Commentary

The trouble with those anarchists is that they don’t know what they like; they only know what they do not like, which is everything; they are consumed by an impulse to destroy, destroy, destroy all existing social orders; and what will happen if they do succeed in destroying all existing social orders?  they will feel nothing but emptiness.

“[turn-the-other-cheek pacifism] only flourishes among the more prosperous classes, or among workers who have in some way escaped from their own class. The real working class . . . are never really pacifist, because their life teaches them something different. To abjure violence it is necessary to have no experience of it.” ~ George Orwell, 1941.

The interesting points in the book:

• the success of the market economy is because it harnesses individuals’ desire to make themselves better-off for the benefit of the general public.  "Fighting greed" through government legislations do not work.
• one of the major reasons that Soviet Union collapsed is because allocating resources without a pricing system is overwhelmingly difficult in the long-run.  So the old joke goes that communist dictators set market prices by reading Walmart catalogs.  
• New York Times columnist Thomas Friedman called the anti-globalization protesters "a Noah’s ark of flat-earth advocates, protectionist trade unions and yuppies looking for their 1960’s fix".
• sweatshops set up by multi-national corporations in third-world countries benefit everyone, including the sweatshop workers.
• the dismal state of public education in most western countries is likely because the teachers’ wages do not correlate in anyway to their job performance.
• let CEO and executives receive a large share of their compensation in the form of stock options give them incentives to make choices that will benefit not just themselves, but also the company’s share-holders.
• the prisoners’ dilemma demonstrates that individuals making choices rationally in their own self-interest can make everyone worse-off in the end; an example is the Paradox of Thrift.
• sometimes, the best way to protect a scarce resource is to privatize it.
• one of the reasons that people in industrialized nations have less children is because the real cost of raising a child has increased.
• George Stigler won the 1982 Nobel Prize in Economics for his observation and supporting evidence that private firms and professional associations often seek government regulations in order to use it to hamper their competitors.
• American Bar Association should lower its standard of admission because a lot of legal procedures such as basic wills and real estate closings do not require brilliant law scholars, and doing so would lower the cost of legal services.
• foreign aid has a positive effect on growth when good policies are already in place and has little impact on growth when they are not.  Thus aid should be predicated on good policy.
• when the exchange rate is fixed, the government has no control over the money supply and exchange rate.
• the depreciation of dollar can turn an economy into the bargain bin of the world.
• corrupt government can maintain an overvalued currency (currency is worth far more than the government’s official exchange rate) in order to pocket the difference.
• strategies such as "self-sufficiency" cause governments to reject free trade; however, economies open to free trade grow much faster than economies that are closed to free trade.
• development expert Jeffrey Sachs posits that climate can explain much of the world’s income distribution; tropical weather is good for vacation but bad for food production and conducive to to the spread of disease.
• excessive regulation goes hand in glove with corruption; government bureaucrats throw up hurdles so that they can extort bribes from those who seek to get over or around them.
• many economies might be able to collect more revenue (and reduce the size of the underground economy) if they implement taxes that were low, simple, and easy to follow.
• 100 years ago, the world economy was in many ways more global than it is today: you could travel without a passport; gold standard was an international currency.
• environmental quality is a luxury good.
• Gandhi, like Lincoln, was a good leader but bad economist: Gandhi proposed that the Indian flag have a spinning wheel on it to represent economic self-sufficiency.
• trade barriers are like a sort of hidden tax, like applying a 30-cent tax on every gallon of orange juice sold domestically.
• deflation begets a dangerous economic cycle; falling prices and slumping economy can feed on each other, plunging the economy into the abyss, this is called the deflationary spiral.
• sometimes government trigger an inflation deliberately in order to devalue the money it lent out to the public - a sort of hidden, inflation tax.
• any cash held in hand will loose its value over time; and any saving deposits and certificates are vulnerable to the risk that their low interest rates may not keep up with inflation; If income is not indexed for inflation, then its purchasing power will gradually fade away.
• paper currency has no inherent worth, its value depends on its purchasing power, which can change gradually over time, or even stunningly fast.
• any paper currency is valid as long as it has a valid serial number, does not matter if it’s torn, dirty, crumpled, or otherwise.
• most country’s paper currency is not backed by gold standard, thus every paper currency is redeemable for nothing.  And many country has banned private money.
• monetary and fiscal policy affect the economy independently; the Federal Reserve implements monetary policies; the government implements fiscal policies.
• the Federal Reserve has no control over the long-term money supply of the economy; it can control the short-term money supply of the economy by buying and selling bonds to commercial banks on the bond market.
• Any system of voluntary payments falls prey to the free riders problem, which is an argument that certain services such as law enforcement be undertaken by the government.
• Supply-side economics doesn’t work in the United States since its tax rates are already low relative to the rest of the world, however, lower taxes may still lead to long-term economic growth by encouraging more investment.
• Human capital is becoming more and more important in the modern economy, sometimes constitute more than 70% of the wealth of an economy, more important than raw material such as oil and diamonds.
• Wage gaps can give entrepreneurs an incentive to take the risks necessary for leaps in innovation.
• According to survey, majority of people would choose to live in an economy in which the overall standard of living is lower but the gap between the rich and poor is narrow rather than an economy in which the overall standard of living is higher but the gap between rich and poor is wider.
• Financial market products such as mutual funds and index funds lessen the risks of investment by spreading investment over hundreds of different ventures.
• When it comes to interest group politics, it pays to be small; small and determined special interest groups can force politicians to pander to their needs by spreading the cost of this benefit over a very large population.  The benefits of creative destruction are not noticed by the general population, but those whose livelihood or community may be disrupted by such process of creative destruction chain themselves to the politician’s office door seeking protection.

