Check Your Premises

I studied mathematics in school. And I loved the way Euclidean geometry started with some postulates and reasoned from them into theorems. Hopefully, you had this in your sophomore year of High School. The most controversial of these was his fifth postulate:

If a line segment intersects two straight lines forming two interior angles on the same side that sum to less than two right angles, then the two lines, if extended indefinitely, meet on that side on which the angles sum to less than two right angles.

Some thought this postulate should be derivable from the postulates. Over the course of centuries mathematicians came to understand that this postulate was either true or false based on the curvature of space. Positively curved space is what you find on a globe. Two lines of longitude may form two right angles with the equator, but they end up meeting at the north and south poles. (This is termed Reimannian geometry.) Another way this axiom is false is when you have negatively curved space. This is the space you see in pictures of black holes with those hyperbolic shapes. Einstein played with a lot of hyperbolic spaces when doing General Relativity. (This is termed Lobachevskian geometry.)

If you're near a black hole, on a globe, or on an ideal plane, Lobachevskian, Reimannian, and Euclidean models will match your observed reality, respectively.

We see this pattern of axiomatic systems repeated in other contexts. If you're better at Math than me, you can talk about Zorn's lemma and the Axiom of Choice: they work the same way. And I'm of the opinion that the existence and non-existence of God is one of those things that you can use to build two independent, logically consistent explanations for reality. Logic and proof about God's existence is not going to do anything but make you tired, you can only match up how well the system of thinking (axiomatic system) your come up with matches observed reality.

If you're still with me, consider another branch of mathematics you did not learn in grade school: Game Theory. Suppose we play checkers, chess, or poker. You can either win, lose, or tie. The winnings of any player come about pursuant to the losses from other players. These are the games we're most familiar with and they demonstrate the zero-sum games.

But there are other games in life that don't look like games. Life Insurance is a game where the insurance company bets that you won't die, and you bet that you will die. (I rather like the idea of corporate fat cats betting that bad things won't happen.) Casinos also make wagers, but they rig the odds so that your expected payout is less than the amount you wager. A few bettors may win big, but for the most part, only the house gets rich. The profits the casinos take from winning more often that the lose make this a negative-sum game.

Suppose Vikings invade a region to loot its goods. If the victims peacefully hand over the lolly and the Vikings leave with it, it's a zero-sum game. But if they rape, pillage, and burn, those incidental damages make this another negative-sum game.

How about free exchange between willing participants? You've heard business consultants tell folks to think win-win. Economists who know more than I claim that free trade creates more wealth than it consumes. 

Let's say I have a handful of radio parts, and you have a handful of grain. If you need some diodes, and I need food, we can exchange and we will both be better off. 

Our natural desire to get more value in exchanges like these motivate us to grind the wheat into flour, mix it with yeast, and bake it into bread. Or fashion those radio parts into a desirable gadget--a radio, or something more valuable. We exchange better things and we benefit more from the exchange.

Technology enables us to create value without taking from others. We start with some plastic, use electricity to heat it and extrude it into a particular pattern, then a few cents' worth of plastic become a part we can sell for dollars. Maybe a farmer uses that plastic part in his irrigation system to use less water and thereby sell more food more cheaply. 

I think that technological innovation makes free trade a positive-sum game. As it becomes cheaper and more ubiquitous, the things only GM could do when I was a college student are within the grasp of makerspace tinkers today. And will be within the grasp of third-world bohemian have-nots within a decade.

I was once scolded by a famous economist when I asked whether productivity gains could solve inflation. When I asked him, one could buy a 19" analog color TV for about a thousand dollars and watch three channels. He was right about inflation. Gold was selling for a couple hundred dollars an ounce and it is well over a thousand dollars an ounce today. BUT a couple hundred dollars will buy a much nicer television that receives much more interesting programming.

I said before that the destination of economic inequality is less important than the way in which we get there. Economic Inequality is a terrible thing if life is more like a negative sum, or zero sum game: Pirates raiding villages, or Politicians (both Republicans and Democrats) enriching cronies on the backs of everyone else, or Casinos making a few rich to distract while impoverishing the rest.

Our world is a mix of negative-sum, zero-sum, and positive-sum components. When economic inequality comes about from the first two, I am justly annoyed. When it comes about from positive-sum exchanges, I remember the last thing Moses brought down from the mountain.

Thou Shalt Not Covet.

Is Economic Inequality a Bad Thing?

It depends on how the scales of economic justice become imbalanced. There's more than one way for economic inequality to occur. And some of those ways are a lot more toxic than others. I suspect the good or the evil is not in the destination, but in the road we take to get there.

The Savior said the poor will be with us always. Simple mathematics bears him out. You are rich if you have one dollar more than I do and you are poor if you have less.

When in school I always liked to grade on a curve. I found it easier to learn a little bit more than average than to master 100% of the material.

Grading on an economic curve sorts us into "the rich" and "the poor."

This isn't Republican, Democrat, or Libertarian. It isn't Tea Party or Occupy Wall Street. It's just math. It's comparing two numbers--my wealth, your wealth--, so don't tell me you can't understand it. (I think you can understand multiplication and division, too. Can you double a number or divide it half? I promise not to do anything harder than that.)

I saw a TED talk recently by a woman named Chrystia Freeland wherein she described increased economic inequality and "The rise of the new global super-rich." She says the things you'd expect about the rich getting richer.

