IBM plans to build the first commercially available universal quantum computer

From Fox News.com (Mar. 6):

IBM has announced a major new initiative to make universal quantum computers available commercially. IBM Q will offer up the power of quantum computation via the IBM Cloud platform, a first for the industry, and potentially a major step forward for the field.

Quantum hardware has already been made available by the likes of D-Wave, but its hardware is limited in the kinds of computation it can achieve. IBM Q marks the first time that a universal quantum computer is being offered up. A universal quantum computer is capable of tackling problems that are too large for a conventional system, so IBM Q would have many applications beyond what's possible with current technology.

IBM is pledging that universal quantum computing systems will be made available to select industry partners over the coming years. The company expects to increase the capabilities of the hardware as time goes on.  [read more]

If IBM can build the quantum computer it’s a game changer—no, it’s revolutionary. The reader might want to refer to my blog entry “New Step Towards The Quantum Computer” for more information about quantum computers.

For full disclosure, I own some IBM stock.

Five Forgotten Champions of the Total State: John Ruskin

From FEE.org:

John Ruskin (1819-1900) is inexplicably revered to this day as an aesthete, artist, and champion of small crafts, whereas in truth he was an absolute hater of commercial capitalism, laissez faire liberalism, and the modern world. A hugely influential thinker of the Victorian period, he romanticized a mythic England from the past, in which art and good taste prevailed over commercial frenzy and wealth-making. “I was, and my father was before me, a violent Tory of the old school,” he said. In his view, he completely agreed with his friend Thomas Carlyle that the forces unleashed by Adam Smith and the Scottish Enlightenment generally had destroyed the artistic sensibilities of generations, and they needed to be recaptured through a strong planning state.

His most political book is Unto This Last (1862) which took aim at the division of labor itself. Riffing off the Parable of the Vineyards, he finds it outrageous that the vineyard owner himself was in a position to decide pay at all. The merchant, wrote Ruskin, "does not know when to die."

The entire book is a long and tedious screed against merchants for their lack of loyalty, their obedience to impersonal market forces, and absence of a moral reason for existence. The merchant, he said, is “the man who does not know when to die, does not know how to live.”

Like other critics of classical political economy (he compared it to “alchemy, astrology, witchcraft”), he denied that exchange alone could produce any value or profit. “It is only in labor there can be profit,” he declared. He had a particular beef with John Stuart Mill, and critiqued his price and wage theory, showing near-zero competence in economic theory at all. For Ruskin, economics was not a science but an aesthetic. He summed up his outlook on political economy as follows: “Government and cooperation are in all things the laws of life; anarchy and competition the laws of death.” It's no wonder that Ludwig von Mises said that Ruskin was "one of the gravediggers of British freedom, civilization and prosperity."

Source: Five Forgotten Champions of the Total State.

Terrorism Part IV: ISIS Success & Expansion

There are many vicious, bloodthirsty terrorist organizations operating today in the Middle East and Africa. But now, a decade and a half into the 21st century, even the dreaded al-Qaeda, which killed 3,000 Americans on 9/11, has been somewhat supplanted in the minds of those in the West by a group called ISIS.

ISIS stands for the Islamic State of Iraq and Syria or ISIL, which stands for the Islamic State of Iraq and the Levant. To them, the Levant also includes Israel, a very important distinction. They are by far the most well-funded terror group in the history of mankind, with an annual revenue between $2-$3 billion. That would put ISIS ahead of the GDP of 31 nations on earth.

No one had ever heard the name ISIS or ISIL before 2011. ISIS began its rise in 2011, as American troops were leaving Iraq. For U.S. soldiers, the war in Iraq had come to an end. For Iraqis, the country was still extremely volatile. Yet, President Barack Obama celebrated the withdrawal and touted the now “self-governing” Iraqi government.

The very day of the announcement, the leader of Iraq — Prime Minister al-Maliki — received a message that some of his vice president’s Sunni bodyguards might be planning an uprising. He arrested the six vice presidential bodyguards the next day. The attacks on Sunnis only escalated from that time on.

Massive Sunni protests began to spring up. Although al-Qaeda had indeed been crushed by the U.S. military, the few surviving radicals banded together with the surviving members of Saddam Hussein’s Baath Party, attacking Shia Muslims and Christians by the score.

The new leader of this emerging Islamic State — Abu Bakr al-Baghdadi — sent some of these hardened terrorists to Syria to recruit and fire up the Sunni population. It worked.

Al-Baghdadi vision was much larger than simply attacking targets and killing people. He declared a caliphate, attacking and holding territory without recognizing borders. As far as he was concerned, all territory in the Middle East was now a part of this new Islamic State.

With no one to stop them, ISIL ushered in a reign of terror in northern Iraq, overrunning towns and villages and offering Christians three choices: convert to Islam, pay a tax amounting to all of their yearly income — or die. ISIL found vicious new ways to execute those who opposed them. Technologically savvy, they also distributed high production videos of their heinous crimes.

ISIL now controls an area larger than Great Britain. The vast majority of their revenue comes from oil wells seized in Iraq and Syria. Former CIA director Michael Morel once explained that the U.S. didn’t destroy ISIL’s main source of revenue because they “didn’t want to do environmental damage and . . . destroy that infrastructure.”

