The Washington Consensus

The Washington Consensus is a set of 10 economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury.

  1. Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
  2. Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
  3. Tax reform, broadening the tax base and adopting moderate marginal tax rates;
  4. Interest rates that are market determined and positive (but moderate) in real terms;
  5. Competitive exchange rates;
  6. Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
  7. Liberalization of inward foreign direct investment;
  8. Privatization of state enterprises;
  9. Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
  10. Legal security for property rights.
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Understanding Socialist Motivations

I must confess that, despite studying socialists, leftists, and Democrats for a long time, I still don’t really understand them. What’s particularly revealing about socialists is their certainty, energy, and commitment to doing something that, to me, makes no sense and is certain to fail. But for the socialists, the consequences seem opaque and of little matter, probably because something else seems to be driving them. However, it is clear that the emotional and intellectual drivers of socialism are so widespread that they must have some fundamental and thus understandable basis. This essay will enumerate and explore what these psychological causes might be.

So to start out, it has been observed — by the late Charles Krauthammer I believe — that conservatives think that liberals and socialists are dim, but liberals and socialists think conservatives are evil. This observation resonates with the timeless philosophical distinction between facts and values, which is also described as ‘is’s and ‘ought’s. That is, liberal think the world ought to work the way they think it should work, while conservatives are more comfortable dealing with the world as they find it, or as it is. In Course 17, Kilo deals in the world that, in his opinion, aught to be, while Oscar deals, or at least tries to deal, with the world as it is. 

This classical cleavage leads to several other distinctions. First, that between immaturity and maturity, or as William Blake put it, innocence and experience. If we consider the socialist oughts to be immature and the conservatives to be comparatively mature, that would help to explain the aforementioned asymmetric anger. That is, the mature have been immature, so there’s a certain amount of understanding and sympathy, but the immature have not been mature, which helps to explain socialist anger.

The immaturity also helps to explain the parasitism of socialists. They have, over the past several decades, learned to place their dependent supporters where they and their families can vote for leftist parties whether they are called Democrats, Labour, or something else. Humans are unique in that their children take decades to become mature, and that timeframe keeps extending. During this period, they are not expected to earn their own keep or make their own  way in the world, so they must, by necessity, live off others. Conservatives believe this should take place in a family relationship, but institutionalizing welfare means that professional bureaucrats distribute wealth, and the more of a nation’s wealth they distribute, the more power they have, and bureaucrats live for power. 

Another systemic resonance centers on media and technology, which leads to selective reporting and exposure. That is, some stories sell, while other stories don’t, so the media have an inherent incentive to report a certain type of story. Socialism is one of those stories, and to be specific, let’s focus on Marx’s description, “from each according to their ability, and to each according to their need.” While this has an inherent “ought” feeling of equality and social justice, the world is a complex place and the implementation of Marx’s policy seems to result in severely negative consequences. The detail of this policy argument will be left for another time, but for now, it’s enough to say that the media has a socialist bias. In the 60s and 70s, Marshall McLuhan said, “the media is the message.” Tom Wolfe wondered, “What if he’s right?” Decades later, it appears that he was right insofar as the media leans left. 

This would all be fine if the socialist enterprise resulted in beneficial consequences, but it doesn’t. Selective reporting and exposure results in information reduction and simplification. The social and natural environments, as well as their interaction, are in contrast, complex. Consequently, the media’s reporting biases result in an impoverished understanding that results in problems, including environmental degradation. Recently Camille Paglia observed that the Marxist worldview is severely constricted and cannot incorporate nor comprehend the complexity of the natural world, indicating that the roots of global environmental degradation rest in an overly narrow philosophical perspective, which presents an opportunity for philosophy, policy, and complexity modeling.

Tree and its fruits

One of the great philosophical antipathies is between Christianity and Marxism, socialism, communism, globalism, or whatever new word they concoct to camouflage their revolutionary enterprise. When I was studying at MIT’s Course 17, I read an essay on democracy by Professor Kilo that was doubtless based on his Ivy League dissertation. Kilo was held in high esteem by the department, and I was impressed by his Ivy League pedigree, so I was looking forward to reading his work. I was sorely disappointed because what he had done was merely substitute the word “democracy” for “socialism.” And another Kilo “innovation” was instead of having experts make decisions about the things in which they are expert, like investment decisions, Kilo proposed instead having people vote on those decisions because that would “increase justice” by being “more fair.”

