A Few Observations on Oil and Alcohol

Basic economics shows that we will never run out of oil. As we use up the supply of oil, the price will go up. This will make it more economical to locate and drill harder-to-reach reserves. Higher oil prices will also result in the creation of alternatives, as it will be worth looking for and developing those alternatives. Over longer periods of time, as oil gets used up and the price of oil goes up in response to supply, less oil will be used, and more alternatives will be created, until we are completely converted to the alternatives — sometime before we ever use up all the oil. There will eventually be a price where nobody cares to get any of the oil, and what is left will stay there. Thus, we will never, ever run out of oil. It’s basic economic principles. There will be alternatives.

The car, for example, is an alternative to the horse. A plane is an alternative to either one. A computer is an alternative to the abacus, to pen and paper, etc. During the bronze age, who would have thought of iron as an alternative? The microwave is an alternative to fire. Petroleum, when whale oil became expensive due to a shortage of whales, became an alternative. Some of these pre-existed. Some were invented later.

An alternative in the economic sense is not necessarily something that replaces another object exactly. When we run out of oil, it will become more economically feasible to come up with alternatives — many of which, like so many things in the past — haven’t even been thought of yet.

I have no doubt that it will happen, because it has always happened. Always.

Now one may object that all the alternatives to oil have, so far, been inferior. But just because they have been inferior so far, that doesn’t mean they will continue to be. Many falsely assume that the price of oil will remain constant, meaning people will continue to use it as the same rate, until it runs out, and that nobody will have any incentive to find alternatives. But, again, as the price of oil goes up as supply goes down, it will be economically viable to find better alternatives. What we are getting now is government-subsidized alternatives — so we shouldn’t be surprised at what we are getting. Things will change when market pressures create an actual demand for real alternatives. These new ways of doing things won’t be done with government — unless there is the coincidence of creating a bomb whose power source can also be used for energy production (i.e., nuclear power). I’d rather the market find a solution than to have the government bomb its way into one.

And this brings me to government-subsidized alcohol. Is it really a good idea to turn our food into fuel? That just seems like a bad substitute right on the face of it. One could argue that it’s also a bad idea to wash cars, since that uses up water we could be drinking, but we need to beware of false analogies. There is much, much, much more water than there is corn. If we wash our cars, it doesn’t raise the price of water enough not to drink it. But the rise in the price of corn that has already occurred has resulted in problems in Mexico with availability of corn for tortillas, driving up the price of a main staple there — among some of the poorest people. Further, it has driven up the price of meat, because corn is a food for chicken, pigs, and cows. When the price of feed goes up, the price of meat goes up. This, again, hurts the poor far more than any other group.

So, again, it is incredibly stupid to use food to fuel. And it hurt the poor. But that just means that ethanol is just another thing liberals have latched on to that causes harm to the poor. When your every economic policy harms the poor, one begins to wonder why you want so bad to make their lives worse.

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A Few Thoughts on Economics

In order to have a living complex system, which means that grows at an exponential rate, you have to have a few attributes. 1) You have to have a sufficient density of entities in the system; 2) they have to be able to interact freely to create rules that allow for complex interactions; 3) there must be a hierarchy of complex subsystems within the system as a whole that are themselves capable of freely creating their own rules of behavior. All of which means that 4) there must be a reduction of top-down control, meaning a reduction of dominance of one particular subsystem in the system as a whole.

An understanding of how one gets the creation of complex systems with emergent properties of behavior (Adam Smith’s “Invisible Hand”) would go a long way to helping one to understand growth in general, and economic growth in particular.

I’ve noticed in conversations with people that economic thinking is counter-intuitive, but if you can get the person to actually listen to the explanation, they end up with no choice but to agree with you. We seem to have evolved to understand the world in ways that are counter-intuitive to both quantum physics and economics. The former for reasons of dealing with macroscopic reality; the latter for reasons of having evolved in small social groups. Truly economic systems evolved only in the last few thousand years, and we have not had time to evolve to them. Economic systems are complex systems with emergent properties, and we do not always fully understand such systems on an intuitive level. However, people can be educated to understand the nature of complex systems in general, and economic systems in particular — and that is what we really need to work to do. Precisely because, though correct, economic thinking is counter-intuitive.

