Tuesday, November 29, 2011

The Life Cycle of Bad Ideas

The world is awash in bad ideas; so I thought I would write a short piece on the life cycle of bad ideas.

All bad ideas start out as progressive. The originator of the bad idea is self-deluded and thinks that he found a magical shortcut to progress.

Bad ideas tend to concentrate benefits on a few and the costs on the many. The marketers for bad ideas will present them to these beneficiaries as liberating, and will exhort nay-sayers to open-mindedness.

So, at birth, bad ideas are liberal.

As people begin to realize that a bad idea is not liberating, it will become the protectorate of the centrist who is anxious to support anything that is compromising.

After a bad idea has been tried and disproved, the bad idea becomes the fodder of the Conservative who will defend the bad idea because that's just the way it is.

So, if you look at any given bad idea, you are likely to find that it has been supported at some time or other by progressives, liberals, centrists and conservatives.

Sadly, in our partisan age, anyone who calls out a bad idea as a bad idea is likely to get attacked from all sides.

Sunday, November 27, 2011


My sites went down Thanksgiving. The sites came back online on Black Friday, but traffic did not recover. I had one sale on Saturday from Vanns. I love Missoula, one actually feels a sense of community in Montana towns.

I had $10 in my Paypal account, so I decided to buy a pair of in-ear buds from 2xl.com. I wish there were more programs like 2xl. This is a division of Skullcandy that simply focusses on selling one item: headphones. They have three basic styles of earphones (over ear, ear hangers and in-ear), a good price point and free shipping. (shipping calculated into the price).

I prefer this type of focussed shop to big stores that try to be everything to every person.

Friday, November 25, 2011

Reverse Incentives

Looks like Black Friday will not put me in the black. The sites went down yesterday and didn't come back until early this morning.

Due to web outages, the income from my web site has been decimated.

What is interesting is that I find I find myself working harder because of the drop in income than I would if my income had increased.

If times were better, I would be relaxing in the good times.

Labor seems to work in the opposite direction from capital. When markets are week, people remove their capital from the market, but they start working harder and harder.

Clearly, labor does not have the same regulatory mechanism as capital.

A balanced economy neither overemphasizes labor nor capital.

Well, because my income is down, I need to end this post on a commercial note; So, on a commercial note: here is a deal sheet for Salt Lake.

Tuesday, November 22, 2011

Political Occupation of Wall Street

The WSJ published a great opinion piece by Sarah Palin on the occupation of Wall Street.

The article notes that members of Congress and political leaders routinely make great fortunes on Wall Street as they routinely receive sweetheart deals on financial productions and trade on insider information.

Our current economic paradigm is one in which people on the outside of the political structure are pitted against eachother in self-destructive competition while those on the inside divide up the spoils.

The vast unearned, risk-free fortunes made by the political class show that there is substantial collusion between the big government and big business.

Sadly, we can't legislate this collusion away. The political class is adept at turning any regulation to its favor. The greater the regulatory burden, the greater the need for political collusion in business.

There is a way out. Businesses on the outside of the good-old-boy network could start working together to provide alternatives to the services provided by government. If we chose, we could reject the poison the political class feeds us.

Monday, November 21, 2011

The Market and The Mind

The market is a product of the mind.

The human mind is pretty much the only thing on this planet that honors our money.

The greatest determining factor in the health the markets is the collection of ideas that people have about the market.

Since the market is a collection of ideas we have about the markets, then what we think about the market matters.

If a large number of people think that the market is a place where one must dominate or perish, then the market turns into an ugly place where one must dominate or perish (with more people perishing than dominating).

If one thinks that the market is a predatory environment where base creatures are set against eachother in brutal competition for survival, then the market becomes just such a place.

When business leaders are trained in the art of war and see the market as a battlefield, then the market becomes an ugly battlefield with people holed up in encampments doing business war with eachother.

People have known that the market is a product of the mind for ages. The left has this fantasy of an engineered society with philosopher kings dictating good behavior.

The left uses its hegemony in the schools and media to perpetuate every negative idea that people have about the market ... knowing that when enough people believe the market is such, that the market will become such.

Conservatives believe that they can defend freedom by reacting, but one can't win the war of ideas by rolling up into a reactionary ball. The reactionary surrenders the whole definition of culture to the enemies of freedom.

The reactionary is as great a threat to liberty as the wild-eyed radical.

America has been caught in the tug of war between radicals and reactions for the last century. As a result, there has been a systematic loss of freedom.

Conservatives have been consistently ineffective at defending freedom. Reactionary politics does not advance freedom.

To restore freedom, we actually have to have a pro-freedom movement. This is next to impossible because conservatives keep throwing themselves in the way.

A profreedom movement would start with the realization that the market is the creation of the human mind. The market is a product of our collective thoughts about the market.