At the time I reasoned that this would increase the power of the media who would format and transmit the information voters would use to make the decisions. From a post-Obama presidency perspective, we see now that the so-called impartial media are in fact Democrat-Marxist operatives, like George Stephanopoulos who pretends to be an ABC News journalist but who in fact was an inside member of the Clinton administration. Rather than pointing out the obvious political issues, I made the more subtle argument that if Hayek’s critique of command and control economies was true — that central committees could never control an economy because they could never collect and process enough price information — then that same critique would apply to Kilo’s proposed democracy policy because the media would never be able to adequately format and transmit enough  information to inform voters adequately.

This seemed to be a pretty obvious argument, so I figured Kilo must have thought this through and was interested to hear his reply and reasoning. Kilo said he couldn’t believe I wrote this, gave the paper an F, and shouted me down when I tried to explain my reasoning saying, “Your paper meant nothing! NOTHING!” As William Shakespeare wrote in Hamlet, “The lady protests too much, methinks,” but of course, instead Queen Gertrude, I refer to Professor Kilo. In retrospect, it was obvious that my reasoning was correct and Kilo had no response. He had committed his career to articulating and selling this repackaged socialism, so allowing my argument to stand was clearly unacceptable. Moreover, Kilo had the support of his Ivy League colleagues, who were collectively committed to selling repackaged and camouflaged socialism to an unsuspecting, too trusting, and altogether too trusting American people.

The question then becomes, why is it so important for a professor to censor a student,  which is related to the question of why is it so important for socialists to censor Christians? The answer concerns differential micro-incentives. For political science professors, they’ve committed their lives to the profession and study of politics, and socialism represents that pinnacle of politics. That is, what matters is choosing sides and imposing your will on others, regardless of facts, reality, complexity, and nature. From the socialist point of view, facts, reality, and nature are not something to be studied and understood, they are something to be ignored and overcome because they — the socialist in-group — are the primary beneficiaries of socialism. That commitment as it turns out, overrides all other information and evidence, which helps to explain the ongoing appeal of socialism. Even though socialism fails everywhere and always — Venezuela and Sweden are only its most recent cautionary implementations (with the Soviet Union being the most historically significant) — the political entrepreneur’s desire for power, wealth, and status overrides all else.  The problem is, for the people about whom the socialists purportedly care, they receive crime, poverty, and death, which is a problem. Socialists time and again have proven that there is nothing easier to get used to than another’s pain.

The real problem however is that socialists make all these claims to sell their socialism because it’s good for them, but the consequences never work out in the long-term. Selling however requires describing all the beneficial consequences of what is being sold — in this case socialism — which for socialists is getting harder and harder as the number of failures grows and grows. Rather than play by the rules and defend the consequences of their policy prescriptions, socialists have opted instead for attacking the opposition. An especially useful  tactic  is one recommended by the Chicago community organizer Saul Alinsky, who recommends attacking the opposition for the strategies and activities that you yourself are doing on a regular basis. Christian Americans, who naively assume that socialists play by the rules and tell the truth, are mystified by these attacks and respond that they have no idea what the socialists are talking about, which may be true but is ineffective in the court of public opinion.

Christians are often criticized by socialists generally and Marxists specifically for being unscientific. However, Christians explicitly embrace tracking and basing one’s decisions on the long-term consequences of one’s actions. Note that policy analysis, unlike science, is explicitly real-world, multi-variate, and long-term, whereas science relies on short-term experiments crafted by scientists that isolate the interactions among a carefully constrained number of variables. So central is this focus on facts, reality, complexity, and nature to Christianity that it it mentioned three times in the four Gospels in terms of the tree and its fruits:

From Matthew 7:15–20 (KJV):

“Beware of false prophets, which come to you in sheep’s clothing, but inwardly they are ravening wolves. Ye shall know them by their fruits. Do men gather grapes of thorns, or figs of thistles? Even so every good tree bringeth forth good fruit; but a corrupt tree bringeth forth evil fruit. A good tree cannot bring forth evil fruit, neither can a corrupt tree bring forth good fruit. Every tree that bringeth not forth good fruit is hewn down, and cast into the fire. Wherefore by their fruits ye shall know them.”