Zero Sum Games

In a free economy everyone has the opportunity to get better because the economy is a non-zero-sum game.

Most people in developing nations would rather be poor in the U.S. than middle classed in their own countries. And it’s because the working poor have it better off here than do most people (except the ruling elite, of course) in developing nations.

Certainly the U.S. isn’t perfect, and it doesn’t have as free an economy as it could and should have, but its relative freedom allows for a positive-sum economy that makes it possible for all boats to rise. I don’t particularly care if other boats rise faster, either, as that sort of “fairness,” or egalitarianism, only pushes the economy toward increasing zero-sumness.

The point is, in a free economy, I am not hurt in any way, shape, or form if there are others who have more than I do, because they are not taking anything from me in a positive sum game. Their wealth does not impoverish me. To complain about someone else’s wealth is like complaining about someone else being ethical, as though their being good somehow prevented me from being good. The first attitude resulted in the gulag, and the second attitude resulted in the attacks by the Islamic terrorists on 9-11.

The bottom line is that the belief in a zero-sum world has resulted in a lot of deaths, and will continue to do so until we recognize that the world isn’t a zero-sum game, and never has been, and never will be.

Yes, the Social Sciences Are Sciences

There are many who do not think the social sciences—including economics—should be considered to be sciences. They do so for a variety of reasons.

One objection I keep seeing is that because you cannot make accurate predictions within the social sciences, they cannot be sciences. By this logic, biology isn’t a science, either, because you cannot make predictions in biology. Some of the earliest work in genetics fooled many people into believing you could, but it turns out that 1:1 gene:expression is extremely rare. Mendel lucked out with his peas. Most traits are expressed in rather complex ways, within the context of the other genes, epigenetic effects, and the environment. This generally renders prediction impossible.

Another similar objection is that the social sciences are too complex to understand. But the presence of complexity doesn’t mean understanding is impossible. It is possible to discover patterns and emergent laws in a complex system. In economics, we have discovered the law of supply and demand. It’s always and everywhere true—all other things held constant. The fact that different contexts will affect the degree of elasticity or overwhelm the effect or require major digging down to see how it applies in no way means supply and demand isn’t a law of economics. Complexity actually requires the emergence of laws for there to be complexity. Otherwise, you don’t have complexity, you simply have randomness.

Too many others simply reject the social sciences as sciences because the discoveries don’t fit their ideologies. In this they are like those creationists who reject evolution as science (declaring as “merely a theory”). Just because you want to increase the minimum wage because you think it’s “fair” to do so, that doesn’t mean that the economic law of supply and demand is bunk. If you increase the minimum wage, you will increase unemployment (again, everything else being held constant).

Just because the social sciences aren’t simple like physic and chemistry, that doesn’t mean they’re not sciences. They are sciences. They are complexity sciences. And in many ways, chemistry and physics are only recently starting to catch up and describe many of their processes in similar ways. Does the unpredictablility of the weather over the long term mean meteorology isn’t a science? It would be foolish to claim so. Meteorology is a complexity science. Because it deals with a relatively small number of variables and known laws, we have a fairly high level of predictability. But even so, the weather person can be off even the next day.

We have to get our minds around the fact that there are complexity sciences out there. When we study them, we are trying to work out their emergent laws. The fact that the processes we are studying are complex doesn’t mean they don’t have laws. That’s an important point to understand. Those laws do exist, and those laws interact with each other to create emergent patterns of behavior. In other words, precise predictions are impossible in complex systems, but pattern predictions most certainly are not. We have to get past our demands for absolute, clear, black-or-white answers and embrace instead strange attractor, edge-of-order-and-chaos, ambiguous answers. Because those answers are also true.

