It’s the ides of May, almost. What’s this?

• I’m writing mostly at a “drafts blog” these days.

• I publish occasional roundups, with excerpts of that writing here. This post will be a roundup of March and April posts.

  • There are already two May drafts. I am always running behind.

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Excerpts from March and April drafts, in reverse chronological order, follow.

I didn’t get a lot of feedback on the approval voting post, which I think is important.

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From Out of the spotlight (2024-04-27):

Don’t #FreePalestine.

#ShackleIsrael.

What these two political communities require is restraint. Coercion. Subjection, until they reform themselves mutually into a political community that would enforce the rights of all residents of the territory they must share, and find ways to undo the damage they have done to themselves and one another and the world.

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From The quality of what is coordinated (2024-04-26):

Our impulse when something is malfunctioning is to subject it to more intensive supervision and control. Often that is a mistake. It renders the thing we are correcting more constrained and more brittle than it otherwise might have been. If in fact the supposed malfunction was adaptive given the circumstances of the thing, and those circumstances remain unchanged, then imposing greater constraint will leave it seeking to malfunction in the same way, just able to do so less effectively. The thing is left crippled, rather than functional.

A better solution is to change the circumstances under which the malfunction was adaptive.

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From Of dentistry and democracy (2024-04-22):

A core function of our state is to pool resources and purchase public goods, like knowledge about the effectiveness of medical treatments. It is not a problem if an effective treatment is out-of-patent. It is a blessing. It means the treatment can be made available inexpensively. If it would have been worthwhile for the holder of a freshly minted patent to conduct trials, that means the social value of the treatment is much greater than the expenses FDA demands. We don’t need to rip our hair out that there is no patent-holder to make this investment. We have a state.

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From Seeing like a CEO (2024-04-14):

The key fact to note about Harry Stonecipher is not that he was influenced by Jack Welch. It’s that he was, for the first time in the firm’s history, an outside hire… he had no access to, no visibility into, no way to monitor, judge, understand, or discipline the je ne sais quoi that made Boeing work.

In order to do his job, Stonecipher undertook to rationalize and simplify and render legible the firm. Lacking access to “soft information” that could only come from developing relationships within Boeing over years of collaboration, he sought to manage the firm on the basis of “objective” so-called hard information. Among the most salient hard information in any business enterprise is cash flows, so the sway of “bean counters” was elevated automatically. Among the least legible information in a firm, to an outsider, is the quality of employee judgment calls, so internal expertise was demoted.

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From Indirection and the character of capitalism (Part II) (2024-04-11):

Berle and Means famously grappled with the separation of ownership and control inherent in modern corporations. In a public company, the controlling interest is really management and the Board of Directors, even though in principle the “owners” of the firm are shareholders. How do we prevent the managers of the firm, who are present and effectively control it, from putting their own interests before those of dispersed, distant, disorganized, passive, shareholders?

Indirection turns that logic on its head. With indirection, owners remain distant, but they are organized, unified and active. Instead of protecting owners from managers, the struggle becomes to protect productive business units and the broad public from the predations of owners whose competitive strategy is to accumulate and exploit market power and political influence.

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From Indirection and the character of capitalism (Part I) (2024-04-04):

Perhaps what initially was a small firm with its own factory is purchased by a regional supplier which is purchased by a national firm which is purchased by a private equity firm.

With every level of indirection, the controlling interest grows informationally more distant from the technology of production. It remains capable of affecting the core production process via only the same single lever. Squeeze.

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From How to understand approval voting (2024-03-28):

Selecting multiple candidates under approval voting is an act of generosity. You have selected your first choice, but then you add a candidate that is someone else’s first choice, that is lesser from your perspective, and put that candidate on an equal basis to your own. The more candidates you select, the less you are insisting “my way or the highway”. You are supporting your way, but you are also assenting to other ways that are not yours, but you can live with… [M]ultiple selectors are generous voters. They are voters looking to find bridges and overlaps between their own preferences and those of other factions. And in what would be a close election if everybody chose only their fave — or under the current system — it is these generous voters, willing to make common cause with people whose values and interests differ somewhat from their own, who become kingmakers.

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From Why does wage compression underwhelm? (2024-03-25):

[E]conomically sophisticated commentators miss something…obvious, which is that constant nominal wages at a constant price level feel to an individual worker very different from getting a 4% raise that fully covers 4% inflation… [W]orkers…experience raises as rewards, as the fruit of their personal merit. If a worker is given a big raise, she usually doesn’t attribute it to macroeconomic circumstances, but to her own hard work and savvy.

If a worker earns a constant nominal salary at a constant price level, she just never got a raise. But if a person gets a 4% raise and the price level rises by 4%, her experience is she earned a 4% raise through sweat and skill and staying late, ginning up the nerve to ask, demanding, holding firm. But then Joe Biden came along and took it away from her with his inflation.

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From A simple theory of the stock market (2024-03-20):

[V]aluation independent “investment” into “diversified equities” as a black-box asset class…enjoys a great deal of elite-intellectual and policy support. It is what good upstanding prosperous professionals are told they are supposed to do with their savings. Once upon a time, equity investing was understood to be a high information, potentially quite dangerous activity that a relatively small fraction of the public would engage in. Now, among prosperous professionals, failing to be long equities is a mark of laziness, stupidity, or some form of financial dissidence. Being invested in equities “blindly” — by which I mean without picking stocks or using valuation to time exposure — is what conventional, smart, politically enfranchised people do.

Inevitably, a policy apparatus evolves to stabilize whatever conventional, smart, politically enfranchised people do. Post-crisis, the Obama administration openly gauged the quality of the plans it would have Tim Geithner announce by the reaction of the stock market in the days following. Trump crowed about his stock market and autographed ascending charts that he thought he could take credit for. There has long been perceived to be a “Fed put“. Economists like Roger Farmer have made stabilizing an ascending equity price path ever more acceptable in policy circles…

Disproportonately enfranchised affluent professionals — call them the “top 30%” — are equity holders who have come to rely upon high equity returns regardless of the timing or valuation of their purchases. Equities fluctuate, sometimes wildly, but the most enfranchised citizens now expect an upward ratchet over a five to ten year horizon. Speculators’ own self-fulfilling behavior joins forces with tacit but determined state support to deliver on that expectation.

This entry was posted on Tuesday, May 14th, 2024 at 10:26 am PDT.
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