"as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know." - Donald Rumsfeld, February 12, 2002.

left-wingers (such as social democrats) believe morality does not need to be regulated, but economy should be regulated, because a capitalist businessman with no moral is a danger to society.

Right-wingers believe morality should be regulated, but economy doesn’t need to be regulated, because a capitalist businessman with a strong sense of morality will not harm society for his own personal gain, and even if he does get out of line, a population with sense of morality will not support him.

And then there are Libertarians (or classical liberals), who believe neither morality nor economy should be regulated, let God/nature/the invisible hand sort things out.

Free will?  Who need free will?  What most people really want is freedom from having to will.

Historian Francis Fukuyama wrote in his book America at the Crossroads:

The roots of neoconservatism lie in a remarkable group of largely Jewish intellectuals who attended City College of New York (C.C.N.Y.) in the mid- to late 1930’s and early 1940’s, a group that included Irving Kristol, Daniel Bell, Irving Howe, Nathan Glazer and, a bit later, Daniel Patrick Moynihan. The story of this group has been told in a number of places, most notably in a documentary film by Joseph Dorman called "Arguing the World." The most important inheritance from the C.C.N.Y. group was an idealistic belief in social progress and the universality of rights, coupled with intense anti-Communism.

It is not an accident that many in the C.C.N.Y. group started out as Trotskyites. Leon Trotsky was, of course, himself a Communist, but his supporters came to understand better than most people the utter cynicism and brutality of the Stalinist regime. The anti-Communist left, in contrast to the traditional American right, sympathized with the social and economic aims of Communism, but in the course of the 1930’s and 1940’s came to realize that "real existing socialism" had become a monstrosity of unintended consequences that completely undermined the idealistic goals it espoused. While not all of the C.C.N.Y. thinkers became neoconservatives, the danger of good intentions carried to extremes was a theme that would underlie the life work of many members of this group.

If there was a single overarching theme to the domestic social policy critiques issued by those who wrote for the neoconservative journal The Public Interest, founded by Irving Kristol, Nathan Glazer and Daniel Bell in 1965, it was the limits of social engineering. Writers like Glazer, Moynihan and, later, Glenn Loury argued that ambitious efforts to seek social justice often left societies worse off than before because they either required massive state intervention that disrupted pre-existing social relations (for example, forced busing) or else produced unanticipated consequences (like an increase in single-parent families as a result of welfare). A major theme running through James Q. Wilson’s extensive writings on crime was the idea that you could not lower crime rates by trying to solve deep underlying problems like poverty and racism; effective policies needed to focus on shorter-term measures that went after symptoms of social distress (like subway graffiti or panhandling) rather than root causes.

Leon Trotsky (born Lev Bronstein) appeared as a character under the name Emmanuel Goldstein in George Orwell’s novel 1984. 

