Jack Bogle: Investment Revolutionary — Jack Bogle: Revolutionär des Sparens

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A post in English and German

Jack Bogle, the legendary founder of Vanguard, passed away yesterday at age 89.

He may not be the most well-known investor but he’s had by far the biggest impact on the investing public.

Warren Buffett said it best in his 2016 annual report:

If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. In his crusade… Jack was frequently mocked by the investment management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.

Here are some things I learned from this brilliant man:

Make sure to read the entire article.

Meine Übersetzung:

Jack Bogle, der legendäre Gründer von Vanguard, ist gestern im Alter von 89 verstorben.

Er war vielleicht nicht der bekannteste Anleger, aber er hatte den mit Abstand größten Einfluss auf die Anleger dieser Welt.

Am besten hat es Warren Buffett in seinem Jahresbericht 2018 ausgedrückt:

Sollte jemals ein Denkmal zu Ehren des Menschen errichtet werden, der sich die größten Verdienste um amerikanische Anleger erworben hat, müsste Jack Bogle die Wahl um Längen gewinnen. Jahrzehntelang hat Jack Anleger beschworen, in die kostengünstigsten Index-Fonds zu investieren. Auf seiner Mission ... musste Jack oft den Hohn der Vermögensverwaltungsbranche über sich ergehen lassen. Heute jedoch hat er die Genugtuung zu wissen, dass er es Millionen von Anlegern ermöglicht hat, viel höhere Erträge zu erwirtschaften, als sie dies auf jede andere Weise erreicht haben könnten. Er ist ihr Held – und meiner auch. 

Mathematicians, Poets, and Economists — Mathematiker, Poeten und Ökonomen

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A Post in German and English.

Joan Robinson, englische Wirtschaftswissenschaftlerin aus dem persönlichen Umfeld von John Maynard Keynes, stellt in ihrem Buch Economic Philosophy einen Vergleich zwischen Mathematikern, Dichtern und Ökonomen an: Die Mathematiker zeichnen sich dadurch aus, dass sie auf gemeinsame Verfahren für den Nachweis von Fehlern zurückgreifen. Im Gegensatz dazu verfügen Dichter über keine gemeinsame Methode für das Erkennen von Irrtümern. Wirtschaftswissenschaftler nehmen eine Zwischenstellung zwischen Mathematikern und Poeten ein.

„Die Ökonomie kommt humpelnd daher, denn sie steckt mit einem Bein in ungeprüften Hypothesen und mit dem anderen in Behauptungen, die sich nicht prüfen lassen.“

So meine Übersetzung des folgenden Zitats von Joan Robinson – haben Sie eine bessere? [Ich habe inzwischen bei der Übersetzung des Satzendes den Vorschlag der Kommentatorin übernommen.]

„[E]conomics limps along with one foot in untested hypotheses and the other in untestable slogans.“

Quelle.

Der Sinn des Lebens

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Mit Sprache kann man erstaunliche Dinge tun – z. B. Handlungen vollziehen, die auf nichts anderem als einer Äußerung beruhen:

„Meine Worte hatten dich beleidigen sollen“ – hier wird durch eine Äußerung, eine Tat begangen, sichergestellt, dass ein verletzender Akt als solcher wahrgenommen wird. Die Sprachphilosophie spricht von einer sogenannten performativen Sprachhandlung oder einem illokutionären Akt.

Man kann auch durch die formale Struktur einer spachlichen Äußerung Menschen – wissentlich oder gezielt – in die Irre führen.

Wer eine Frage stellt, löst im Gegenüber unwillkürlich die Erwartung aus, eine Antwort sei erforderlich und möglich.

Ich habe lange gedacht, dies träfe zu, wenn die Frage gestellt wird:

Was ist der Sinn des Lebens?

Man werde durch die grammtikalische Struktur des Fragesatzes quasi in die Pflicht genommen, eine Antwort zu geben, wo es keine gibt.

Ich habe früher darauf geantwortet, dass es DAS LEBEN überhaupt nicht gibt, sondern nur einen Ablauf diskreter Lebensereignisse, die äußerst unterschiedlich sein können und nicht im Zusammenhang zu einander stehen, geschweige denn Teil einer lückenlosen Kette sein müssen. Die Frage suggeriert also ein Objekt, das überhaupt nicht existiert. 

Man kann versuchen, Aspekte des Lebens daraufhin zu bewerten, ob sie sinnvoll sind, einen Sinn ergeben, einen Sinn besitzen. Das Leben als Gesamtheit existiert aber nicht und kann daher nicht auf seinen Sinn hin befragt werden.

Selbst, wenn wir große Zusammenhänge unseres Lebens der Sinnfrage unterwerfen, und das vielleicht auch nach unserem Empfinden mit Erfolg, zeigt sich bei genauerem Hinsehen, dass auch diese „großen Würfe“, nur Ausschnitte sind in einem Ozean an Perspektiven und Gesichtspunkten, nach denen die unendlich vielfältigen Erfahrungen des Leben sich ordnen lassen. 