Unstable Stabilities and Stable Instabilities in Government and Economy

The only stable political or economic systems are unstable ones. Conversely, the most unstable political and economic systems are those designed to be most stable. A paradox? Only if we accept a view of the world wherein order begets order, and disorder begets disorder -– a linear, rationalist, Newtonian world since disproved by complexity theory.

Complexity theory shows that growing systems are nonlinear systems that exist on the borderlands between order and disorder. Complete order –- and complete disorder –- are both definitions of being dead. A salt crystal is an example of complete order –- a gas in a closed container at a constant temperature and pressure is an example of complete disorder. Living things exist on the edge of order and disorder, the realm of chaos, wherein lies the principle of growth. Living things are systems, and systems have order and disorder –- the heart is a system (that makes up part of the circulatory system, which makes up part of the organismal system) that can have neither completely orderly beats, nor completely random beats, but must have beats that are mostly orderly, with some disorder, which means the beats are fractal. Cell membranes are orderly and disorderly -– they are liquid crystals, fluid yet solid, as the proteins and phospholipids slip past each other. All living things live on the principle of growth, live in the realm of order and disorder, live lives far from equilibrium.

If the principle of growth and stability for life is in the nonlinear, far-from-equilibrium realm between order and disorder, this would also be the principle of growth and stability for systems of living things as well, including superorganismal systems such as ecosystems, economies, and governments. Indeed, studies of ecosystems show they are not stable –- at some sort of equilibrium –- but are in fact always in flux, always changing, in time. And the way they change follow power laws – with many small changes, a few medium-sized changes, and very few large changes, as we see in avalanches of sand when we pile sand up one grain at a time. They are systems that are far-from-equilibrium, always growing, in a state of orderly disorder – disorderly order. If something were to happen to make any given ecosystem stop changing – which is to say, stop growing – that ecosystem would die off. Ecosystems are stable only so long as they are constantly in flux, constantly changing. Thus, they cease being the ecosystem they are within the next moment, forever changing –- deserts move in and recede, forests expand and recede, grasslands too expand and recede. Meandering rivers cut off oxbow lakes where new kinds of fish evolve -– to be introduced to the river when the meandering river merges again with the oxbow lake. There the new fish compete with the other fish in the river, pushing some to evolve, others to go extinct, others into other habitats. They change as the river changes, flowing into new species with the flow of time and the flow of the very river in which they live.

A stable government is thus an unstable government. Any government that constantly changes -– every two or four or six years, in towns, counties, states, and nations -– is a government that is stabilized by this instability. Who is in charge in such a government as that found in the United States?

The President, who is there four or eight years at most?

The Congress, made up of two Houses in conflict with each other, whose members could be there only two or six years, but who may be there any number of years from two years to two decades?

The Court system, which can overturn even what these two branches of government pass?

Or how about the states, which are given (according to the Constitution, even if this is not true in practice anymore) all the power not explicitly given to the federal government?

Or is it the people, who elect and defeat people who run for office at the town/city, county, state, and federal levels?

All of them, and none.

The system is kept destabilized by the very process of election -– stabilized by varying degrees of continuity (two and four and six or more years, as the case may be). There are power laws of continuity that prevent power from existing in one set of hands for long, if at all. The most stable political systems are indeed those based on the principles of power laws –- many people have most of the power and have the most cumulative effect, middle-sized entities have less power and less cumulative effect, and the federal government has the least power of all, and the least effect on us.

Do you not like what the President does? He is gone in four years (if he is too bad, in less, with impeachment). Do you like him too much? Too bad – we cannot reelect him more than once. We have prevented ourselves from electing our own dictators. And if the President tries to take on too much, to take too much power, the Congress will block him, refuse to pass what he wants. And if the Congress tries to take on too much, to take too much power, the President will veto them. And if they both agree to too much, the Supreme Court can refuse to let it remain law. We have them fight each other, trying to take power from each other, so they cannot harm the people, who prosper and grow. But the people only prosper and grow so long as the government is in a state of stable instability – as is found in republican (not democratic, where the power is placed in the hands of one group – and we get the tyranny of the majority) governments. Stable governments are based on power law distributions of power.