Men and women are being burned alive, drowned, executed and crucified in the name of radical Islam. Yet for the Obama administration, protecting the environment took precedence.

Source: Terrorism Part IV: ISIS Success & Expansion.

Islamic State thug news:

• Mar. 23: UK Prime Minister Defiant as ISIS Claims Responsibility for London Attack
• Mar. 16: Afghan officials: Islamic State kills 3 Shiite elders
• Mar. 15: Ex-Army Col.: 'Way Overdue' to Allow CIA to Drone-Strike ISIS
• Feb. 17: Car bomb in Baghdad claimed by Islamic State kills 59

Health reform: The road ahead

Commentary by Newt Gingrich on Fox News.com (Mar. 28):

Friday's decision to pull the House Republican health reform bill was not the end of health reform. In fact, it may have been the best step toward actually achieving real health care reform -- if congressional leaders learn from the experience.

The Republican congressional leadership erred because they decided to repeal and replace ObamaCare within the traditions of the pre-Trump legislative swamp.

By default, they accepted the fake scores of the Congressional Budget Office. By allowing the scores to exist, they let Democrats and the media quote "the non-partisan CBO" to their disadvantage.

Leadership applied the absurd limitations of Senate reconciliation rules to a House bill, even though it was guaranteed to frustrate their conservative members.

They established a deadline for failure – which we know is detrimental to large legislative achievements. Ronald Reagan took eight months to pass a tax cut, which was giving away money. We took 18 months to pass welfare reform, which had the support of 92 percent of Americans. Obama took eight months to pass ObamaCare – even while he promised it would cure all our health care ills.

……………….

History has taught us: America doesn’t like political health care. There is a deep imperative for Congress to think through bipartisan health care reform.

The House and Senate GOP leadership can learn a lot of lessons from this failed experiment – if they are willing to.

THE ROAD AHEAD

There are a set of principles for successful conservative reforms. President Ronald Reagan and Prime Minister Margaret Thatcher used them in the 1980s. We followed them in creating the "Contract with America" in 1994, reforming welfare in 1996 and passing the balanced budget in 1997.

As Thatcher said: "First you win the argument, then you win the vote." The best short book on her fight to reform Britain, Claire Berlinski's "There is no Alternative: Why Margaret Thatcher Matters," makes clear the moral, human arguments Thatcher used to dismantle socialism in Britain.

1. Communicate with the American people and convince them this will provide a much better future than the current system.
2. The key is to focus on health and health care, not on financing.
3. Health is the largest sector of the American economy and the most complex.
4. As the health reform plan evolves, it has to be described in very detailed question-and-answer systems online, so people can understand how it affects them, health professionals can understand how they will be impacted, the news media can understand it, and the elected officials can explain and defend it.
5. It should be possible to outline the entire new system in a series of very clear charts, so everyone can understand the goals and the directions before being asked to support the transition process. People both have to understand the long-term values-based goals and the policy changes, which will be bridges to achieve these goals.
6. Properly developed, a dynamic, innovative, science-based American health system will be the largest job creator, the largest sector of high-paying jobs, and the biggest earner of foreign exchange in the country.
7. Following a disciplined road map like this is hard work and requires more patience and more discipline than the inside Washington game. 

[read more]

A good idea not just for the healthcare bill but for any major piece of legislation. The House didn’t get a chance to read the bill and to debate it. It was more-or-less accept it or not accept it-- not to improve on it. Hannity is right Congress needs to get together and to debate and hash out a better bill. The bill should contain all the elements that President Trump campaigned on: Buying health insurance across state lines, and health saving accounts among others.

Five Forgotten Champions of the Total State: Johann Fichte

From FEE.org:

Johann Fichte (1762-1814) was the philosophical founder of German idealism, writing and teaching a generation before George Friedrich Hegel, and the first of a long line of obscurantist philosophers whose ideas somehow land with one solid political application: build a huge state led by one heroic dictator. It was he, and not Hegel, who first posited a meta-narrative of historical waves that could be characterized as thesis, antithesis, and synthesis.

In politics, he was a huge fan of Napoleon, but found himself devastated by the crushing victory of France over German territories, which motivated his “Addresses to the German Nation” (1808), the most influential lecture series on education to appear in the modern world. Here was the first complete outline of what German nationalism should look like.

The new education system should have “an absolutely new system of German national education, such as has never existed in any other nation.” The purpose is to educate a “new race of men” with a system that “must first be applied by Germans to Germans.” Its goal is to inculcate “the true and all-powerful love of fatherland, the conception of our people as an eternal people and as the security for our own eternity.”

Part of the point is to train for work so that “no article of food, clothing, etc., and, so far as this is possible, no tool is to be used, which is not produced and made” inside Germany. In other words: autarky. Germany should aspire to be “a closed commercial State” that rejects “our idolatrous veneration of coined metals.”