Vielleicht bestand der Sinn meines Lebens darin, ein Land zu missionieren, und nachdem mir dies gelungen ist, kann ich bekräftigen, dass mein Leben einen Sinn gehabt und sich dieser erfüllt habe. 

Doch wie gesagt, damit hebe ich nur einen Ausschnitt meines Lebens hervor.

Niemand bestreitet, dass man sinnvolle Ziele verfolgen oder ein Leben führen kann, das einem großen Ziel dient, von dem man empfindet, dass es der eigenen Existenz einen Sinn gibt. Freilich kann man sich darin täuschen oder diesem Gefühl, ein Leben zu leben, das durch eine große Sinn-Klammer zusammengehalten wird, verlustig gehen. Auch kann vieles, das zu einem sinnvollen Leben gehören könnte oder sollte, unterdrückt und verpasst werden, wenn man zu sehr auf das eine große Sinnthema hinlebt.

Der gesamte Fluß des Lebens enthält eine unendliche Fülle an Sinnhaftem, vieles davon trivial aber lebenswichtig – ein geordneter Tagesablauf zum Beispiel: genügend Schlaf, gute Nahrung, ausreichend Bewegung, erfolgreiche Tätigkeiten im Beruflichen und in anderen Kontexten. 

Vermutlich ist es sogar ein ganz besonders glückliches Talent, nicht allzu anfällig zu sein für Sirenenrufen, die dem Leben Sinn zu geben versprechen.

Eine Mutter von fanatischer Religiösität, die auf den einen, den ganz großen Sinn des Lebens hinausgreift, kann vielleicht ihre Kinder deswegen vernachlässigen und verdankt es nur ihrer Verblendung, dass sie nicht merkt wie ihr Leben – nach den eigenen Maßstäben – scheitert.

Ich glaube, es ist besser, das Thema zu portionieren und darauf zu achten, dass man Sinnvolles im Leben tut, statt alles auf die eine große Karte zu setzen.

Ich glaube auch, dass die beste Antwort auf die Frage nach dem Sinn des Lebens lautet: Es macht Spaß zu leben – ich lebe gerne.

Denn weder die Welt, in der wir leben, noch wir als Gewächse der Evolution, sind dafür gemacht, auf eine große, quasi lebenanschauliche Überwahrheit hin zu leben – so sehr sich auch Machthaber und ihre Schafe ein grandioses Bühnenbild mit dem totalitären Pomp von Absoluta und Ewiggültigem wünschen.

Der Mensch ist seine eigene Allzweckwaffe. Er ist ausgerüstet mit Dispositionen, Instinkten, starken emotionalen Orientierungshilfen. Wie David Hume es einmal, vielleicht etwas überspitzt ausgedrückt hat: Der Kopf ist der Sklave des Gefühls. Das heißt nicht, dass der Mensch kopflos, unüberlegt und irrational ist. Das Diktum ist darauf gemünzt, dass das, was dem Sinn des Lebens vielleicht am nächsten kommt, die Befriedigung ist, die der Mensch empfindet, wenn er seinen grundlegenden Neigungen gemäß leben kann. Die Logik, zu der unser Hirn fähig ist, verleiht dem Leben nicht seine Vitalkraft, das Gefühl der Lust an ihm. Das kommt aus der Tiefe des Gefühlsmäßigen, der Intuitionen und Instinkte.

Das Leben hat einen Sinn, wenn es Spaß macht – oder ein Iota weniger hedonistisch: wenn man sich in ihm wohlfühlt.

Der Sinn des Lebens ist die Freude am Spiel, das uns begleitet, bis wir sterben.

Natürlich kann auch ein übergreifender und lange durchgehaltener Zweck Teil des Bündels an Dingen sein, die unsrerem Leben Sinn verleihen. Aber in der Regel wird das Maß der Sinnhaftigkeit eines Lebens nicht durch Verfolgung eines Ziels, eines Motivs eine befriedigende Qualität, ein ausgewogenes Niveau erreichen, sondern dadurch, dass man offen bleibt für die Vielfalt der Neigungen, mit denen der Mensch ausgestattet ist als ein Lebewesen, das wie andere Tiere auch, nicht durch Gedanken allein, sondern durch die Empfindungen motiviert wird, in denen der Verstand wurzelt.

Wie dem auch sei, die Frage nach dem Sinn des Lebens ist aber von allgemeinerer Natur als die Inspektion des eigenen Lebensgefühls.

Es ist zweifelhaft, ob sich eine allgemeine, eine objektive, eine allgemein gültige Antwort geben lässt, oder ob es überhaupt erstrebenswert ist eine solche Universalklärung herbeizuführen. Sind daran nicht eher Machtsuchende interessiert, die die breite Bevölkerung auf ihre ideologischen Bedürfnisse einschwören möchten?