From Luke 6:43-45 (KJV):

“For a good tree bringeth not forth corrupt fruit; neither doth a corrupt tree bring forth good fruit. For every tree is known by his own fruit. For of thorns men do not gather figs, nor of a bramble bush gather they grapes. A good man out of the good treasure of his heart bringeth forth that which is good; and an evil man out of the evil treasure of his heart bringeth forth that which is evil: for of the abundance of the heart his mouth speaketh.”

John 15:5,8 NIV

“I am the vine; you are the branches. If you remain in me and I in you, you will bear much fruit; apart from me you can do nothing. This is to my Father’s glory, that you bear much fruit, showing yourselves to be my disciples.

The parable of the tree and its fruits is anathema to socialists because their policies result in crime, poverty, and death, and no political movements wants to be known by those consequences.

 

Oscar and Kilo: complexity and scientism

I’ve been writing about two of my political science professors, Oscar, who’s an old school, smart and intellectually honest guy, and Kilo, who’s a new school, a not-so-smart and intellectually dishonest Marxist and social justice warrior. I’ve been watching two documentaries by David Malone, Dangerous Knowledge (DK, BBC 2007) and High Anxieties: The mathematics of chaos (HA, BBC 2008), both of which concern the philosophical consequences of mathematics. DK concerns the lives of four mathematicians who delved into the heart of infinity. Malone’s insight is that beneath the surface of the world, are the rules of science, but beneath them are a far deeper set of rules. Cantor, Boltzman, Gödel, and Turing had fundamental insights into these deeper set of rules, but while they had successful careers, these insights ultimately killed them through insanity, suicide, self-starvation, and suicide respectively. Mathematician and computer scientist Gregory Chaitin observed, accurately appears, that their theories are dangerous because not only were they disquieting but at any minute they could bite you.

Reviewing the careers of the DK four (so to speak), reveals a slightly deeper dynamic, a political dynamic if you will in which they undertook their studies with a sense of expectation of and ambition for reward if they were brilliant and correct, and they were, but the rewards never came. Instead, for Cantor, Boltzman, and Turing came criticism and rebuke, and for Gödel, who was rewarded with a position at the Institute for Advanced Studies in Princeton, madness. The question then becomes, what is it about their ideas that caused such problems? Chaitin says that such ideas are inherently self-contradictory, that the scientific community wants power and certainty, but ideas about limitless infinity, ideas that undercut the power and certainty of science — well, they’re not going to endear one to their colleagues even if they are true, perhaps even, especially if they are true.

Malone’s HA tells a similar story about the consequences of chaos theory. While several mathematicians are introduced including Laplace, Lyapunov, and Lorenz (and Leibniz), for the purposes of this essay Poincaré is most relevant. Newton argued for a rational universe in which his celestial calculations showed the orderly movements of the heavens. However, Newton’s calculations were limited to predicting the relative motion of two bodies. More problematic were the calculations of three bodies — that is, the three body problem — in which, Poincaré showed prediction became increasingly difficult and, after a while, impossible. Lorenz later “rediscovered” sensitivity to initial conditions through the help of modern computers. The point is, as has been argued, deeper understanding does does not always lead to greater power and prediction — it can lead to greater realization of humanities limitations which, while true, doesn’t exactly sell.

That appears to be at the center of the dynamic between Oscar and Kilo: Oscar was both more correct and brilliant than Kilo, but in today’s academy, that didn’t matter as Kilo’s lazy scientism is more politically successful.