His template for what became fascist (right-Hegelian) thought is entirely predictable: statism, nationalism, loathing of the merchant class, and protectionism, spiced up with the inevitable doses of misogyny ("active citizenship, civic freedom and even property rights should be withheld from women, whose calling was to subject themselves utterly to the authority of their fathers and husbands”) and anti-Semitism (granting rights to Jews requires we "cut off all their heads in one night, and to set new ones on their shoulders, which should contain not a single Jewish idea”).

Source: Five Forgotten Champions of the Total State.

4 Questions to Ask When Debating Inequality

Commentary from Steven Horowitz on FEE.org:

The change in the presidency is not going to reduce the amount of time and energy people will be spending debating the question of rising inequality. In fact, I would expect to see such debates become even more frequent and more intense.

I have written a number of articles, and given many talks, on the issues surrounding the claim that inequality is getting worse. Those contain a whole variety of data (most of which can be found in this piece and this one) suggesting that most of the claims about rising income inequality are wrong, overstated, or ignore other evidence.

However, what I want to do in this piece is focus more on the questions that need to be asked in such debates. Specifically, I want to raise four questions that should be at the center of discussions of inequality.

Question One: Are we talking about inequality or poverty?

So often these two issues get confused in discussions about inequality. Those concerned about inequality frequently start talking about how bad things are for the poor. One explanation for this is that they are assuming that rising inequality must mean that the rich are getting richer and the poor are getting poorer. More specifically, some seem to think the poor are poorer because the rich are richer. That is, they assume that economies are zero-sum so that if some are richer, those riches must have come from the poor.

……………………

Question Two: Are we talking about income, wealth, or consumption inequality?

Those concerned about inequality often slide between income and wealth in these discussions. Even this well-known viral video does so. It starts by presenting data on wealth, but at several places along the way, including one extended discussion of a graphic, it refers to people’s salaries. That’s income, not wealth.

Wealth refers to the sum of our assets minus liabilities. It’s a stock. Income is a net change in our wealth in a particular period, such as when we get paid. It’s a flow. One can have high wealth, but low income, such as an older person living off savings but with a fully paid-for home. Conversely, one can have high income and low financial wealth if one has a large salary but spends it all immediately on consumption goods. The data and other issues are different depending on whether we’re talking about wealth or income. Be clear which it is.

Consumption inequality is yet a third possibility. Here we are talking about the differences between what the rich and the poor can consume.

…………………

Question Three: What about income mobility?

Those concerned about inequality often argue as if the rich who are getting richer and the poor who are getting poorer are the same people year to year. They see the claims that the top 20 percent of income earners have a greater share of national income than 30 years ago and that the bottom 20 percent have less, and they seem to think that means those who were rich are richer and those who were poor are poorer.

But this ignores the question of income mobility. Those static comparisons of two years decades apart are static portrayals of a dynamic process. What those comparisons actually say is that “those who were rich in year x got y% of national income and the different set of people who were rich in year x + 25 got z% of national income.” In other words, which households and people comprise “the rich” changes year to year, as is also true of those in bottom 20 percent.

………………………

Question Four: What exactly are the problems caused by inequality?

If you’ve clarified what everyone thinks about the first three questions, it’s worth asking exactly something like: if poverty is falling, and poor people have a decent chance to get out of poverty, what specifically is wrong with (rising) inequality?

In my experience, one common answer to this question is that even if the poor are getting richer, the even greater increase in the wealth of the rich gives them unfair access to the political process. The super-rich will turn their economic power into political power, often in ways that will redistribute resources to themselves and their friends.

That, of course, is a legitimate concern, but notice that the conversation has subtly shifted from inequality per se to the problems of cronyism and a state with enough power to engage in such redistributions. There are plenty of ways to attack cronyism and to reduce the ability of the rich to turn wealth into political power that are not about forcible redistribution away from the rich or other policy questions that arise from inequality.  [read more]

Good questions to clarify the issue.

Terrorism Part III: Al-Shabaab

Al-Shabaab is a Somalian-based, radical terrorist cell with ties to al-Qaeda in the Middle East and possibly Boko Haram in Nigeria. They believe in violent Islamic militancy and boast a troop strength of between 7,000 to 9,000 militants.

In 2006, Al-Shabaab gained control over Somalia’s capital city Mogadishu, raising the fear in Ethiopia that the group’s violence would spill over into their country. So, in December 2006, the Ethiopian military launched an offensive into Mogadishu and successfully drove Al-Shabaab out of the city. Ethiopia’s action inflamed the group, and Al-Shabaab attacked Ethiopia’s forces in central and southern Somalia, taking control of those areas. Al-Shabaab’s goal was to topple the Somalian government and replace it with Islamic rule and Sharia law.

One of Shabaab’s most infamous attacks took place in 2013 in Nairobi Kenya’s most upscale mall, which was owned at the time by Israelis. A group of Al-Shabaab terrorists stormed the mall, shooting patrons on a Saturday afternoon. At times, they asked their victims if they were Muslim. If the response was no, they were shot. In all, 67 innocent people died and 175 were wounded.