Traditionell ist die Frage nach dem Sinn des Lebens oft eine Fangfrage der Pfaffen gewesen, die den gesund Geerdeten – und umso effektiver den Labilen und Unsicheren – in das Durcheinander eines unerwarteten Rätsels stürzen, um ihn gefügig zu machen für ihre vorgestanzten Weisheiten.

Water Cycle — More Evidence: No Catastrophic Man-made Climate Change

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If people were truly interested in climate — rather than in being socially accepted by sharing a politically correct religious preconception—, these findings would be greeted with hope, widely disseminated and seriously discussed — when, in fact, they are handled as a grave nuisance, the outcome of a vicious conspiracy of evildoers.

Climate models postulate that increasing CO2 concentrations will intensify the Earth’s water cycle. This intensification is believed to eventually result in dangerous (3°C and up) global warming. Observational evidence has thus far falsified these IPCC-endorsed claims.

Read the entire article.

New York Times, Der Spiegel, and Their School of Fish

Notice, the above illustration was featured in an 1894 issue of Puck magazine. Image credit.

I've been on about it for years.

In Germany, this is quite a scandal in media circles, because Der Spiegel is like their version of New York Times. That is, it positions itself as the official arbiter of truth, with regards to public morality. They not only decide what is true, they decide which truths can be said. Worse yet for them, they have been bragging about their fact checking for a long time. As a result of this tent pole toppling over, the German media is scrambling to convince everyone that it is an isolated incident, not a system failure. 

The amusing bit is the German media is rushing around looking puzzled, as to how the vaunted fact checking system could have failed. After all, the best people are in control of the media. How could the best people have made such basic errors? As is the case in America, whenever these things happen, the media hand-wringing is just a dodge. What really concerns them is how easy it was for two bumpkins from dirt country to sluice out the facts from the fiction in this particular article. 

That’s always the thing with these scandals. The media big shots always come off as if they have been insulted about their shenanigans being revealed. In this case, the other major media outfits are rallying to defend Der Spiegel. In the dreaded private sector, competitors are always quick to take advantage of the mistakes of a competitor. In the main stream media, the opposite is always true. They circle the wagons and begin lecturing the hoi polloi about the dangers of questioning the media. 

That is the real cause of these scandals. For a long time, the mass media in the West has been a mono-culture. You can’t have a career in the media if you don’t hold all the right opinions. To call the media an echo chamber for the left is to understate the problem. The better analogy is a school of fish. Each individual just reacts to those around him, giving the effect of the school having agency as a whole. What looks like collusion is just the result of a uniformity of mind, experience and social class. 

That’s why no one at Der Spiegel, or anywhere else in the German media, noticed the fraudulence of Claas Relotius. He was writing the things his coevals and superiors said at luncheons, cocktail parties and in the office. His story about slack-jawed yokels in the American heartland ticked all the boxes popular with the left-wing cultural outlook. He was not sent there to report on the place. He was sent there to confirm what his employers already knew about Middle American and Trump voters. 

This is why Western media is something worse than propaganda. The person hired by the state or hired by the corporate marketing department has self-awareness. They know their job is to polish the apple of their superiors. The tricks they employ to do that are done with a knowledge and forethought. The guy telling the public that his employer, the pesticide company, is deeply concerned about the environment does so knowing full well that no one believes him, including his family. 

The media is a different thing. They really believe their own nonsense. They think they are part of a special class of human, a priestly class that not only reports facts to the public, but provides moral instruction. The mass media is so intoxicated by their own self-righteousness, they lack the ability to question their own actions. [An attitude aped, internalised and rapturously  paraded by the politically correct German. Which explains the politisch korrekt vorauseilende Gehorsam of readers of Der Spiegel and Süddeutsche Zeitung and New York Times, who invoke these papers as sources of unassailable objectivity like my friend here; IGTU.] When Claas Relotius came back from the bush, reporting exactly what his bosses knew was the case, they had no reason to question it. It was too good to check.

The source.

The New York Times — The World According to It

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The gentleman who told me that he had total trust in (DER SPIEGEL, Süddeutsche Zeitung and) The New York Times, will be informed by the latter that the USA (having, thanks to fracking, duly decreased CO2 emissions as opposed to Germany), nay, the Trump administration, imperil the planet, "taking the country, and the world backward."

Perhaps you can recall a smug Pravda on March 29, 2017, shortly after Trump took office, awarding the coveted mantle of “climate leadership” to the genius totalitarians in China. From that piece: 

“They’ve set the direction they intend to go in the next five years,” Barbara Finamore, a senior lawyer and Asia director at the Natural Resources Defense Council, based in New York, said of China. “It’s clear they intend to double down on bringing down their reliance on coal and increasing their use of renewable energy.” 