 

 

Talking With Oscar

I remember one day going into the office of my advisor, Oscar, at the department of Course 17, political science, because I heard that Kilo was talking to the other faculty and them that I was too problematic, troubled, and argumentative to be a PhD student. Oscar’s office was filled with books, and by filled, I mean that there were four walls in his office, and each one had floor to ceiling bookshelves filled with books. His desk sat in the middle of these books, and on it were papers and even more books. The danger in having Oscar as a thesis advisor was that you were in danger of becoming like him and you would never finished reading. If you came to him with a question, you would come away with 4 new perspectives and 8 suggested books to read about those perspectives. Outside of Oscar’s office was a box he had built to hold his working papers, only some of which had been  published, so he would give you a couple of those as well and send you on your way. I referred to the experience as, “Being confused at a higher level.”This is great if you’re trying to learn everything but can be problematic if you’re trying to complete a thesis and, you know, graduate, but I was up for a challenge.

This day I went in and asked him directly, “Am I going to be admitted into the PhD program?”

Oscar replied, “I wouldn’t count on it.”

I said, “But why? You’re recommending me right?”

Oscar said, “Yes, I am.”

I said, “And traditionally tenured faculty get to work with the students they want right?”

Oscar said, “Usually, yes, but not in this case.”

I said, “I don’t understand.”

Oscar said, “It’s not wholly my decision, and you’ve upset the people whose decision it is. I can recommend you, and I can argue for you, but that’s all. So I recommend making other arrangements in case it doesn’t work out. I’m sorry. I can’t say any more.”

Oscar couldn’t say any more, but then again, he didn’t need to say any more, and the situation was probably embarrassing to him. He was seen within the department as an older professor whose time had passed by, who was no longer central to decision making and direction setting of the department. Kilo, who I had upset, was central to both of those things, and Oscar was intelligent and realistic enough to know that he didn’t have enough influence to overcome his objections. I thanked Oscar for his support and time and left, more than a little dejected.

The way  Kilo went about it was just so underhanded and indirect. He wouldn’t talk about our disagreement, he shouted me down when I brought it up, and now he was spreading rumors behind my back. As an engineer, I suppose I should not have been surprised that politic science was political, but this situation helps to clarify what “political” means, and to do this, we take an MIT Course 6, electrical engineering and computer science perspective. People’s views on particular subjects can be described by frames, a term from MIT artificial intelligence professor Marvin Minsky that describes cognitive shorthand ways the brain looks at complex topics. Frames are necessary due to the complexity of the real world and the limited ability of the brain to make sense of that complexity, what is called bounded rationality. These frames can be shared among groups of people, and the frames themselves can define those groups. Moreover, people who hold different frames come into conflict and one frame seeks dominance over the other. Politics is the competition among groups for power, and that competition — at least withing the department — was driven by frames.

When I showed up at the department, I though competition among frames was what you did. When I criticized Kilo’s democratic socialism frame with my Hayek-based complexity frame, I thought I was just writing a paper and making an argument for a grade in a class. I didn’t realize how serious the frame competition was, how carefully I needed to watch my step, and what the consequences were if I transgressed an invisible and unspoken boundary. Such old fashioned grading criteria as “clarity of argument,” “logic of argument,” or “truth of argument” no longer seemed to matter — it was now a matter of one group versus the other, and I was on the less powerful side. The subtitle to William F. Buckley’s famous God and Man at Yale is perhaps somewhat less famous though perhaps it should not be: “The superstitions of ‘Academic Freedom’.” I was about to find out why Buckley included that subtitle, up close, first hand, and personal.

 

Dan Brown _Origin_

Somebody gave be the book Origin by Dan Brown because she thought it would be my kind of thing because I’m kind of engineering, scientific, literary, and artificial intelligence (AI)-esque. I’ve heard of Dan Brown for years from the Da Vinci Code, which I heard was quite popular. I also heard Dan wrote a scene that featured an airborne anti-matter bomb explosion, which is, as my father used to say, something you don’t see every day.