BUT the poor aren't getting poorer as The Economist says in Not Always With Us. Their headline appears to contradict the Savior.

Or maybe it doesn't.

I think the Savior, and Ms. Freeland are grading poverty on a curve, whereas The Economist and you'll see Bono are working with an absolute scale.

I asked my wife how much it costs to eat for a day. We guessed about $5, then rounded it up to $2,000 a year. At some level, without enough money, you starve to death. And that's what Bono has in mind with his TED talk The Good News On Poverty.

For sake of argument, let's assume $2,000 is what you need to not-starve.

Let's suppose you're John Doe with only $2,000 to your name. You may not vacation on the Riviera, but you'll feed yourself. However, Forbes magazine says Bill Gates has $67B. The difference is not chicken feed: $66,999,997,000.

Let's suppose the ghost of Milton Friedman waves a magic wand and make everyone richer. And I don't mean inflation, I mean real wealth. The magic wand takes all debts and makes them half as big, and all savings twice as big and all the prices are the same as before.

Consider John Doe: he now has $4,000 and he can move up from Ramen Noodles to Macaroni & Cheese with a MacDonalds hamburg on Sunday. He's not yet puttin' on the Ritz, but he's got more money for a better life.

The bad news is that Bill Gates is now worth $134B. And the difference between John and Bill has more than doubled to $133,999,997,000. If you're grading on a curve, that's very bad news, but John's happy, and Bill is happy, too.

It gives both Bono and Chrystia Freeland topics for happy and unhappy TED talks, respectively.

Now, let's consider an alternate parallel universe. Like the one where Spock has a beard. And the ghost of Karl Marx shows up with his own magic wand to make everyone poorer. Everyone's wealth is cut in half and prices don't go down to compensate. Now, let's look at Bill Gates and John Doe.

Bill "only" has $34.5B and has to adjust to the straightened means the Koch brothers now enjoy.

But John starves to death. He can go to his grave enjoying the thought that he's only $34,499,998,000 poorer than the Microsoft billionaire. Bono won't be happy because a lot more people like him will starve to death, but Chrystia Freeland can cite the dramatic decline of economic inequality.

This is just math. It just requires a feel for the way in which numbers move when they are multiplied and what kinds of stats do or don't make sense.

Frankly, I'd rather live in a world where nobody starves to death.

But what if that is a world where poor get ahead, but the rich get much farther ahead?

Too Stupid To Live

Sometimes I am so enraged by a story it sticks with me for more than 24hrs after I leave it in disgust. This is a good case of a story that might have one significance to its author and to imperialist audiences, but it has a drastically different significance from a different perspective. And from that different perspective, the "heroes" are evil and the "villains" are good.

This is one of those times. On Instant Netflix I found an old movie, Thunder In The East, with Alan Ladd, Deborah Kerr, and Charles Boyer set in India during the Partition. After several decades of parasitism, the British Raj cleared out of India. In so doing, they created a power vacuum wherein 1.5 million people died.

This movie concerns a remote province where a contest for control is taking place between the local maharaja and a bandit army who the movie claims is Really Bad--along the lines of Gabbar Singh. Alan Ladd flies his DC-3 into this place with a cargo of machine guns, rifles, and ammunition. The sorts of tools a local government might want when fighting off rebels trying to take over.

Alan Ladd gets an appointment with the maharaja's main guy, Charles Boyer, who keeps a picture of Gandhi on his desk. Boyer tells Ladd that war is not the answer and that violence and guns don't settle anything. (It sounds sooo fitting in a French accent.) So, no-thanks, he's not buying.

After Ladd leaves Boyer's office, Boyer calls the airport and tells the airport people to steal the guns and ammo. He says "confiscate" & "impound" but when you take something without paying, it's stealing, even if you're from the government.

Meanwhile Ladd meets the other white folk who are in a snit because they took down the "whites-only" sign at the British Social Club.

After it becomes clear that things aren't safe--particularly the roads, Ladd offers to fly the white people back to Mumbai at market prices. The Brits call him a thief and he raises the price--good for him. He only has 20 seats on the airplane after all. (Market prices are the most efficient way to allocate scarce resources.) Meanwhile, Boyer seizes the DC-3, but Ladd steals it back, and Boyer's flunky disables his airplane. Instead of saving 20 people, everyone's stranded.

The maharaja has decided to spend the summer in France and he has escaped in his own airplane.

Maybe those rebels are freedom-fighters who have the support of the people and they have more legitimacy to rule than the craven maharaja and his thieving crew.

At this point I stopped watching, because I knew how things would play out. Alan Ladd would lead the defense of the white people using his own guns & ammo, Charles Boyer would see violence save his worthless hide, and Debora Kerr would civilize Alan Ladd. It sickened me because every single character in this movie was too stupid to live. And that evil "heroes" would triumph over the "bandit-army" freedom-fighters.

Alan Ladd was stupid to leave his cargo unsecured. The British were too stupid to stay behind after the British Army left and stupid to insult the only guy who could save them. Charles Boyer was stupid to order the airplane disabled.

The only people I sympathized with were the Indian citizens.

When the US won our independence from the Brits, the victorious Continental Army helped George Washington maintain order. India and Pakistan had a power vacuum created by the British withdrawal.

Alan Ladd and Debora Kerr could fly to America and the Brits sail to the UK, but what of the Indians who remained?