“China wants to take over the role of the U.S. as a climate leader, and they’ve baked it into their five-year plans,” she added, referring to the economic development blueprints drawn up by the Chinese government. . . . Since Mr. Trump’s election in November, senior Chinese officials and leaders have been taking the high ground on the issue by urging all countries, including the United States, to abide by their climate commitments. 

HAHAHAHAHAHAHA!! Actually what China was doing was playing the NRDC and the New York Times for the dupes they are. (The Manhattan Contrarian take on this situation — on June 8, 2017 — was “Believe Me, You Don’t Have To Worry About China Seizing ‘Climate Leadership.’”) After mouthing the right platitudes to dupe these credulous fools, China went right ahead and resumed or kept building as much new coal-fired electricity generation capacity as the U.S. has in total, to go with its existing coal-fired capacity, which is about 3 times what the U.S. has. The BBC had the story on September 26, 2018: 

Building work has restarted at hundreds of Chinese coal-fired power stations, according to an analysis of satellite imagery. The research, carried out by green campaigners CoalSwarm, suggests that 259 gigawatts of new capacity are under development in China. The authors say this is the same capacity to produce electricity as the entire US coal fleet. 

It must be that svengali Trump who made them do it! In fact, he’s so devious and clever that he got them to start all these plants even before he became President. And then, here are some of the other things that the svengali Trump has mesmerized the world into doing (from the same December 28 Pravda editorial): 

Poland’s president, Andrzej Duda, . . . declar[ed] he had no intention of abandoning coal, which provides nearly four-fifths of Poland’s electricity. . . . Further depressing the proceedings were recent defections and political troubles in countries that, along with the United States, had been expected to lead the way to a low-carbon energy future. Germany, which long ago walked away from carbon-free nuclear power, is having a hard time cutting back on coal because of political opposition. In Australia, a prime minister was kicked out of office because he wanted to reduce the use of coal, which Australia produces in abundance. 

And they don’t even mention the gilets jaunes in France. 

Here’s what else they don’t mention: Not a single country in the world has even begun to build the infrastructure that could potentially reduce carbon emissions by 50% or more. Nobody is doing it and nobody is going to do it. The only realistic way to attempt to reduce carbon emissions more than 50% in an industrial economy would be with nuclear power, which not a single country is pursuing. A frequently-mentioned but not realistic alternative would be trillions upon trillions of dollars worth of batteries. No country is pursuing that either. As I said back in August, the whole idea of reducing carbon emissions as a supposed “solution” to “climate change” is over. Not going to happen.

The source.

Bootleggers and Baptists — The Rotten Core of Political Culture in Germany

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Often in history, religious fanatics (baptists) and criminals (bootleggers) form an alliance that may be unwitting, except when the two roles are played by one and the same person, as seems to be the case with this reporter of DER SPIEGEL, who diseminated lies about people with a plight while raking in donations to the invented victims for his personal gain.

This is the fundamental formula, by which Germany's myth makers take advantage of a population craving to be told lies.

The discovery of the journalist's misconduct is a blessing in disguise for the German media, it gives them a wonderful opportunity to convince the gullible and complicit public that this is an exception perpetrated by an unusual villain.

The fact of the matter is that the scandal signifies the rule in Germany rather than a rare exception.

The country is gripped by politico-religious fanaticism – politics and the media drive and are driven by the mania.

The German appetite for a creed of absolutes has been successfully rekindled and will not go away soon. Democracy and open-minded debate are at a steep discount. Germans want leaders, better still a leader, who leads them where the craze is pointing them.

No one cares when this leader overrides the constitution, demanding the destruction of national integrity. No one cares when the country does its best in just about every aspect that matters to fall behind the international competition.

There is a huge official, state-driven black (but seen as gold) market for subsidised myths such as global warming and the Energiewende. Worship and perpetuate these myths and you will be rewarded with the subsidies. This is how baptists and bootleggers hang together in Germany.

Conceptions of Reality — Einstein and Bohr (2)

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Continued from Conceptions of Reality — Einstein and Bohr (1).

A fascinating video. Viewing it leaves me with a sense just how old fashioned Einstein was — an iconoclast in his way, highly perturbed by iconoclasm in other fields, in fact, in fields that he had brought into being. The revolutionary did not like his children. 

God does not dice, said Einstein, meaning that phenomena that do not conform with his system of causality were senselessly random and therefore militated against God's orderly and harmonious Universe.

Bohr riposted: Einstein, stop telling God what he should be like.

Einstein believed in what is effectively a disjointed but supposedly neatly uniform Universe, sustained by local causality. 

By contrast, Bohr accepted that the universe is a whole in which everything could be instantly related to everything else — effects were not constrained, slowed or localised by restrictions such as the speed of light.