• Who else should we wish to serve, if not ourselves?
• Whoever battles monsters should take care not to become a monster too, for if you stare long enough into the Abyss, the Abyss stares back into you.
• There is no pre-established harmony between the furtherance of truth and the well-being of mankind.
• There are many things I do not wish to know, wisdom sets a limit on knowledge too.
• The fact that science as we practice it today is possible proves that the elementary instinct which protect life have ceased to function.
• We have arranged for ourselves a world in which we are able to live with postulation of bodies, lines, surfaces, causes, and effects, motion and rest, form and content: without these articles of faith, nobody could manage to live.
• The irrationality of a thing is no argument against its existence, rather a condition for it.
• [too much knowledge causes us to] choke on our own reason.
• Creed of nihilism which I see everywhere is the result of too much learning.
• Any truth which threatens life is no truth at all, it is an error.
• Madness is something rare in individuals; but in groups, parties, ages, it is the rule.
• They honored something in themselves when they honored the saint … self mastery and the will to power.
• With morality, the individual can only ascribe value to himself as a function of the herd.
• Man is the cruelest animal.
• The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself.
• You need chaos in your soul to give birth to a dancing star.
• Man would sooner have the void for his purpose than be void of purpose.
• For men are not equal: thus speaks justice.
• All things are subject to interpretation whichever interpretation prevails at a given time is a function of power and not truth.
• Art is not merely an imitation of the reality of nature, but in truth a metaphysical supplement to the reality of nature, placed alongside thereof for its conquest.
• Egoism is the very essence of a noble soul.
• Extreme positions are not succeeded by moderate ones, but by contrary extreme positions.
• If a woman possesses manly virtues one should run away from her; and if she does not possess them she runs away from herself.
• Many a man fails to become an original thinker for the sole reason that his memory is too good.
• Perhaps I know why it is man alone who laughs: He alone suffers so deeply that he had to invent laughter.
• Women are considered deep - why? Because one can never discover any bottom to them. Women are not even shallow.
• Words are but symbols for the relations of things to one another and to us; nowhere do they touch upon absolute truth.
• Never yield to remorse, but at once tell yourself: remorse would simply mean adding to the first act of stupidity a second.
• Cause and effect: such a duality probably never exists; in truth we are confronted by a continuum out of which we isolate a couple of pieces, just as we perceive motion only as isolated points and then infer it without ever actually seeing it. The suddenness with which many effects stand out misleads us; actually, it is sudden only for us. In this moment of suddenness there are an infinite number of processes which elude us. An intellect that could see cause and effect as a continuum and a flux and not, as we do, in terms of an arbitrary division and dismemberment, would repudiate the concept of cause and effect and deny all conditionality.
• How did logic come into existence in man’s head? Certainly out of illogic, whose realm originally must have been immense. Innumerable beings who made inferences in a way different from ours perished; for all that, their ways might have been truer.
• Over immense periods of time the intellect produced nothing but errors. A few of these proved to be useful and helped to preserve the species: those who hit upon or inherited these had better luck in their struggle for themselves and their progeny. Such erroneous articles of faith… include the following: that there are things, substances, bodies; that a thing is what it appears to be; that our will is free; that what is good for me is also good in itself.
• What, if some day or night a demon were to steal after you into your loneliest loneliness and say to you: "This life as you now live it and have lived it, you will have to live once more and innumerable times more; and there will be nothing new in it, but every pain and every joy and every thought and sigh and everything unutterably small or great in your life will have to return to you, all in the same succession and sequence - even this spider and this moonlight between the trees, and even this moment and I myself. The eternal hourglass of existence is turned upside down again and again, and you with it, speck of dust!"  Would you not throw yourself down and gnash your teeth and curse the demon who spoke thus?… Or how well disposed would you have to become to yourself and to life to crave nothing more fervently than this ultimate eternal confirmation and seal?
• Democratic institutions are quarantine arrangements to combat that ancient pestilence, lust for tyranny: as such they are very useful and very boring.
• Men have on the whole spoken of love with such emphasis and so idolized it because they have had little of it and have never been allowed to eat their fill of this food: thus it became for them ‘food of the gods’. Let a poet depict a utopia in which there obtains universal love, he will certainly have to describe a painful and ludicrous state of affairs the like of which the earth has never yet seen - everyone worshipped, encumbered and desired, not by one lover, as happens now, but by thousands, indeed by everyone else, as the result of an uncontrollable drive which would then be as greatly execrated and cursed as selfishness had been in former times; and the poets in that state of things - provided that they were left alone long enough to write - would dream of nothing but the happy, loveless past, of divine selfishness, of how it was once possible to be alone, undisturbed, unloved, hated, despised on earth, and whatever else may characterize the utter baseness of the dear animal world in which we live.

Recently, some political commentators have called for the United States government to become more open; however there are some issues that must be raised.

One that immediately comes to mind is the issue of the economy.  It’s well-known that politicians lie about the reality of economic recession because the truth usually would just make the economy worse.  Some concluded that Franklin D. Roosevelt’s honesty caused the United States to sank even further into the Great Depression.

The reason that the United States federal reserve or any other central bank for that matter, is shrouded in secrecy is because if the federal reserve/central bank is to manage the economy, it must insulate itself from this economy, thus preventing its own intentions from feeding back into the market.

The most important issue is that of war.  A country with an open government is at a huge disadvantage when battling against a country with a closed government.  Nothing illustrate this point better than the Israel-Lebannon War of 2006, in which an open democracy like Israel was portryed by the media as incompetent, chaotic and stranggled by bureacracy; in contrast, Hezbolla, a closed theocratic government, by careful manipulation of the press, was portrayed by the media as efficient and organized.

A better title for Jeane Kirkpatrick’s latest and last book Making War To Keep Peace would be Threatening War To Keep Peace.  Of course, if your enemy doesn’t take your threat seriously, then you would be forced to go to war for real.  The effectiveness of a threat depends on how effectively you can convince your enemy of the seriousness of your threat; which is something the United States is struggling to achieve.