The battle against freedom has been waging since antiquity. To restore our freedom, people must challenge every single idea that they have about the market.

I've asked fundamental questions and came up with surprising answers. I asked if competition was the foundation of the free market. I realized that it wasn't. Freedom is the foundation of the free market.

I asked if business was war. Of course, it is not. When people apply the ideas of Machiavelli and Sun Tsu to the market place, they diminish the market place.

Those who are engaged in "business war" are enemies of freedom.

Stock traders and hedgefunds who see themselves as predators to cull the herd are enemies of the free market.

We can't outlaw modes of thinking, but we can challenge them. So, the best path to restoring the free market is to directly challenge all of the negative ideas about the free market being taught by the enemies of the free market.

Thursday, November 17, 2011

Metaphorically Speaking

In the last post I pointed out that Adam Smith wrote the Wealth of Nations for the ruling elite. There is nothing wrong with that. The goal of the Wealth of Nations was to show 18th century English aristocrats that freeing up the market would help them in their never ending war with France.

There is nothing wrong with writing for an audience.

The enemies of freedom use the fact that Smith wrote for the ruling elite to falsely frame the free market as if were a tool only for the ruling elite.

If I wrote an article about using a tooth brush to clean grout, would this article invalidate the use of toothbrushes for cleaning teeth?

They are wrong. An unfettered market does more to pull people out of poverty than any socialist scheme.

The enemies of freedom use other forms of misdirection to attack the free market.

Every single time a defender of liberty uses a metaphor, the left traunces on the metaphor, then pretends that the metaphor is the foundation of the free market.

For example, a shopper might say "I am hunting for a pair of shoes." The enemies of freedom will then use that metaphor to claim that the free market is nothing but a predatory environment.

Business leaders have an unfortunate tendency to use war analogies. The enemies of freedom play war analogies to the hilt.

In school I attended a string of classes that played on the the notion that business was a battlefield and that one must dominate or perish.

There are so many books about applying the art of war in business that it turns my stomach.

The free market is not about business war. Wars are a political issue. Wars are about destroying enemies. The free market is about people maximizing the return of their personal assets.

Unfortunately, when business leaders are taught these negative analogies and develop the crazy notion that business actually is war, then they will engage in anti-market behanvior.

Like all systems, the free market is subject to the reflexive paradox. When a market allows anti-market activities, the market ends up negating itself.

Classical thinkers sought to avoid paradox. Classical liberals realized that the key to a free society is to avoid the paradox. One cannot have the freedom to deny others freedom.

Business leader taught the false notion that business is war are apt to engage in activities that deny others the ability to engage in the market.

Overemphasizing the role of competition does the same thing. A businessman consumed with the idea of beating the competition is apt to engage in anti-market activities to destroy their competition. Activity designed to prevent others from participating in the market is anti-market.

The predatory metaphor is innocent until one starts setting up other humans as prey. People hunting for the best running shoes leads to better shoes. When business predators set up their fellow man for a fall, they are directly engaged in anti-market activity.

There is nothing wrong with the use of metaphors as metaphors. The game of pretending that metaphors are the foundational premises of the market leads people to engage in anti-market activities.

When schools teach that business is a war in which one must dominate or perish, the students will take that poison from the classroom into the market and are likely to engage in activities that undermine the people around them.

The free market is not war. The free market is a system in which free people seek to maximize the benefit they receive from their assets. The free market is one in which each free person is seeking to make the best use of their minds, their time, their business connections and any other resources they possess.

This notion that freedom is a war is a myth being perpetuated by the enemies of freedom.

Don't people get it? Karl Marx, the father of Capitalism, wrote Das Kapital in an effort to project false images on the free market. Marx knew that the free market was susceptible to the reflexive paradox. So in Das Kapital (the foundational document of modern Capitalism) he emphasized every metaphor that would lead people to engage in anti market activity.

It is next to impossible to regulate out anti-market activities. Regulation, by nature, is an anti-market activity. Regulatory regimes try to use anti-market activities to control anti-market activities. The end result is, more often than not, even more anti-market activities.

There is no free market in American. Most people have been reduced to wage labor slaving under business warlords playing anti-market games to avoid the competition that would exist in a real free market.

Those wishing to restore the free market have a difficult task.

I believe the first step to restoring the free market is to realize that our schools are controlled by enemies of the free market and that they seek to destroy the free market by projecting false images on the free market.

The champions of the free market need to directly challenge the misuse of metaphors and other false images projected on the free market.

The free market is not a war. It is not a state of total competition. It is not a predatory environment. The free market is one in which free individuals control their own resources. A free person does not have the freedom to take the freedom of others. A free person is encouraged to find ways to make the most of his or her given resources.

Don't you get it? The primary reason that Americans are losing their freedom at every turn is that the enemies of freedom have captured our cultural institutions and project false images onto the market.