Strangely, Al-Shabaab’s radical brand of Islamic extremism has proven appealing to certain Americans. Al-Shabaab recently used a spokesman for one of their propaganda videos who sounded suspiciously American. At the end of his rhetoric, to accentuate his point, he used a clip of Donald Trump. [read more]

al-Shabaab news:

• Aug. 22, 2016: Somalia Suicide Bombings Killing 20 Claimed by al Shabaab
• July 1, 2016: Al Shabaab claims responsibility for deadly attack on Somalia hotel
• Feb. 26, 2016: Somali president: Al Shabaab attack killed nearly 200 Kenyan soldiers
• Feb. 14, 2016: Al Shabaab claims responsibility for plane explosion killing bomber
• May 15, 2015: Al-Shabaab Fighters Capture 2 Towns in Somalia
• Dec. 2, 2014: Kenya Quarry Attack by Somalia's al-Shabaab Kills 36

The Six Mysterious Elves of the Commercial Marketplace

From FEE.org:

One reason that the Brothers Grimm fairy tales have such appeal — more so than the folklore that came before — is that they deal with a world that is familiar to us, a world that was just being invented in the early 19th century, when these stories were first printed and circulated. They deal with people, scenes and events that affect what we call the middle class today, or the bourgeoisie.

This was the world that serves as the backdrop to the tales of the Brothers Grimm.

A great example of this is the very short story called “The Elves and the Shoemaker.” A cobbler and his wife worked very hard at their craft, making shoes all day. But leather was expensive, and no matter how hard they worked, they could not put their business in the black. They were selling some shoes, but they couldn’t make enough fast enough. They were getting poorer, rather than richer.

One night, the shoemaker left his cut leather out on a table and went to bed. The next morning, a fantastic pair of shoes made out of that leather awaited him. The craftsmanship was impeccable. They were of the finest style. He was able to charge a very high price to a customer who was very impressed by them. This same series of events repeated themselves again the next day and the next.

Some months later, the shoemaker and his wife were financially secure and part of the rising middle class. All their financial worries were gone, and they were comfortable and happy.

At this point, the shoemaker said to his wife: “I should like to sit up and watch tonight, that we may see who it is that comes and does my work for me.” The wife agreed, and they stayed up to watch what was happening in the night.

Why Did It Take So Long?

Now, to be sure, this turn of events strikes me as rather strange. One might think that curiosity would have caused them to examine this long before. Why didn’t they stay up after the second or third time that leather had become shoes? Why did they wait so long to investigate the cause of their prosperity?

In any case, they did stay up and look, and they found two naked elves there working away, turning scraps of leather into fine shoes. The wife thoughtfully decided to return the favor and make them tiny little clothes. When the elves found the clothes, they put them on and ran away with great delight. They never returned, but the story assures us that this was just fine because the shoe business stayed in the black. The shoemaker and his wife lived a long and prosperous life.

Poverty to Wealth

We can see in this one story an archetype of what was then a new type of middle-class success story in the framework of a commercial society. The couple went from poverty to wealth in relatively short order. This came about not because of favors from the king or the discovery of gold, much less from stealing or piracy, but purely by virtue of work and commerce, combined with the assistance of some benefactors in the night whose favors they never sought, but nonetheless came to deeply appreciate.

Apply this story in our times: We are all in the position of poor shoemakers with benefactors. In a state of nature, we would be struggling for survival as most all of humanity did from the beginning of recorded history until the late Middle Ages, when the first lights of capitalism as we know it began to appear on the horizon. Over the next several hundred years, and especially during the 19th century, life itself was transformed. The state of nature was vanquished, and the world completely re-made in the service of human well-being.

As William Bernstein summarizes the situation: “Beginning about A.D. 100, there had been improvement in human well-being, but it was so slow and unreliable that it was not noticeable during the average person’s 25-year life span. Then, not long after 1820, prosperity began flowing in an ever-increasing torrent; with each successive generation, the life of the son became observably more comfortable, informed and predictable than that of the father.”

We were born into a world of amazing prosperity that our generation did not create. We have the expectation of living to old age, but this is completely new in the sweep of history, an expectation we can only have had since about 1950. The shift in population reflects that dramatic change, too. There were most probably 250 million people alive 2,000 years ago, and it took until 1800 for the 1 billion mark to be reached. One hundred and twenty years later, that was doubled. Three billion people lived on the planet by 1960, and there are 7 billion today. Charting this out, you gain a picture of a world of stagnation and stasis from the beginning of recorded history until the Industrial Revolution, when life as we know it today was first experienced by humankind.

…………………….

Hostility to the Magic of Markets

Actually, the situation is worse than that. Many are openly hostile to the institutions and ideas that have given rise to our age of plenty. We’ve all seen the protests on television in which mobs of iPhone-carrying young people are raising their fists in anger against commercial society, capitalism and capital accumulation and demand just the type of controls, expropriation and regimentation that are guaranteed to drive us back in time to the restoration of castes, poverty and shortened lives. They are plotting to kill the elves.

In the fairy tale, there are only two elves. In the real world, scholars have discerned that there are actually six, and they go by the following names…

First, there is private property, without which there can be no control of the world around us. It would not be necessary if there were a superabundance of all things, but the reality of scarcity means that exclusive ownership is the first condition that permits us to improve the world. Collective ownership is a meaningless phrase as it pertains to scarce resources.

