out another bit of supporting structure, all in the name of coming as close as possible to what we all knew was unachievable. All in the name of perfecting the hollowness of the support.

It was beautiful up to the end. And after that? Well, it collapsed, of course. It was just for fun—it wasn't going to affect our lives, after all. If there were little guys driving those Tonka trucks, we were pretty callous about their fate, but that's the nature of the game. We'd just pat each other on the back and talk about what great hollow supporting we'd done and how we should do it again sometime. Then we went home and didn't have to care. The next day would just be another day, like any other. At least for us.

As I look at the US economy these days, that concept pops back to mind a lot. The people running the show, those who devised the complex pyramids of economic sophistry that became our banking system were playing with just so much sand in a sandbox. They were seeking to build something fun, not something secure, and pressuring it ever closer to collapse. Then off to dinner like any other day, not having to care. Over a nice wine, they'll talk about the great things they achieved, and then moan about the great loss they, too, suffered in the Big Collapse. Perhaps they'll think of a few supportive words to offer the little people who were crushed in that collapse.

Hollow support—it was so obviously ridiculous even as we were doing it as children, who could have ever guessed I'd find use for such a concept again as a grown-up?

---

Author's Notes: Originally published March 27, 2009 at Open Salon, where I wrote under my own name, Kent Pitman. I have reproduced the article here, but to read the original discussion, you'll need to click through to the snapshot created by the Wayback Machine.

Tags (from Open Salon): little people, jargon, terminology, fragility, fragile, lack of support, support, digging, building, collapse, fantasies, illusions, delusions, daydreams, dreams, goals, hollow support, metaphor, lessons learned, childhood memories, swing set, sandbox, economy, economics, politics

Although the original article was written and published in 2009, the dump truck image was added much later (in December, 2024) using abacus.ai with Claude Sonnet 3.5 and FLUX 1.1 [pro] Ultra using the prompt “Create an image of a toy dump truck, with its cargo space filled with sand, driving in a space that is like a cavern, carved from limestone, with only 3 or 4 pillars of that limestone remaining to hold up the ceiling”. I manually used using GIMP to put the resulting image into grayscale.

Rethinking Mega-Corporations

When the Microsoft antitrust case came along, the issue seemed to be that Microsoft controlled too much of a market that needed to be substantially more free. But the problem was that people didn't like the government deciding how to partition up the space. The problem is that government intervention in how to divide up market spaces is too subjective, leaving open options for corruption, bad understanding of a market, etc. The sense was in some that this is something best decided by vendors, and yet the problem was that if you left it to Microsoft, it didn't seem to be deciding the issue well.

“EU Competition Commissioner Mario Monti could never build Microsoft Windows or successfully sell it, yet he and his antitrust regulators get to decide if a great American corporation may or may not improve its products,” said Nicholas Provenzo, chairman of The Center for the Advancement of Capitalism.

I thought about this a lot at that time and have continued to ponder it since. I always come back to the same conclusion—that there probably needs to be something like a maximum size company or at least an incentive for not creating ever larger companies. I don't quite have the entire idea fully fleshed out in my head, but I'm confident enough that there's a good idea in there that I think it's time to at least throw it out for discussion, even knowing it will be controversial. But the point is to have some objective measure or incentive that leads to the desire of a company to stop growing.

No matter how smart the leader of a company is, we should be encouraging that person to teach others his or her skill, not to acquire ever-more power for himself alone after the company is above a certain size.

As companies grow super-large, the number of them necessarily grows super-small. This implies reduced competition, which eliminates the exact reason we allow markets and competition in the first place. We need to incentivize companies to seek an intermediate size for many reasons; in light of recent events, one way to express this is as a need to avoid the “too big to fail” phenomenon.

It's my understanding that increasingly in recent years antitrust legislation is not pursued in cases where consumers seemed to be seeing lower prices, on the theory that no matter what the structure of the industry, lower prices for consumers is always unconditionally good. That sounds wrong, and the recent fiasco in the marketplace seems an illustration of why that might be.

The problem seems not just to be the inappropriate manipulation of markets, but merely the reliance on a single company at all; because this implies that really only one human mind—or a small number of human minds—is making decisions for too many people at once. In effect, it implements a kind of corporate dictatorship, or at best rule by a very few people.