But I never read or saw the Da Vinci Code, and I never read or saw the anti-matter bomb explosion, so I figured, “Hey! Why not?” Why not read a Dan Brown book? Well it only took me a couple of pages to figure out why not because the book was driving me crazy! It featured this scientist/futurist, Edmond Kirsch, who was a billionaire, brilliant, and lover of art, who studied with a professor, Robert Langdon, who was the best. Kirsch is about to release this amazing secret at an even more amazing museum, the Guggenheim Bilbao in Spain. And who is helping Kirsch to plan this amazing night at the Bilbao where the amazing secret, “Where do we come from? Where are we going?” gets revealed? Nobody less than the amazing, intelligent, and beautiful TV personality and future queen of Spain.

It’s kind of hard to take it because the characters and plot points all seem so — oh I don’t know — improbable. But that’s not really the problem because there’s always a certain suspension of belief because reality is boring. The real problem is more the over-confidence in technology, modernity, and science and the outright antipathy for tradition, monarchy, and religion. This guy Kirsch is a militant atheist and his insight is just about to save the world, but he gets murdered by a religious assassin trying to prevent this amazing discovery. The first half of the book was pretty hard to take because there was so little nuance and subtlety.

First, let’s talk about the religion versus science argument, which in my opinion is just ignorant and cries out for a refresh in light of recent discoveries about chaos and complexity. For a book written in 2017, Brown seems remarkably uninformed about that. Let’s be specific here. Scientists, when they create and perform their experiments, simplify and structure reality, reduce the number of variables, and strive for reproducible results. However, life in the real world isn’t like that. The real world is complex and there are lots of variables, which greatly hinders reproducible results. This is the world of religion, articulating rules to live by that have stood the test of time. Science and scientists however, are more than a little overconfident and could use a little more humility because their findings and recommendations when they get outside of their narrow specialties haven’t been that great either.

Second, there’s the matter of the science itself that gets built up throughout the book and revealed towards the end, which I found to be not quite as amazing as advertised, but I did learn a few things. Regarding the question, “Where did we come from?” Brown refers to the Miller-Urey experiment, which I learned about on Cosmos and always thought was pretty smart. Basically, Mill-Urey took some organic compounds the mimicked conditions on the early, pre-life earth, added energy in the form of a spark, and investigated what compounds resulted. Performed initially in 1952, a wealth of organic compounds such as amino acids were created. What I didn’t know was that recently, in 2007, the experiment was revisited and with better techniques, many more compounds were created, which is semi-unsurprising. It was a smart experiment that seems to merit further investigation. I also learned that McMaster University in Hamilton, Ontario — near Toronto — has an  Origins Institute that asks these kinds of big questions. Brown’s plot falls apart a little more regarding the question, “Where are we going?” Which depends on computer simulation to make accurate predictions. Last I checked, the 3-body problem has been solved, so that part is just suspect. That said, I just checked out a few papers on the physics of billiards breaks and could waste quite a bit of time there. There’s also a technological optimism riff that way past its sell-by date.

Third, I am forced to give Dan a break in that the latter half of the book is actually pretty good because an AI intelligence Winston engages in some fairly odd and innovative behaviors that help to reveal a bit more nuance in the characters than I was expecting early on. Not sure if Winston’s personality quirks are enough to make up for the militant atheism, but towards the end it was an enjoyable read. Why am I surprised though because there’s a reason Dan Brown sold so many books. I’d like to find out how intentional this narrative arc — from simplistic to nuanced — was intentional.

Alexis, Fox, and Juliet

The last semester, with all its Kilo weirdness, was over, and while I knew I was “in trouble” because Kilo was an influential professor, I knew there was nothing else to do but keep moving forward, and the task at hand at the beginning of each semester concerned picking out classes. I already had three — international relations seminar, American politics seminar, and complex system simulation — but I was looking for a fourth. I sat in on a class, “20th Century European Labor Movements” I think it was, and the professor was so arrogant and condescending I thought I was going to scream. Also in attendance was an MIT classmate, Juliet. She was from Poland, and while she was blonde, pretty, and crackerjack smart — she was in the PhD program while I was only in the master’s program, she was on full scholarship, and she had also been accepted to Stanford. Being from Poland though, Jules was also a strident anti-communist and a bit of a handful. As we were walking out of class together, I told her that I was looking for one more class and was surprised that she was there given her antipathy towards communism. She laughed and said she just wanted to attend one class to see how bad the professor and syllabus were. She had no intention of taking that class and was going to take a seminar on Alexis de Tocqueville with Prof. Fox at Harvard. She suggested that I should take the class with her.