The controvery was kicked off by Bohr's claim that it was not possible to measure the properties of an atomic particle, notably its speed, without disturbing it. For the measiring devices, for instance clocks, are affected by gravity.

xxx

Two aspects stand out from the point of view of my own philosophical development: man is a creature of the meso-cosmos, which explains Einstein's startling parochialism. Man is adjusted to the medium-sized dimensions of reality, essentially the world experienced by us in everyday life. But reality takes place in many other dimensions, to some of which we shall presumably never find access — though it does leave traces observable to the human mind —, while others pose tremendous challenges to our imagination and rationalising faculties.

The second aspect is touched by Bell's remark, in which he acknowledges that the evidence supports Bohr rather than Einstein, i. e. things as conceived by Quantum Mechanics do appear to be real: things can happen all at the same time unconstrained by Einstein's conventional causality. 

However, in an important sense, this does not matter, that is: it is of no import to the creatures of the meso-cosmos, as we are (as yet) unable to take practical advantage of the goings-on outside of our causal cage — for instance teleportation.

We are like a tiger behind a thick glas wall in a Zoo wondering why that tiny little girl that keeps provoking him remains impervious to his attacks.

Continued here.

Unscientific Climate Policy

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Following up on this German post:

Leading media outlets like DER SPIEGEL are notoriously happy to discard the duties and rigours of professional journalism in favour of promoting their ideological preferences. 

This is how the German public is being shielded from the truth and politically biased instititions are encouraged to advance far reaching claims, presenting them as endorsed by the scientific consensus when these propositions are in fact unsupported, even contradicted, by scientific research.

Quoting from here:

Professor Bates examines some key aspects of the SR1.5 report. He assesses if the IPCC report exhibits a level of scientific rigour commensurate with the scale of its extremely costly and highly disruptive recommendation that carbon emissions be reduced to zero by mid-century.

The paper concludes that such a level of scientific rigour is not present in the report. Specifically, SR1.5 is deficient in scientific rigour in the following respects:

● It departs from the IPCC’s Fifth Assessment Report in conveying an increased sense of planetary emergency without giving rigorous scientific reasons for doing so.

● It fails to communicate to policymakers a considerable body of important observationally-based research evidence that has accumulated since the Fifth Assessment which reduces the sense of a looming emergency.

● It fails to communicate important information made public by climate modellers since the Fifth Assessment regarding the empirical tuning of models to achieve desired results.

The paper concludes that, in view of these deficiencies, the SR1.5 report does not merit being regarded by policymakers as a scientifically rigorous document.

“There is much recent observational and scientific evidence that the IPCC report has failed to include and which supports a more considered mitigation strategy than the extreme and unrealistic measures called for in the SR1.5 report,” said Prof Bates.

Über die unwissenschaftliche Klimapolitik

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Der Astrophysiker Peter Heller erklärt, warum die Klimapolitik unwissenschaftlich ist. Bitte lesen Sie diesen Artikel eines deutschen Wissenschaftlers, der den Mut hat, derartiges in einem Land zu schreiben, wo eine nüchterne faktengestützte Einschätzung der Klimadebatte mit erheblichen persönlichen Gefahren verbunden ist.

Die Klimapolitik ist nicht nur unwissenschaftlich, sie ist anti-wissenschaftlich, denn sie beruht auf der aktiven Bekämpfung und Unterdrückung unvoreingenommer wissenschaftlicher Forschung.

Lügen werden in diesem Land nicht nur vom SPIEGEL systematisch verbreitet, dessen politisch korrekter Betrug ist nur die Spitze des Eisbergs. Lügen und Unwahrheiten bilden die Basis vieler staatstragender Projekte, einschließlich der Energiewende und der Opferung des deutschen Nationalstaats am Altar einer Fehlkonstruktion namens EU.

Mehr hier.

Try and Run Germany Like the EU

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If Germany were run like the EU, some of its Federal States would be in a calamitous state as suffered by Greece. The hypocritical pro-EU-Germans have no qualms about fiscal transfers within Germany that as "Europeans" they deny Greece.

Here is why you cannot run the EU like Germany, or like the USA for that matter:

America is a nation, Europe is not. 

America is bound by a shared culture within many cultures, a common language, within many languages, and a common identification. 

Europe is none of those things. 

This is why the American states are willing to rely on the federal government for transfers when calamity arises. 

This is why Germany has overseen the destruction of Greece and refuses any ‘reforms’ that would allow permanent fiscal transfers from some ‘federal’ body to one Member State or another. 

And the democratically-elected government in Greece behaves like a rabid neoliberal attack dog on its own people as it gains power under the banner of Socialism. 