Stable governments create instability –- dictators create instability in their own countries, among their own people, let alone among the peoples in other countries. Often this is done precisely to create the stability inherently missing in dictatorial governments. Whether the dictator is ideological or nonideological, the results are the same –- they try to prevent change (change means a change from their rule, after all), which stagnates, creating equilibrium – which is to say, death. We have seen the cultures of death, the governments of death, in Hitler’s Nazi Germany, in the series of dictators in the Soviet Union, in Pol Pot’s Cambodia, in Pinochet’s Chile (though there is something to recommend in his economic policies), in Saddam Hussein’s Iraq, in the dictatorship of minority rule in South Africa during Apartheid, and in and with the various kings and queens throughout history. They attempt to override and overcome natural power laws through the use of force -– many large avalanches are created through the use of a smashing fist. The democratic republics of the West and increasingly throughout the rest of the world have not always had the cleanest of hands –- but those hands were only spotted with blood compared to other times and other countries where dictatorships (no matter what the name) ruled, when rulers’ hands dripped with blood. While France, for example, has not had the best of reputations in the twentieth century in its former colonies, especially as they pulled out of them, at least the French people have been safe from the French government –- something that was not the case under their kings, the government of the Terror, or under Napoleon. Only as France has become more and more politically destabilized in their having now a representative government –- and are even more destabilized by becoming part of the European Union –- has France become safe for the French people. Thus has France become increasingly stable.

Economies too work on the same principle as ecosystems and government –- the connection between economy and ecosystem should be readily apparent in the common root of the two words. Economies that are designed to be stable –- the planned economies of socialist and communist governments, and even the over-regulated economies under interventionism and Keynesianism –- are themselves highly unstable.

Socialist countries around the world had and have high levels of unemployment.

Communist countries starved their citizens because they could not produce enough food, or properly distribute it –- during the 1980’s the Soviet Union had to spend 25% of its GDP on the military to keep up with the Unites States spending only 2% of its GDP on the military.

Welfare states slow economic growth in order to support the unemployed – those made unemployed by the slow growth created by the welfare state.

Subsidies keep unprofitable businesses around at the expense of the profitable businesses – Britain famously subsidized looms when the textile industry became automated, keeping unprofitable looms around at the expense of the textile industries, which could have caused the economy to boom even more than it did, absorbing all of those temporarily displaced by the economic changes (and those who are displaced by change are always only temporarily displaced, for the growing economy rapidly takes them in).

Every instance of a government anywhere trying to control the country’s economy has resulted in at best slow growth, at worst starvation and complete economic collapse. Any attempt to make an economy remain at equilibrium has had the same result: death.

The principles of a growing economy are the same as the principles of growth of ecosystems, organisms, and everything else in the universe –- the economy must be on the edge of order and disorder, in the far-from-equilibrium state where growth occurs. Growth must be based on power law distributions. The economy must be allowed to be unstable so that it may be stable –- stable enough to grow and adapt and change over time. It must have the rules of voluntary cooperation for it to have life (the imposition of force – which is what governments do –- brings entropy-as-equilibrium to the system, making it act no longer as a system), for it to grow and to produce and reproduce, to create, recreate, and procreate –- for these are the elements of growth.

Economies, like ecosystems and organisms, must be heterarchies –- both hierarchical and decentralized, full of nonlinear feedback loops. No one can control an economy any more than any one cell controls an organism (and, when one cell tries to take over an organism, it is called cancer – which results in the death of the organism). Even the brain dies without a working heart or liver. Yet, there is a hierarchy at work to create a living organism. The same is true too of economies –- which are constituted not only of individuals, but, in a power law distribution, of families making decisions together, and each church making decisions as a church, communities making decisions as communities, companies and corporations making decisions as companies and corporations, and even governments making decisions as governments (though it is best when their decisions are to remain out of the economy as much as possible, since they are more apt to try to control it than participate in it –- the only possible exceptions being doing things like building roads, which are more difficult to do privately, though one should note how, in a power law distribution, it is local governments that build and maintain more roads than do state governments, which build and maintain more roads than does the federal government, and which should all be done using only the “user fee” known as gasoline taxes, which I would argue should also only be used for roads).