In the best case, that leads to a single person having the power to make something extraordinary that others might not think to make. But the problem with that is that if any such individual fails, they bring their company and everyone in that company down with them. There is, of course, a risk that these super-leaders are truly unique souls and that no other person could possibly cause what they did to come to pass; but, if so, there will be huge confusion once they're gone. Worse, our structure also allows them to pass on the power they have amassed to someone who did not earn it. The company does not go back to being disorganized after they leave, the power they perhaps rightly assembled is now a simple commodity to be passed along to someone who didn't earn it by being truly unique. And yet there may be many people, not just one, who are at the next tier waiting to shine.

To see the problem, suppose a person could reliably be said to have ten times the combined intelligence and insight of five people who report to him. And so we allow him to be their leader for a time. Now it becomes time to step down. By definition, this same is not true of the five who stand to rise to his position. It may be that they are capable of stepping into the mechanics of the original leader's position, but the original justification of giving them this position based on the extraordinary thing that only they could do is no longer there. And certainly if it's the case that any one of them was close to the insight and intelligence of the person who dominated, the world would be better off with both of those people at the helm of a company rather than with only one.

Of course, you could iterate this truth all the way down and find that there was no justification that was ever a reason to make a company. And that would be wrong, too, but mainly because it isn't really objectively knowable who is the right person to lead. It's a gamble. And so having many companies of intermediate size allows a compromise between gambling on no corporate organization and on total corporate organization.

Perhaps individuals should be limited to having a majority share in only one company, and minority shares in other companies, again encouraging many human minds to have a serious say in the market. Underlying this thought is something I call my “many minds hypothesis,” that the world will work better if there are a lot of smart people competing rather than just a few. In effect, the current practice in the market involves big fish eating little fish until there is really only one fish and no remaining competition.

A company that has no competition is stifling the creative power of the people within it, who are asked to be conformists to a particular way of thinking. I don't think it's healthy for the individuals, for the company that has come to dominate, or for society.

Since establishing a maximum bound on a company size is hard to do, it seems to me that a possible alternative might be to allow tax rates on a company to increase as the company size increases, creating the possibility of companies consolidating to improve efficiency, but only if the efficiencies are really important.

People sometimes claim that we must have market efficiency, but I think the ultimate efficiency will come when we're all replaced by robots. I don't think that's going to do a lot of good for us or for the environment. And at some point, we may even find the robots think humans are superfluous. But, for now, we have a lot of people who need jobs, and it seems to me that a bit of inefficiency in the market, especially in the form of redundancy and competition, would help a lot.

We've been hurt very badly by the present super-banks losing. If they had been kept from ever getting this large, we'd be in much better shape because there would have been more brains involved and more chances that at least some of those banks would have protected themselves.

Author's Note: If you got value from this post, please “Share” it.

Originally published March 15, 2009 at Open Salon, where I wrote under my own name, Kent Pitman.

See also my related post Fiduciary Duty vs. The Three Laws of Robotics.

Tags (from Open Salon): inefficiency, market efficiency, singularity, ai, robots, free market, market, robustness, diversity, many minds, many minds hypothesis, competition, maximum size corporation, maximum size company, megacorporations, politics, economics, business

My Slice of the Pie

Ever pooled money with a group of people for pizza? Five bucks a head and someone calls out a big order. It can be a little tricky since not everyone likes the same toppings, but with a little effort, it can be made to work. A veggie pizza here, a pepperoni there, maybe the chicken pizza has olives only on one half of it. Pretty soon everyone who's pitched in their five dollars is satisfied.

Of course, the guy who wants the veggie might be irritated that someone in the group was eating meat. But what's he going to do? Force his ethics on others? No matter how morally sure he is of his beliefs, it wouldn't fly for him to try to control what others are doing. His $5 hardly buys him the right to tell everyone else what they can or can't eat. Chipping in buys him the right to ask that a little bit of the pizza is something he'd enjoy, but it doesn't give him the right to veto what others might like.

So now let's talk about another kind of pie: The national budget.

Why do people say silly things like “I don't want my tax dollars going toward stem cell research”? Why aren't they laughed out of town for such a ridiculous statement? It's fine for them to say something like “I want a few of my tax dollars to go to funding something I do like,” but unless they're paying a lot more than I'm sure they are in taxes, they just haven't bought the right to control what others are chipping in for.

---

Author's Note: If you got value from this post, please “Share” it.

Originally published March 10, 2009 at Open Salon, where I wrote under my own name, Kent Pitman.

Tags (from Open Salon): politics, pluralism, funding, economics, pizza, sharing, stem cell research