This is why, in the face of obvious evidence that nations such as Italy and France are plunging into states of social instability, the European Commission still enforces (unequally) rigid fiscal rules that prevent the democratically-elected Member States from advancing prosperity, and, rather, enforce a pernicious austerity that impinge disproportionately on the most disadvantaged and then seep up to undermine the middle classes. 

This is why the Gilets jaunes have become a reality. They want their nation back from the technocrats who only see ratios, rules and conformity.

The source.

Kalecki on High Wages — High Employment, Low Wages — Low Employment

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Why has economics split up into microeconomics and macroeconomics. Because it was discovered that what is true for an element, even all elements, of a system may not be true for the system. The need for a field of study separate from microeconomics became clear in the face of fallacies of composition such as these two:

The paradox of thrift: If I save a lot, I will become more wealthy. If everyone saves a lot, all will become less wealthy. For aggregate demand will sink, companies will sell less, have poorer prospects, reduce investment and employment. Everyone's income is lower; there is less money to be saved. 

The paradox of high wages leading to high employment: If everyone including wage earners have a higher income, more will be spent, companies sell more, invest more, employ more at higher wages — if part of the growth in productivity is passed on to wage earners whose higher propensity to spent (than the very rich) helps boost aggregate (effective) demand. 

Writes Ramanan:

… a wage rise showing an increase in the power of the trade unions leads-contrary to the precepts of classical economics-to an increase in employment. Conversely, a fall in wages showing a weakening in their bargaining power leads to a decline in employment. The weakness of trade unions in a depression manifested in permitting wage cuts contributes to the deepening of unemployment rather than to relieving it. 

– Michal Kalecki, 1971 in Class Struggle And The Distribution Of National Income, in Collected Works Of Michal Kalecki, Volume II. Capitalism: Economic Dynamics, 

Truth Made in Germany (2)

 

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Make sure to read the entire piece:

"We are concerned that the leadership of Der Spiegel encourages this form of reporting and that the reporters appear to deliver what the leadership wants," wrote Grenell, who accused the paper of anti-American bias, and said the German paper "routinely included information and stories which could have been proven untrue if they had checked the facts with the Embassy first."

Read also Truth Made in Germany (1).

Marxism — Another Economic Theory Bites the Dust

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As we have seen or will see, Classical Economics, Neoclassical Economics and Austrian Economics turn out to be theories that fail to adequately describe and explain the capitalist economy. Marxism joins them in the dustbin, as can be gathered from the below summary of Marx's errors:

We can run through the problems and failed predictions of Marxism as follows:

(1) Marx’s labour theory of value is false. The a priori argument for the labour theory of value in volume 1 of Marx’s Capital is a non sequitur and later contradicts itself, as detailed here and here. There are devastating problems with the very concept of a homogeneous unit of abstract, socially necessary labour time and serious empirical problems with the theory, as I show here. The very concept, as Marx defines it, cannot be accepted or defended as coherent or meaningful, and is contrary to the empirical evidence. The labour theory does not explain price determination (for how most prices are actually determined, see here), and the theory of price determination in volume 3 of Capital is inconsistent with that in volume 1. See here. 

(2) the tendency to monopoly has its limits even in capitalism, and the extreme and increasing degree of monopoly as predicted by Marx goes well beyond anything observed in real world capitalism; 

(3) the size of the working class eventually stabilised and society was swelled by a growing and prosperous middle class and social mobility. Unemployment rates in capitalism are simply a cyclical result of the business cycle: even in the 19th century, unemployment rates did not grow and grow in the long run, as Marx’s theory predicts, but normally simply moved around a point somewhat above full employment, as John Maynard Keynes pointed out:

“our actual experience … [sc. is] that we oscillate, avoiding the gravest extremes of fluctuation in employment and in prices in both directions, round an intermediate position appreciably below full employment and appreciably above the minimum employment a decline below which would endanger life.”  

Keynes, J. M. 1936. General Theory of Employment, Interest, and Money , Chapter 18.
https://www.marxists.org/reference/subject/economics/keynes/general-theory/ch18.htm

(4) Marx thought that the large industrial reserve army is a necessary consequence and necessary condition of capitalism, but this is incorrect. In the Keynesian era of full employment, there was very low unemployment and indeed labour scarcity in the advanced capitalist world, but capitalism continued and thrived – indeed we now call it the “Golden Age” of capitalism.

(5) the long-run tendency of capitalism, even in the 19th century, was to massively increase the real wage, which has soared above subsistence level, even for workers (see here and here).

(6) the growing real wage and rising disposable income even of workers in capitalism also allowed a massive capacity for production of new commodities and new opportunities for employment (e.g., especially in services and middle class employment), which in turn has helped to overcome technological unemployment.