To restore freedom we must reject the false images projected on the free market.

Tuesday, November 08, 2011

Adam Smith Wrote for the Ruling Elite

Competition is not the foundation of the free market. The foundation of the free market is freedom.

In a free society, people seek ways to make the best use of their time and resources in a community environment. As each person strives to make the most of their personal resources people end up competing in their ability to cooperate.

In the "Wealth of Nations," played up the role of competition in the market and diverted attention from the role of cooperation. For example he used complex terms like the division of labor to explain how people cooperated.

Adam Smith wrote "The Wealth of Nations" for the ruling elite of England in 1770. As the title of the book suggests, Smith argued that the king should allow free market reforms because it would help England in its never ending war with France.

Smith wrote for the English ruling elite.

The ruling elite love to see the people pitted in competition against each other. Rulers have used contrived competitions since antiquity.

In ancient Rome, they were actually throwing people into pits (coliseums) to engage in death battles. The ruling elite love competition.

Conversely, the elite fear commoners cooperating amongst themselves because such cooperation makes the rulers superfluous.

Smith knew his audience. He played up the role competition plays in markets and played down the role of cooperation.

Smith used bizarre terms like "The Division of Labor" to describe cooperation and really drove the point that merchants were always competing for market share.

Please note. The business that is best at helping customers achieve their goals wins market share.

The beauty of the free market is that people compete in their ability to cooperate with others.

In contrast, the derived competitions of the ancient regime tended to be base and destructive.

Sadly, the enemies of the free market have been able to take Adam Smith and use the fact that he wrote for the ruling elite to claim that the free market is simply about building a new elite.

This tact is absurd. Imagine if a physicist wrote a childrens book on Quantum Mechanics. Would this mean that Quantum Mechanics is just for children?

This is the tact taken by Karl Marx in "Das Kapital" (the foundation of modern capitalism).

Marx holds that since Smith wrote "The Wealth of Nations" for the ruling elite, that capitalism exists solely for the benefit of the ruling elite.

Marx takes the fact that Smith overemphasized competition to frame the free market as a dystopia in businesses were pitted against each other in a death struggle in which one must dominate or perish.

When one builds a market in which dominating the competition becomes the primary focus of existence, then the market becomes a base, nasty system littlered with carcasses.

The philosophy is self-fullfilling. When business leaders are taught that they must dominate or perish, then they are apt to engage in anti-market activities.

Treating competition as if it were the foundation of the free market leads to people to engage in activities that undermine the market.

People who are taught the Marxian view of economics tend to engage in anti-market activities that undermine themselves and the people around them.

This is the fault of the Marxian view of economics. It is not the fault of freedom.

Competition is neither the foundation or, nor is it unique to the free market.

Freedom is the foundation of the free market.

When people are free to choose, they choose to form mutually beneficial associations. As time and resources are limited, free people begin to engage in the paradoxical activity of competing in their ability to cooperate.

Cooperation plays a bigger role in the market than competition.

What I learned in school about markets and competition was wrong. By teaching the Marxian view of the markets, our progressive schools are engineering the destruction of our freedom.

Sunday, November 06, 2011

Restoring the Free Market

The small business community is falling apart because too many businesses and workers have fallen into an isolationist mindset.

Our progressive education taught us that competition is the foundation of the free market and that businesses in a free society are supposed to be in some sort of dysfunctional death struggle.

Progressives are the enemies of freedom. Progressives intentionally mislead the people in their unending grub for centralized power.

Competition is not the foundation of the free market. Freedom is the foundation of the free market.

To save the free market, concerned business leaders need to find ways to pull the large number of disenfranchised Americans out of their isolated holes and into active participation in the market.

Competition is not the foundation of the free market. The freedom to develop one's own personal relations is the foundation of the market.

In a fully actualized free market, people would end up with diverse relations in their career. They would know more than just the people in their company.

Freedom, not competition, is the foundation of the free market. As people want to make the most of their resources and relations, people end up competing in the ability to cooperate.

I've spent several thousand hours developing directories in the Community Color Brand to emphasize the need to establish more lateral links between businesses.

Businesses are unwilling to link to other businesses, the result is that the web is now being dominated by only a few companies.
Currently, we are stuck in the dystopia of the Organization man where most worker's professional network includes little more than subordinate relations to the bosses above and stressful relations with those below in a hierarchical organization chart.

My last post contrasted centralized and distributed networks. A true free market would look more like a distributed network. 

In a centralized network, you have the people above you and the people below you. One can transform a centralized network into a distributed network by creating more lateral links.

Social networking and link building can play a role in forming more lateral links. To re-establish the free market, we need to do more. We need to find ways to help people engage in business outside this top down structure being imposed on our society.

It is absurd to look to politics to save the free market. The one and only way to restore the free market is for business leaders to find ways to pull the disenfranchised out of the hole dug by progressives into a vibrant free market.

