Airs - Ian Lance Taylor

I really liked the film Across the Universe. It’s both amusingly clever and an interesting look back at the 60s. Plus it’s a musical. I particularly liked the combination of “nothing’s going to change our world” with “helter skelter”–simple but effective.

I tend to like movies which take a more formal approach, like musicals. By restricting themselves and avoiding naturalism, they force the story to be both good and unusual. Or, of course, terrible–that happens pretty often too, but those movies can be ignored. A completely different example of a formal film would be Memento, with its trick of telling the whole story backward.

A film about the 60s naturally makes me compare that time to today. Many people then really thought society was falling apart or changing radically. The protests were dramatic and certainly changed U.S. society, but they had no real effect on the war. The protests against the Iraq War before it started were very large, though nobody thought they would change society, and they had no effect at all. And seeing that the Iraq protests had no effect caused them to more or less stop after the war started–there are still regular protests, but they are much much smaller than the ones before the war. Of course, the lack of a draft is a key difference.

Even after all these years of war it’s so strange to see men like Bush and Cheney, who were both careful to avoid going to Vietnam, sending other men to fight in Iraq. In a movie it would be simplistic. How does it happen in real life?

We’ve gotten used to floating currency, but what does it really mean? The dollar has fallen with respect to the euro. If I want to buy something from Europe, I now have to pay more dollars than I did before, and/or the seller has to receive fewer euros. In a free market, prices should always move toward a mean governed by supply and demand. What does that mean when the buyer and seller are using different currencies?

Let’s assume the price in euros stays the same. Then the price in dollars goes up. Normally when the price goes up we would say that is because demand had gone up or supply has gone down. Neither has happened here. In fact, quite the opposite: it is likely that the higher price will cause demand to go down, and it is likely that the lower demand will cause supply to go up. Thus the likely effect is for the price in euros to go down, heading back toward some sort of equilibrium.

Of course the real world is much more complicated. Buyers will look for substitutes that they can buy in dollars instead of euros. Sellers will look for new markets. Most of us buy things only in our own currency. In that case, the only effect will be indirect, for goods which are traded across currency zones.

On average, though, the effect of a change in currency rates is to adjust the balance of trade between currency zones. In a global system, a trade imbalance means that currency is moving from one country to another. Since the currency is not directly useful in other countries, the only benefit of moving the currency is to invest it back in the original country. At some point that becomes undesirable. Then people refuse to accept the currency, so the price falls. In principle this corrects the trade imbalance. That appears to be what is happening today with the dollar. It will be interesting to see whether it goes far enough to make the U.S. a net exporter. That would be quite a significant change.

I argued earlier that we can base a universal ethics on human nature, or biology. Is there anything we could use? Many universal ethical systems are based on some form of the golden rule or the categorical imperative. That itself tends to be taken as an axiom. Utilitarianism is based on a utility function, which is an axiom.

I think one way to consider whether these ethical systems are truly universal is to consider whether they would apply to any imaginable alien race, and to consider whether they would apply to a solipsist.

We tend to assume that any given person is about as ethically valuable as any other person; we certainly don’t think it is OK to kill 100 random people to save one person’s life, though the reverse may be acceptable in some cases. For an intelligent ant, on the other hand, thousands of ants would happily die to save the queen. Do these ants violate the golden rule? It seems like they do. Utilitarianism is OK if we define the utility function appropriately, and the categorical imperative is OK.

A committed solipsist could ethically take just about any other action, since no other person exists. Is there any way to show that the solipsist is wrong in doing so? Only by showing that he or she is mistaken. These ethical theories don’t help with that, though.

An ethics based on biology does show that a solipsist is mistaken–nobody can really believe in solipsism. And such an ethics doesn’t say anything about alien races, except that they will have their own ethics.

Where does this get us? I’m not sure. I like the idea of finding some sort of grounding for ethics, but grounding it in biology gives us all the problems of evolutionary psychology: we mistake what is for what should be. How can we avoid that?

A couple of times I’ve alluded to an idea I first saw from Peter Singer, that the structure of society creates a great deal of the value which flows to the wealthy. Our legal system and our stable system of property ownership is crucial for building successful companies. Yet the value gained from companies flows largely to company management and partially to dividends to shareholders. None of goes to the operations which support the company: the courts, the police, the schools which train the workers, etc. Instead, we tax profits, and use the tax money to pay for the infrastructure.

This naturally suggests that we could arrange matters differently. Instead of using taxes to pay for the courts, companies could pay the courts directly. And likewise for other social services. This would match my understanding of how libertarians think society should work. It would bring the benefits of free competition to the court system: the best courts would get the most money.

Of course, there is an obvious so-called moral hazard: if you choose whether or not to pay the fire brigade, then if you chose not to pay, the fire brigade has a pretty strong incentive to burn down your house as an example to encourage others to pay. And if you pay the court system, then the judges have a very strong incentive to issue findings which favor whoever pays them the most.

Also, if different court systems compete, then how do you pick which court system to use when two parties in a dispute pay for different ones? While this could be negotiated, in extreme cases the winner will be the most powerful party, which will normally be the richest party.

So as far as I can tell such a system degenerates reasonably quickly into control by the wealthiest. Of course they would normally hide their power in a velvet glove, but it would be there when needed.

Is that any different than our system? I think there is a difference, which is that we can vote people out of power. Voting does not require a great deal of commitment, it just requires making a decision. So we have a way of derailing powerful people, a way which would not be available if societal infrastructure were privatized.

Of course there are many very powerful people in our society who are not elected. But even those people can be controlled by the masses, via the court system. It doesn’t happen all that often–the lawsuits which followed the stock market crash are over now–but it does happen, and it does constrain people to obey the rules to some degree.

The opposite of privatizing societal infrastructure is nationalizing private property. The U.S. does this in a very limited way via eminent domain. It has been done effectively on a larger scale in countries like South Africa. But too much privatization leads to a state socialist system like the U.S.S.R., which we could see was a disaster.

So there is some sort of balance to strike, or perhaps a third way to find, in the ideal society.