(7) Marx’s claim that machines, generally speaking, are an unmitigated evil in capitalism whose primary effect is to increase the intensity and speed of work by labourers is an outrageous falsehood – a perversion of history and reality. In reality, machines have, generally speaking, tended to decrease the intensity, difficulty and monotony of human labour and often reduced to human labour to lighter work of visual inspection and overseeing of machine work, not physical labour. On this, see here and here. Advanced capitalist nations have also virtually eliminated child labour as well, and in our time have tended to pay women the same hourly wage for the same type of work as men.

(8) highly developed and advanced Western capitalist states like Britain and the US proved the most resistant to communism and Marxism (contrary to Marx’s theory), and when communist revolutions broke out it was in backward Russia and China. Even the communist outbreaks in Germany and Italy at the end of the First World War were more the result of the collapse of those nations under the strain of war, and not in line with the vision Marx had predicted (as I noted here).

In the Keynesian era of full employment from 1946 to 1973, mixed economy capitalism produced a golden age.
 
Of course, since the 1970s we have entered a disastrous and regressive era of Neoliberal economics, but, even so, the consequences of that Neoliberalism are not in line with all of the predictions of Marxism as listed above.

The end of the Keynesian period and the return to revived neoclassical theories from the 1970s brought with it a return to lower growth, higher unemployment, stagnating real wages, and higher income inequality, but, above all, a transnational globalised neoliberal capitalism which has shipped a great deal of Western manufacturing and jobs to the Third World, and allowed legal and illegal Third World mass immigration into the West to lower wage costs, displace native workers and even replace populations.

Make sure to read the entire post and also this intriguing article

Michael Heinrich on the Tendency of the Profit Rate to Fall and Engels’ Dubious Editing of Marx 

suggesting

... that there is not even any coherent, well-developed theory in Marx’s published writings of capitalist crises, or what would now be called business cycle theory ... 

that Marx’s law of the tendency of the profit rate to fall in the long run is both logically flawed and empirically suspect, and he is right ... 

[that Engels] ... mistakenly suggested to readers that Marx thought that all capitalist crises were the result of the tendency of the profit rate to fall, this has caused a gross misunderstanding of Marx’s views ... 

that ... Marx’s mature crisis theory starts to look very much like a Keynesian explanation, with the emphasis on aggregate demand, banking, money and credit cycles.

Does Democracy Have a Comeback Chance?

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I have replied to these comments as follows:

cheepchepcopy, 

Thanks for your comment, I agree with your proposition that "powers around the world are moving towards managed democracies. It would be nice if everywhere was democratic ..."

I also agree with Nick, who writes in 

https://peofdev.wordpress.com/2018/11/29/exorbitant-privilege-trump-the-dollar-and-global-prosperity/

"I am uncomfortable with economic policy made undemocratically by technocrats divorced from politics, which is likely to lead to a potentially dangerous disaffection with the system once things go wrong.”

Nick's misgivings are justified, but I can also see the positive: Nick is not alone in his desire for more meaningful democracy. 

I think the abuse of democracy can have the effect of strengthening forces stressing the foundational character of genuine political competition in our civilisation. 

In the era of political correctness, political activists are trying to push through "self-evident" political desiderata and behave - if not even argue - as if pluralism and political competition (notably democracy) were annoying obstacles in the way of absolutely required TINA-goals that leave no place for dissent and alternatives - like the catastrophic anthropogenic global warming (CAGW-) hysteria, which is the ultimate trick by which activists try to circumvent democratic control. As anti-democratic projects like CAGW or the EU increasingly fail, genuine democrats are likely to gain in standing. 

Truth Made in Germany (1)

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„Wir haben keine Erfahrung mehr im Umgang mit wirklichen Ernstfällen. Das führt dazu, dass wir Katastrophen geradezu lustvoll herbeiphantasieren. Zum Beispiel die Klimakatastrophe, die ich für ein erstaunliches Phänomen massenhafter Verblendung halte”.

"We no longer have experience in dealing with real emergencies. This leads us to fantasize about catastrophes. For example, the climate catastrophe, which I consider an amazing phenomenon of mass delusion."

And the Lügenpresse is thriving on it. 

I do not expect Germans to complain much about being lied to by DER SPIEGEL. 

They are being lied to by the Media including the very popular state broadcasters every day on a massive scale. There are ample opportunities for the German public to discover that these media outlets are lying, serving as propaganda outlets of the government and the dominant political parties. 

Germans are less concerned with truth than with a good yarn based on a simple story that can be conveniently repeated to ensure one if culturally accepted by one's fellow citizens.

What should be the subject of critical discussion and vibrant dissent has been turned in Germany into unassailable dogma to be regurgitated in the manner of a social convention.

Germans repeat state ordained lies as a matter of social acceptability. 

More on how Germans willfully give up their inclination to think critically and  make themselves eager speaking trumpets of their masters in politics and the state:

Subservience Rushing Ahead of the Command - Vorauseilender Gehorsam

and

From the Pages of an Infallible Newspaper

How do you say "good morning" in German? "Guten Morgen". Correct. 