Friday, November 04, 2011

Cooperation in a Distributed Network

I found the following image on wikipedia a few months back. I thought it was from an article on Distributionism. I had a computer crash and lost my database of references.

The graph shows a centralized, decentralized and distributed network.

In the centralized network, you attempt to have one centralized force in control of the whole system. This is the direction of socialism.

The decentralized network has multiple centers of authority. Bureaucracies often use a hybrid system with a hierarchical system of authorities distributed through the system. in feudalism there was a chain of being with the emperor at top followed by kings and lords leading down to the serfs.

In looking at this model, I realized that a free market is likely to take the form of the distributed model. With people free to choose their associations, one will end up with a very complex, but robust distributed network.

I've been writing about the paradoxes associated cooperation and competition.in the free market. In a free market, people are free to choose their associations and tend to make associations that better their lot. People compete on their ability to cooperate with others.

This is opposite of what I learned about the free market in school which painted the free market as a system of base competition driven by greed.

It dawned on me that our academic institutions and financial institutions have been trying to impose a dececentralized model onto what should be a fully distributed network.

For example, I discovered that wikipedia defined collusion as "cooperation among competitors."

But in a free society, people should be able to work with whoever they wanted to work with.

Doctors are apt to hang out with other doctors. Web designers like to hang with other web designers and so on.

In a truly free society, people would have mutually beneficial relations with others in the same market. I define true collusion as any group activity designed to limit the access that others have to the market. Price fixing limits the ability to negotiate prices, etc.

Labeling all cooperation among people in the same industry as collusion cuts the necessary mutually beneficial links needed in a truly free market.

It think the graph that contrasts centralized and distributed markets starts an interesting conversation on the type of structures that one should see in a free market.

In my opinion, a truly free market should end up looking like the distributed model. What we have today is a decentralized hierarchy.

This tells me that there is something going wrong with our markets today.

Wednesday, November 02, 2011


The last two posts were about cooperation. Cooperation exists in all socio-economic systems. What matters is the way these two forces mix together.

The foundation of the free market is freedom. Free people are free to choose their relations. The result is that people free people end up competing on their ability to cooperate.

Not all cooperation is good. When Party A cooperates with Party B to exclude Party C from the market, they are engaged in an anti-market activity.

The word for this typle of activity is "collusion."

Please note. The problem here is not cooperation, but that they are engaged in antimarket activity. If Party A took it upon himself to exclude Party C from the market, then the activity is still negative.  When people cooperate in a promarket fashion they improve the competitive climate.

Classical thinkers sought to avoid paradox. Classical liberals realized that to preserve a free market one needs to actively prevent anti-market activities. The key to collusion is that the parties engaged in anti-market activity.

In contrast, let's look at the Wikipedia's definition of "collusion" [drawn 11/2/11]

"In the study of economics and market competition, collusion takes place within an industry when rival companies cooperate for their mutual benefit."
This definition labels any cooperation between competitors as collusion.
I wish to point out that this definition is both absurd and is anti-free market.

It is absurd to say that two people in the same industry cannot associate with each other because they are "competitors." A capenter is likely to have other carpenters as friends, and these friendships are likely to be mutually beneficial.

This definition is also anti-market.

Remember the key to the free market is freedom of association. Carpenters are free to associate with other carpenters. Programmers are free to geek out with other programmers.

When people of the same profession associate, they engage in mutually beneficial activities such as discussing best practices and industry standards.

Labeling cooperation among competitors as collusion is absurd. In a free society, people are free to have relations with other people ... even people in the same industry.

True collusion only occurs when groups engage in activities that activities that deny the rights of others. Professionals discussing best practices, standards and billing practices is not collusion. Price fixing is collusion because it denies consumers the right to negotiate price. Any activity to deny people market access is collusion.

The free market is a cooperative structure in which people are free to form their own associations.

Proponents of the free market must find ways to counter the false images projected onto freedom.

Twitter Game

My twitter account flat-lined last month. Several hundred people blocked me for criticizing Occupy Wall Street.

Anyway, I ran JustUnfollow to clean up the account.

I noticed that my follow count is 9358. That is 642 short of the 10K milestone that separates the whales from the krill. If I follow 2000 people and a third follow back, I would hit the milestone.

So, today is 11/2/11 or 11022011. I updated my profile with a new link and will start a mass follow session. This takes me awhile because I actually read the first page of posts for each person I follow.

Because of my Community Color project, I will try to concentrate on people in Arizona, Colorado and Utah.

Because of the Medical Savings and Loan Project, I like to follow fellow free-marketeers.

Well, let the games begin. Reading 2000 pages of tweets will take some time, and it likely to blow up in my face with more blocks than new friends ... but the media is the message and on twitter one tweets.