Second, there is exchange. So long as it is voluntary, all exchange takes place with the expectation of mutual benefit. Exchange is a step beyond gift giving because the lives of both parties are made better off by the acquisition of something new. Exchange is what makes possible the formation of exchange ratios and, in a money economy, the development of the balance sheet for calculation profit and loss. The is the foundation of economic rationality.  [read more]

The other elves are division of labor, risk-taking entrepreneurship, capital accumulation (this to the Left is a sin), and desire for a better life and the belief that it can happen if we take the right steps.

Terrorism Part II: Boko Haram

When Americans think of terrorists, they nearly always think of al-Qaeda or ISIS. But there is a group of bloodthirsty terrorists headquartered in Nigeria that have killed far more than either of those organizations: Boko Haram, which means “western education is forbidden.”

Boko Haram was founded in 2000 to overthrow the Nigerian government and usher in an Islamic state. The group frequently uses bombings, assassinations and kidnappings, with female victims being sold into sex slavery.

In 2009, Boko Haram carried out a series of attacks on police stations and other government buildings. This led to shoot-outs in the streets where hundreds of Boko Haram supporters were killed, and thousands of residents fled the city. Nigeria’s security forces eventually seized the group’s headquarters, capturing its fighters and killing their leader Mohammed Yusuf. His body was shown on state television, and the security forces declared Boko Haram finished.

However, Boko Haram simply regrouped under a new leader, Abubakar Shekau, and stepped up their insurgency. In tactics and results, the menace from Boko Haram has actually worsened. They have used children as suicide bombers, often drugging them against their will to act as explosives. One in five suicide attacks are done by children. According to UNICEF, 1.3 million children have been forced from their homes across four separate countries: Cameroon, Chad, Niger, and Nigeria.  [read more]

Boko Haram news:

• Mar. 15, 2017: Cameroon: 5,000 people freed from Boko Haram since January
• Feb. 22, 2017: Boko Haram suicide bomber kills 1 in northern Cameroon
• Jan. 20, 2017: Boko Haram attacks refugee camp in Nigeria
• Jan. 1, 2017: Nigeria Finds Chibok Girl Kidnapped by Boko Haram in 2014
• Dec. 31, 2016: Boko Haram Leader Urges Fighters: Kill, Slaughter and Abduct

Trump’s ‘Skinny’ Budget Paves Way for a Leaner Government

From The Daily Signal.com (Mar. 16):

President Donald Trump’s long-awaited skinny budget is finally here.

This slim budget reprioritizes defense spending and reverses eight years of Obama-era shifts in spending from a core constitutional priority toward the president’s domestic pet projects. Federal agencies, beware: The era of fiscal profligacy may be coming to an end, and quickly.

Trump’s first budget plays a key role in the congressional budget process. This skinny budget is only part one. It focuses on the one-third of the budget for which Congress appropriates funding every year, called “discretionary” spending.

The president will reportedly issue his first full budget in May. In addition to discretionary spending, the full budget will include mandatory spending (the so-called entitlement programs) as well as a tax plan and other policy proposals.

Cuts to discretionary spending are critical to reducing the size and scope of the government and enhancing individual and economic freedom. They also make an important down payment toward the federal deficit and debt.

Trump’s proposal would cut nondefense programs in most agencies, including the Environmental Protection Agency (31 percent), the Department of State (29 percent), and the Department of Agriculture (21 percent).

Instead of across-the-board reductions such as the ones included in the 2011 Budget Control Act, the president’s proposal includes smart cuts to “drain the swamp” by weaning special interests from feeding unfairly from the federal trough.

……………………..

Overall, Trump’s budget proposes to cut nondefense discretionary programs by $15 billion in fiscal year 2017 and by $54 billion in fiscal year 2018. The proposal also aims to increase defense spending by $25 billion in fiscal year 2017 and $54 billion in fiscal year 2018.

It is encouraging that the proposal would fully offset any increase in next year’s defense spending with cuts to domestic programs. Worrisome, however, is that this year’s defense boost would only be partially offset, increasing discretionary spending in fiscal year 2017 by $10 billion.

Trump should set a positive precedent this year by offsetting any new spending with spending cuts elsewhere.  [read more]

Good for the President! Of course, the Left will call him a “Meany” for these cuts because they “believe” he is going to make people starve, etc. What else is new. Keep on cutting Mr. President!  Hopefully the republicans in Congress will get on board with the needed cuts.

Bureaucracy Buries the Human Spirit with Paperwork

From FEE.org:

Bureaucrats have a fixation on numbers and rules. Viktor Frankl, a Holocaust survivor, describes this termination point:

The emaciated bodies of the sick were thrown on two-wheeled carts which were drawn by prisoners for many miles, often through snowstorms, to the next camp. If one of the sick men had died before the cart left, he was thrown on anyway—the list had to be correct! The list was the only thing that mattered. A man counted only because he had a prison number. One literally became a number: dead or alive—that was unimportant; the life of a “number” was completely irrelevant.