Is there another way of saying"good morning", or "hello", for that matter?

Yes: "Trump ist ein Arschloch." ("Trump is an asshole.")

A German who says that can expect to be considered a jolly good fellow by his peers, even by complete strangers. You say this to be liked. It is not the result of careful examination — one is being relieved from this job by the media.

I left this comment here:

You would think, the alarmist crowd would use their ample resources to avoid CO2-emitting mega events, utilising and even innovating online-capabilities instead. 

But the hordes of believers are overwhelming, their self-reenforicng "credo" ("I believe") is an unstoppable impetus in its own right. They are beyond the discipline of facts, having lost their capacity for rational self-control. 

I like the quote from the Bamberg sociology professor - however, I do not like the fact that no source is given. 

One of the many things I like about NoTricksZone is the accuracy with which sources are quoted. 

Thanks for the excellent translation.

The source.

Continued here.

Milton Friedman on Keynes, Intellectuals, and Private vs Public

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I have recently published the below video on Keynes' work and life. I had meant to make a number of remarks on the interview by Milton Friedman contained in it:

I.

His earlier remark (time marks 49:58 to 50:54) that Keynes was a child of the 1930s in that he occupied himself with the scourge of unemployment rather than inflation is a little odd, for unemployment was the great issue of the time, Keynes's analysis of the calamity is of the form of a general theory, i. e. just as relevant today as in his time, and, in fact, a much needed extension of classical and neoclassic economics both of which are lacking the notion of involuntary unemployment suggesting instead a self-regulating mechanism supposedly preventing involuntary unemployment that Keynes showed not to be working. 

Also, as Friedman expressly reminds us contradicting his insinuation that Keynes supposedly neglected inflation in favour of unemployment, Keynes was very much aware of the problems of inflation, while his General Theory does not represent an obstacle to avoiding or countering inflationary developments.

By contrast, Friedman's monetarism has ended up empirically refuted, as every central bank will acknowledge today. 

By contrast, Keynes' position that money is not neutral but the linchpin of "a monetary production economy" — an economy  whose real variables are decisively influenced by money — is recognised as pivotal by contemporary central banks.

II.

As for Milton Friedman's remarks between time marks 57:04 to 58:33, I have two things to remark:

Milton Friedman is one of many intellectuals of enormous political influence who condemn the enormous political influence of intellectuals (of a persuasion opposed to his).

Friedman comes up with the conservative-libertarian topos of public (bad) versus private (good), government (bad) versus private activities (good), cooperative voluntary and voluntary cooperation of individuals (good) versus collective compulsion  (bad).

There is no such categorical good and bad, to begin with. Private activities can have very bad consequences, while clearly certain forms of collectively organised action is exceedingly positive for the individual and their interaction within a community. Yes, the opposite is also true in many cases but this does not justify slanting the entire complex issue in one direction.

It may appear a more subtle consideration but it is nonetheless a fundamental and important one that  on a number of levels there simply is no sharp juxtaposition between public and private but a wholesome blending.

The modern conception of the private individual and her rights and actions is a category enclosed within notions of the public. It is not the opposite or counterpart of concepts of the public, but a set of nodes (of concepts describing private features) that interact with other such nodes (describing public features).

The modern private person is a public phenomenon on account of the fact that rights that used to be the privilege of a small subsection of the population are nowadays extended to every citizen, notably the right to participate in politics and the state and in the competition for (qualified and contestable as opposed to total) social and political dominance.

The private person is the person who is invited and welcome to make her contribution to the public discourse and the decisions derived from it. This is true both for issues that may concern only a small number of parties (say, two contesting parties) or the entire population. In principle, every public issue is open to challenge or discursive participation by a human being in her private capacity. And every private issue can be made subject of public deliberation. In both cases, of course, there are important procedural rules and limits designed to avoid inappropriate preponderance of the public impact on private concerns (e. g. erosion of individual rights) or an inordinate private impact on public concerns (e. g. monopoly issues).

In addition, especially when people interact with one another — as they do when participating in market activities —, there is no such thing as a purely private activity. Social interaction (as practised in the form of economic activities) is shot through with rules and regulations both of a formal and an informal kind. People are subjecting themselves to public conventions, constantly working them out at the margin or more broadly and more fundamentally. 

It is not possible to establish a market as a purely private activity. I cannot announce "my market" in which all rules accord with my discretion. Markets are by their very nature of a public nature, a compromise between countless contributions, sometimes reflecting private aspects to a larger, sometimes to a lesser extent. Frequently, private requests will already have internalised social demands/compromises, demonstrating that the need to accommodate the requirements of fellow humans is second nature for the private individual.

Ideologically it is easier to deal with simple dichotomies, practically we need to be more differentiating than the propagandist and more willing to recognise a multitude of interests some of which are easy and others harder to reconcile.