In such an economy, it is not the individual, the family, or the various groups and entities that are in charge of the economy –- in fact, no one is in charge, or even for the most part has much of an effect on the economy as a whole, any more than does any individual member of Congress. Yet each individual and entity is necessary –- and an individual or entity can have a large influence on the economy, with the introduction of a new technology, etc. Two bicycle mechanics had a massive influence on the world’s economy when they invented the airplane –- yet think too of all the other bicycle mechanics who simply repaired bicycles, making tiny contributions to the economy that were, as part of the accumulation of economic activity, important, but only minimally important. But such innovations by bicycle mechanics could not be planned or directed by central command –- they arose because they were part of a system that, because it existed at a far-from-equilibrium state, could be influenced by butterfly effects. Only in such an economy could a pair of butterflies like the Wright brothers truly take flight.

If we want to truly have stable governments, societies, and economies, we have to have governments, societies, and economies that are inherently unstable, far-from-equilibrium, on the edge of order and disorder, wherein lies the principle of growth. For it is growth –- and growth itself is imbedded in time, and changes and evolves – that is the source of stability in the world. A growing organism is most stable, healthiest, most adaptable. The same is true of ecosystems, economies, and societies. When an organism, an ecosystem, an economy, or a society stops growing, it becomes unstable, unhealthy, and may even die. We know what the principle of growth now is – a growing system is a far-from-equilibrium system on the borderlands of order and disorder – meaning, we now know what we must do to have a growing economy and a stable government wherein the people are safe from that government, other governments, and even those citizens which wish to do others harm. Only to the extent than an economy and a government are both hierarchical and decentralized, and constantly changing in such a way that stability is created (by good rules, not by either ironclad laws or anarchy), can they lead to safe and prosperous societies and citizens.

Interdisciplinary Education for an Interdisciplinary World

Part of the problem with education is students do not know what relevance many topics they study have for them.

I remember throughout grade and high school that I thought math to be utterly unimportant and irrelevant to anything I was ever going to do. And throughout most of my early years I had wanted to be a scientist. How could teachers have allowed me to think that math was not important? I did not really learn math was important until I took chemistry in high school. It was only then that I truly understood fractions for the first time.

And, even though I loved to read, I thought literature pointless (it did not help that in high schools they seem to go out of their way to find the most boring literature available –- I learned how wonderful literature was in college, when we were made to read books and stories that were actually interesting). Literature had nothing to do with biology, after all, and that was what I was going to go into. This attitude is not unique to me or to high school –- it prevails in most students, and through college.

It was only later, after I had decided to pursue literature and especially after I started working on my Ph.D. that I began to see how interconnected everything was. For my dissertation, I was able to use my biology (after all, I wrote a dissertation titled Evolutionary Aesthetics), and I further discovered that it would have been a much, much, much better dissertation if I had known a great deal more math (fractal geometry and statistics in particular) and had learned to program (I actually needed to learn how to program much, much earlier than my Ph.D. dissertation, for my first attempt at grad school, but after I dropped out of my Master’s in biology, I didn’t think I needed to learn the programming I had needed to learn to finish my Master’s thesis–wrong again!).

I learned as I progressed through grad school that I actually needed many more tools from many more disciplines to do the work I wanted to do. For my dissertation, I needed to know social psychology, evolutionary psychology, sociobiology, economics, linguistics, neurobiology, molecular biology, mathematics, chaos theory and fractal geometry, programming, literature, and philosophy. And I didn’t know the math or programming I needed. I found a programmer, fortunately, but even then it would have been much better if I could have done it, and I couldn’t do the math I needed to do certain analyses to more definitively prove my thesis.