The following words represent the generally acknowledged mindset of a bureaucrat: “Rules are rules, fella. I don’t make ‘em. I just enforce ‘em.”

Rules, Lists, and Paperwork

As Ludwig von Mises has taught us, bureaucracy is not a large, hierarchically structured organization, whether of big government or big business. It is the government’s method of managing its affairs, which means it is the “peaceful” method of managing coercion. Laws of the land, a budget for each bureau, and regulatory rules dictate to citizens what they can and cannot do. Disobedience brings punishment. The method is top-down; the higher authority must be obeyed.

Business management is bottom-up, deriving its legitimacy from customer satisfaction, the only means in a free market of earning profits. Policies, not rules, are guidelines informing everyone in the company, from president to stock clerk, how to function in order to achieve optimal customer satisfaction and therefore optimal profits.

If a large, hierarchically structured business today seems bureaucratic, in the sense of being inefficient and insensitive to customers, look for the government’s demands for compliance to laws and rules. Compliance means obedience to a higher power, which consequently deflects attention from customer needs and wants. This is what makes businesses in a mixed economy take on the “rules are rules” mentality.

So why the bureaucratic indifference to people? Paperwork is the only yardstick bureaucracy has to measure its “success.” Laws and rules are commands that compel citizens to obey, and citizens usually do obey to avoid punishment. Paperwork records the compliance—but it must be correct.

The objective yardstick of a business is its bottom line, profits, which means it is successfully meeting its customer’s needs and wants.

The Bureaucratic Society

A bureaucratic society is a rule-bound society. Freedom and creativity are not valued. (Creativity, after all, means breaking rules.) The more bureaucratic the society, the more rule-bound it will become. The socialist state, therefore, is a society dominated almost entirely by laws and rules. The more laws and rules, the more total the regulation of human affairs, the less value it places on its citizens’ lives.

Total bureaucracy—the totalitarian socialist state—is dictatorship by excessive law. This describes Nazi Germany during World War II, as well as the USSR and many similar regimes in the twentieth century.

The list has to be correct because all paperwork has to be correct. William Shirer made this clear in The Rise and Fall of the Third Reich, when he described gangs of German secretaries dutifully typing orders to send Jewish people to their deaths.

Even a few members of Kerensky’s provisional Russian government, who were discovered by illiterate Bolshevik revolutionaries during the 1917 October Revolution, were compelled to write their own arrest papers. The paperwork had to be correct!

In a bureaucratic society, thought is neither required nor appreciated, only compliance. Thus, paperwork has to be correct for the lower-ranked official to avoid punishment and for the higher to justify his or her actions, by reference to a law or rule.

Concern for the person behind a bureaucratic number is minimal or non-existent. Just ask students at state-run universities what it is like to be a number on a roster. (And the rosters do have to be correct!)

………………….

For more on the relationship between bureaucracy, socialism, and dictatorship, see Mises’ 1944 book Bureaucracy. Here is his one-paragraph summary and conclusion (p. 125):

The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one a subordinate clerk in a bureau, what an alluring utopia! What a noble cause to fight for!

[read more]

The subject of the article fits nicely with Moore's Laws of Bureaucracy few of which state:

• So a typical bureaucracy with 12 levels has a 99.5 percent chance that one or more sociopaths are in each control path. The actual percentage is somewhat lower because the sensor and effector information paths often overlap.
• So the effectors, who actually deal with the public, will be totally constrained in their behavior by rigid rules. Thus, they will have no heart.

In other words, since bureaucracies don’t see people as individuals but as numbers, stats, etc. people in that bureaucracy will either be sociopaths or slowly become them. Also, according to Moore, bureaucracies are inefficient, big, growing, out-of-control, and immortal—or want to be immortal. I agree. President Trump will find this out if he hasn’t already. Draining-the-swamp will be an uphill battle. Bureaucracies don’t want to die.

If you're going to sin, sin against God, not the bureaucracy; God will forgive you but the bureaucracy won't. – Hyman Rickover.

I never saw a bureaucracy produce a single barrel of oil. - Rex Tillerson.

Government proposes, bureaucracy disposes. And the bureaucracy must dispose of government proposals by dumping them on us. - P. J. O'Rourke.

Why Non-Competes Are Anti-Competitive

From FEE.org:

Non-Compete Agreements Limit Competition

Competition is the life-blood of a free market economy. The pushes and pulls of resource supply and demand work to efficiently digest risks and opportunities in the economy.

Non-compete agreements limit competition in labor markets by artificially decreasing labor supply creating situations of sub-optimal labor use. Workers are bound to jobs, working environments, and pay levels that are unnatural to the wider economy and businesses are unable to hire the best talent to produce the best results.

Non-compete agreements vary in scope but generally are contractual agreements between an employer and an employee governing when and where an employee is allowed to work. Effective non-competes are limited in their temporal and geographic scopes with a narrow focus in what they attempt to accomplish and what knowledgeable parties they are given to.

Benefits of non-compete agreements might include the protection of trade secrets, an increased incentive to invest in worker training and education, and the protection of client and sales lists.