Before going to MIT, I had been watching Bill Moyer’s television program World of Ideas in which he interviewed notable intellectuals, and about every other guest referred to Tocqueville. Also, since I was almost certain to get thrown out by Kilo, I may as well take one class at Harvard just so I could say I did. Besides, Tocqueville’s most famous work was Democracy in America, so I thought it would provide a nice historical contrast to the democratic socialism of Kilo. Fox’s class was meeting the next day, so I planned to meet Jules at Harvard, only two T-stops (what they call the subway in Cambridge/MIT) from MIT.

The next day I got off at the Harvard T-stop and walked through Harvard yard to get to the seminar, which in some ways was anti-climactic because it was just a room with some tables, students, and a professor. However, Fox wasn’t just any professor, he was a legend — soft-spoken and as smart as they come. So for twelve weeks, we did nothing but read Tocqueville and then talk about him once a week, which for me was gloriously intellectual, indulgent, and actually taught me a couple of things.

First, democracy is, in itself, problematic. Tocqueville came to America to study its “conservative” revolution, its separation from England that did not involve anything like France’s “terror” that featured Robespierre, Jacobins, the guillotine, and mass murder. Tocqueville argued that democracy did increase equality but was antithetical to excellence, which was more the domain of aristocracy. Tocqueville was both an aristocrat and intellectually excellent, so that was his perspective.

Second, Tocqueville pointed out that democracy is not the way of the world — it is, instead, the exception. It is hard for Americans to understand this because they’re literally surrounded by democracy, so they don’t know anything different. But most of the world is different — a lot different, and by different, I mean hierarchical and authoritarian. Recall that in Tocqueville’s France, the French revolution was replaced by one of the most famous authoritarians of all time, Napoleon. Tocqueville was writing in the aftermath of that chaos and destruction, and visited America in the 1830s, which gave him a certain perspective.

Third, and perhaps most important to me is the nature of Tocqueville’s perspective, which is to that it was a real-world perspective and that human intelligence, properly applied, can make the world is comprehensible. Many academics are cloistered away on their campuses, which are beautiful and enjoyable, but they are also insulated and removed from the real world. Tocqueville, in contrast, took some paper, some pens, and his intelligence and traveled, observed, thought, and wrote. The result was a remarkable work that has stood the test of time. One of my favorite grad school questions is, “Is Tocqueville a philosopher?” The assumption is that philosophers — and in this case, political philosophers — simplify the world and work in an intellectual space of abstract ideas. Tocqueville instead took on the full complexity of the world and helped to make it more abstract through his informed descriptions.

I was still fairly inexperienced in the ways of philosophy, only a masters student. However Juliet was much more experienced, a PhD student on full scholarship. Moreover, she was fierce in a way I admired, having come from Poland just as the Soviet Union was failing and communism was losing its grip on her home country. My understanding of Marxism, communism, socialism, or democrat socialism — call it what you will — was still fairly rudimentary. However, her family had lived through all the real-world politics that Poland, both the German Nazis and the Russian communists, which was quite the education. Juliet was a bit intense, but she did the work, was intelligent, and had a deep faith in the goodness of America.

In that way, Juliet was somewhat like Tocqueville himself — coming to America with an almost too-deep appreciation of the complexity and terrors of the old world to learn what it is about America that makes it different, and if one could be so bold, better. America had helped Poland during the time of the Soviet occupation in many ways, but perhaps the most significant way was by serving as a hope for something better, a hope for truth, a hope for an escape from Soviet communism, and she had made it! Juliet had made it to America and was taking classes at two of the best schools in the world — Harvard and MIT — en route to earning an MIT degree. Or at least, that was the plan.