The disciplinary approach to teaching is breaking down. Students are siphoned into what they enjoy, and these same students then ignore everything else, complaining about anything that intrudes on the one thing they want to learn. This kind of hyper-specialized education is fine if all you want to produce is worker bees. But if you want creative thinkers, those who can come up with new things –- the kind of people who will make more wealth and produce more value in and for the world –- then disciplinary-only educations will not work.

What we need is a truly interdisciplinary education. We need interdisciplinary thinking, interdisciplinary classes, and interdisciplinary education. Only an interdisciplinary education will allow students to see how disciplines are interrelated. Only an interdisciplinary education will create interdisciplinary thinkers who can create more value in and for the world. We need chemists who love Bach, biologists who love Goethe, businessmen who love Aristotle. We need philosophers who love biology and business and artists who love physics and economics. Only with an interdisciplinary education will we have people who think this way, across the disciplines, through the disciplines, complexifying their thought so new things can be thought. What would the world be like if our politicians actually knew and understood the economics of Ludwig von Mises, the philosophy of Friedrich Nietzsche, the plays of Sophocles, the linguistics of Chomsky and Pinker, the novels of Kafka, chaos theory, systems theory, evolutionary theory, the poetry of William Blake, and ancient Greek history? Could interdisciplinary thinking finally give the country great statesmen instead of demagogues? Could an interdisciplinary education create more ethical businessmen, since they would understand that there is not a conflict between ethical action and profit? Imagine a businessman who knew the value of a dollar, of his workers, and of a van Gogh. Imagine what an interdisciplinary education would do for teachers. Wouldn’t it make them – teachers? How can teachers teach when they know nothing? Teachers more than anyone should be interdisciplinary. They should know and understand the reason for having an interdisciplinary education, to understand and know the connections between the disciplines, and be able to help their students understand the importance of all the disciplines for understanding any one of the disciplines.

What is interdisciplinarity? It is not multidisciplinarity, where we have just a hodgepodge. It is not having students doing writing exercises in math class, or quadratic equations in literature class. That does not show students how the disciplines are interrelated. To have an interdisciplinary education, students need to know the value of each of the disciplines, how they relate to each other, the history of the disciplines. Students do not know how modern science arose out of natural philosophy and religion. Misunderstandings of ideas such as entropy make people reject evolution on the argument that more complexity could not arise in an entropic universe, where everything is becoming more random (this is, incidentally, not quite what entropy is about). We need to teach students about systems and complexity and information, so they can see how all disciplines relate to one another. This will give students an interdisciplinary education. And they will need an interdisciplinary education if they want to have an edge in this increasingly interdisciplinary world.

3 Kinds of Human Interactions

There are three basic ways in which humans interact:

1) slavery – the interaction wherein I tell you that “unless you do something good for me, I will do something bad to you.”

2) economic cooperation (profit) – the interaction wherein I tell you that “if you do something good for me, I will do something good for you.”

3) generosity (gift-giving) – the interaction wherein I tell you that “I will do something good for you, and do not expect you to do something good for me.”

These are in what we have historically perceived to be increasing ethical order. Of course, rarely are our interactions purely one of these – nor are they perceived to be. And the interactions are oftentimes very complex. And this can get us into trouble, since 1) is always unethical. But what is happening if I am an employer, and I hire someone? Certainly this is 2), but if I hold the threat of firing the person if they do not do their job properly over them, it is perceived that the interaction is also 1). But is it? Just because I withdraw 2), it does not mean that the interaction I am having with the person is in fact 1). The worst I can do is fire the person from the job that it was mine to give him. And when he ceases to do something good for me (do a good job), then I am under no obligation to continue doing something good for him (keep him employed) under interaction 2). If I were to keep him on, it would be due to 3), which is not the purpose of a place of employment. The purpose of a place of employment is to make everyone working there profit – to make everyone there better off than they were before they entered into interaction 2).

Any time a government interferes with either interaction 2) or 3), it is interacting with people with interaction 1), and thus is acting unjustly. Only when government works to prevent others – including itself, from engaging in interaction 1) does government act justly.