Decreased Worker Mobility

Workers who have signed non-compete agreements cannot test the job market to fulfill their labor potential. After signing a non-compete, workers have to either stay at their current job, not work, or transfer outside the confines of a non-compete that likely encompasses the areas they are most skilled and experienced.

Because workers can’t test the market for the most preferable jobs, they are more likely to stay at their current job and accept inferior working conditions and lower wages.

Normally in a free market, we would argue that if an employer does not pay market rates or offers bad working conditions they will be naturally pressured towards more efficient outcomes. Whether that is in raising their standards, becoming less successful as employees leave, or reshuffling who they employ. With non-competes, however, the threat of workers leaving is lowered because their alternatives are artificially limited, which decreases the market pressures on companies to improve.  [read more]

The article says: “Non-competes benefit businesses by distorting labor markets in the same way that labor unions benefit organized labor by distorting labor markets.”

Terrorism Part I: Foundations of Islamic Terrorism

Americans first suffered at the hands of Islamists in 1785. They were kidnapped and ransomed or sold into slavery. Goods were stolen from merchant ships and the ships confiscated repeatedly.

Prior to gaining its independence, America was under the protection of the British Navy in the region and didn’t have to deal with the attacks. But in 1785, Britain let it be known that the Americans were no longer their concern.

The problem became so severe that Thomas Jefferson sailed for London to meet with the ambassador from Tripoli. There he learned the pirates belief that their actions were founded on the laws of their prophet and written in their Koran. These Islamic laws stated that all nations not acknowledging their authority were sinners, and it was their right and duty to make war upon them, making slaves of all they could. And every Muslim slain in battle was sure to go to paradise.

Sound familiar?

So American administrations lapsed into a policy of appeasement*, bribing the pirates and paying an annual tribute amounting to 20 percent of the nation’s GDP — the equivalent of $760 billion today.

In 1801, President Thomas Jefferson had had enough and stopped paying the tribute, and the Pasha of Tripoli declared war on the United States. America entered her first foreign war. By 1805, the U.S. Navy had won the war and subdued the pirates into signing a treaty to end all tributes and violence against U.S. ships sailing the Mediterranean.

However, peace only lasted two years, with radical Islamists attacking American ships, signing treaties and violating those treaties, only to be stopped again by American force. This cycle went on through the presidency of James Madison, ending only with the French Invasion of Algiers in 1830.

Even America’s Founders — Washington, Jefferson and Madison — had to deal with Islamic extremists. Even they had a hard time understanding what they were up against and how to deal with it. Our Founders also learned that when the interests of nations, in their case Britain and France, don’t align with their own, terrorist activity is not only not dealt with, it’s actually encouraged.

Source: Terrorism Part I: Foundations of Islamic Terrorism.

Why would the Islamists back then attack American ships? America didn’t invade the Middle East for oil (as the Left would say). America was just minding its business. Hmmm.

*Appeasement never works. If anything it shows your enemies that you are weak—or worse a joke.

Disruptive Technology

Principles of Disruptive Technology:

1. Companies Depend on Customers and Investors for Resources. In order to survive, companies must provide customers and investors with the products, services and profits that they require. The highest performing companies, therefore, have well-developed systems for killing ideas that their customers don't want. As a result, these companies find it very difficult to invest adequate resources in disruptive technologies lower margin opportunities that their customers don't want - until their customers want them. And by then, it is too late.
2. Small Markets Don't Solve the Growth Needs of Large Companies. To maintain their share prices and create internal opportunities for their employees, successful companies need to grow. It isn't necessary that they increase their growth rates, but they must maintain them. And as they get larger, they need increasing amounts of new revenue just to maintain the same growth rate. Therefore, it becomes progressively more difficult for them to enter the newer, smaller markets that are destined to become the large markets of the future. To maintain their growth rates, they must focus on large markets.
3. Markets That Don't Exist Can't Be Analyzed. Sound market research and good planning followed by execution according to plan are the hallmarks of good
   management. But, companies whose investment processes demand quantification of market size and financial returns before they can enter a market get paralyzed when faced with disruptive technologies because they demand data on markets that don't yet exist.
4. Technology Supply May Not Equal Market Demand. Although disruptive technologies can initially be used only in small markets, they eventually become competitive in mainstream markets. This is because the pace of technological progress often exceeds the rate of improvement that mainstream customers want or can absorb. As a result, the products that are currently in the mainstream eventually will overshoot the performance that mainstream markets demand, while the disruptive technologies that underperform relative to customer expectations in the mainstream market today, may become directly competitive tomorrow. Once two
   or more products are offering adequate performance, customers will find other criteria for choosing. These criteria tend to move toward reliability, convenience and price, all of which are areas in which the newer technologies often have advantages.

Only by recognizing the dynamics of how disruptive technologies develop, can managers respond effectively to the opportunities that they present. Specifically he [Mr. Christensen] advises managers faced with disruptive technologies to:

• Give responsibility for disruptive technologies to organizations whose customers need them so that resources will flow to them.
• Set up a separate organization small enough to get excited by small gains.
• Plan for failure. Don't bet all your resources on being right the first time. Think of your initial efforts at commercializing a disruptive technology as learning opportunities. Make revisions as you gather data.
• Don't count on breakthroughs. Move ahead early and find the market for the current attributes of the technology. You will find it outside the current mainstream market. You will also find that the attributes that make disruptive technologies unattractive to mainstream markets are the attributes on which the new markets will be built.

