Sunday, May 19, 2013

Doing the Right Thing and Making a lot of money

In game theory and real life, one is presented with moral choices that initially seem amoral. One can pursue games that are "win win", "win lose" or one can be forced to chose between various kinds of "lose lose" games. Few people choose lose lose games, but we are often stuck with them against our will. All games involve a set of resources (or the loss of resources for loss/loss) and choices about how to distribute those resources.

When economists talk about such principles as "comparative advantage" -- they are positing a win/win game -- in which all the stakeholders gain value. Some more than others, but all win. In this case, people in Bolivia part with refined chemicals from a plant that isn't much use elsewise, and gain currency to buy food and clothing. And the people buying those chemicals get a drug that helps them endure pain and get dental work done; Win/Win. When the games are win win, no one is intruding on other's property or using power to oppress others. The lines are clear and the exchanges are voluntary and transparent.

In a win/lose game the loser gains no resources and often loses existing resources. Gambling is such a game. The "stake" can and will be lost and those who win do so at the expense of the many who lose. When we talk about banks gambling with our money it's because they've turned the financial markets into a casino. Only it's a rigged casino where 99% of us lose; and even when they roll the dice and lose, they manage to make us pay.

Games are setup by governors. There is no free market without government. When the cons try to sell you that the "Free Market should decide" they are simply baiting you with a ridiculous argument and then switching to the reality; "We should set the rules to guarantee you will lose in the market we set up and run." Even Ancient markets had government. When the Bible, Koran or other ancient documents talks about some person being so valued by a town that they had him "sit in the gate" it meant that he was put there to judge disputes in the market and enforce fair market rules. A free market with no rules can't exist. The rules are usually either created by insiders, or by governments that acknowledge other stakeholders. Without a just government markets are ruled by extrajudicial judges and insider organizations. If those organizations are outlawed, they will be created secretly. Adam Smith alluded to this when he said that "there is no gathering of merchants that doesn't involve some effort to" fix markets. Free Markets are only possible on conditions of individual freedom, commonwealth government, and justice. In a rigged market the game is win/lose, never win/win.

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Unfortunately the reality of monopoly and Mafioso Capitalism is win/lose. And it is a rigged win lose. Workers are prevented, prohibited, and inhibited from representation, while our business hierarchies form hierarchies and conglomerates. 150 years of institutional memory is burned or locked away while we hear propaganda that somehow if we give all our power to these hierarchies and con artists we'll all be better off. Of course it is a con. Of course it is a lie. Our Grandparents and great-grandparents went through these lies before and many of them lost their shirts, their houses, their families and their lives thanks to rigged capitalism, frauds and swindles in the past. Many of our ancestors came here seeking economic opportunity and fleeing for their lives from economic dispossession by aristocrats who'd converted their private rule to an excuse to dispossess our peasant ancestors. And because of the instability and anger caused by the injustices of the aristocrats, some of them followed their victims overseas to escape the wrath of the French and other Revolutions that followed. And of course, before there were revolutions, was often displaced into anger at Jews, religious dissenters and other minorities instead. Our ancestors mostly fled economic injustice. Some of our relatives fought that injustice with more or less success in Scandinavia, but less elsewhere.

War and injustice are either zero sum or negative games, but they are win/lose games. Two entire countries may be destroyed by war, but the aristocrats (or even worse wannabe aristocrats) involved, who win the war, will get promoted. War is also a way to deflect anger from financial swindles and oppression. Folks don't feel so oppressed when they can be instigated to hate blacks or jews, Arabs or hispanics -- so the swindlers call themselves "conservatives" rather than admit to their cons and enlist their victims anger to their cause. It's no accident that the most victimized parts of the USA are dominated by the swindlers in this country. The con involves convincing people that "Their" aristocrats are really beneficient and that the win/lose games are really win/win in the long run -- which is a lie.

I guess it was the ability to stay out of the instigated wars in Europe that enabled the Scandinavians to identify and deal with their real enemies -- their own wealthy friends and relatives. They instituted work place democracy, forced people to have a say in the markets and workplaces, and had the sense not to buy the self serving propaganda of wannabe and real aristocrats -- and created "social democracy" that is also robust in the realm of markets and capitalism. We can do it too.

The one thing that the Ayn Rand/Austrian, Fascist and Bolshevic wannabe aristocrats agreed on was a disdain for the real proletariat and the common people. If we want to create a stable society then we need a justice of opportunity and an equality in access to markets and their products that is "middle class" by design. There will always be aristocrats, but aristocrats have to operate under win/win rules or they are oppressors and tyrants. Making a lot of money is good, but doing the right thing means that everyone wins. For 30+ year we've all been innovating and increasing our productivity -- but the benefits have gone to cons and scam artists who call themselves conservatives but are really radical redistributionists and regressives playing "win lose" games or even "lose/lose" games where they manage to win anyway. It's called "casino capitalism" because it is rigged worse than a casino. And it's got to stop and our democratic features be restored to our Democratic Republic.

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