Source: The Innovator's Dilemma. The Revolutionary Book That Will Change the Way You Do Business (1997) by Clayton M. Christensen.

Interesting book.

According to What Is.com a disruptive technology is “one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry.” For example, email transformed the way we communicating, largely displacing letter-writing and disrupting the postal and greeting card industries.

Along the same lines, Industry Week.com has an article called “Disrupt or Be Disrupted: Eight Principles of Disruptive Innovation.”

Inflation, Price Controls, and Collectivism During the French Revolution

From FEE.org:

Governments have an insatiable appetite for the wealth of their subjects. When governments find it impossible to continue raising taxes or borrowing funds, they have invariably turned to printing paper money to finance their growing expenditures. The resulting inflations have often undermined the social fabric, ruined the economy, and sometimes brought revolution and tyranny in their wake.

The political economy of the French Revolution is a tragic example of this. Before the revolution of 1789, royal France was a textbook example of mercantilism. Nothing was produced or sold, imported or exported, without government approval and regulation.

Government Extravagance and Fiscal Ruin

While the French king’s government regulated economic affairs, the royal court consumed the national wealth. Louis XVI’s personal military guard numbered 9,050 soldiers; his civilian household numbered around 4,000—30 servants were required to serve the king his dinner, four of whom had the task of filling his glass with water or wine. He also had at his service 128 musicians, 75 religious officials, 48 doctors, and 198 persons to care for his body.*

To pay for this extravagance and the numerous other expenses of the Court, as well as the foreign adventures financed by the King (such as the financial help extended to the American colonists during their war of independence from the British), the King had to rely on a peculiar tax system in which large segments of the entire population – primarily the nobility and the clergy – were exempt from all taxation, with the “lower classes” bearing the brunt of the burden.

One of the most hated of the taxes was the levy on salt. Every head of a household was required to purchase annually seven pounds of salt for each member of his family at a price fixed by the government; if he failed to consume all the salt purchased during the previous year and, therefore, attempted to buy less than the quota in the new year he was charged a special fine by the State. The punishments for smuggling and selling salt on the black market were stiff and inhumane.

As we saw, in a previous article, when Louis XVI assumed the throne in 1774, government expenditures were 399.2 million livres, with tax receipts only about 372 million livres, leaving a deficit of 27.2 million livres, or about 7 percent of spending. Loans and monetary expansion that year and in future years made up the difference.

In an attempt to put the government’s finances in order, in July 1774 the king appointed a brilliant economist, Anne-Robert-Jacques Turgot, to serve as finance minister. Turgot did all in his power to curb government spending and regulation. But every proposed reform increased the opposition from privileged groups, and the king finally dismissed him in May 1776.

Those who followed Turgot as controller-general of the French government’s finances lacked his vision or his integrity. The fiscal crisis merely grew worse and worse. As Thomas Carlyle (1795-1881) summarized it in his study of The French Revolution (1837):

“Be it ‘want of fiscal genius,’ or some far other want, there is the palpablest discrepancy between Revenue and Expenditure; a Deficit of the Revenue . . . This is the stern problem: hopeless seemingly as squaring the circle. Controller Joly de Fleury, who succeeded [Jacque] Necker, could do nothing with it; nothing but propose loans, which were tardily filled up; impose new taxes, unproductive of money; productive of clamor and discontent.

“As little could Controller d’Ormesson do, or even less; for if Joly maintained himself beyond a year and a day, d’Ormesson reckons only by the months . . . “Fatal paralysis invades the social movement; clouds of blindness or of blackness envelop us; we are breaking down then, into the black horrors of NATIONAL BANKRUPTCY?”

It was the chaos of the king’s finances that finally resulted in the Estates-General’s being called into session in early 1789, followed by the beginning of the French Revolution with the fall of the Bastille in Paris in July 1789. But the new revolutionary authorities were as extravagant in their spending as the king. Vast amounts were spent on public works to create jobs, and 17 million livres ($3.4 million) were given to the people of Paris in food subsidies.

The Ideology of the Total State over the Individual

During the Jacobin Republic of 1792–1794, a swarm of regulators spread across France imposing price ceilings and intruding into every corner of people’s lives; they imposed death sentences, confiscated wealth and property, and sent men, women, and children to prison and slave labor. In the name of the war effort, after revolutionary France came into conflict with many of its neighbors, all industries in any way related to national defense or foreign trade were placed under the direct control of the state; prices, production, and distribution of all goods by private enterprises were under government command. A huge bureaucracy emerged to manage all this, and that bureaucracy swallowed up increasing portions of the nation’s wealth.

This all followed naturally from the premises of the Jacobin mind, which under the shadow of Rousseau’s notion of the “general will” argued that the state had the duty to impose a common purpose on everyone. The individual was nothing; the state was everything. The individual became the abstraction, and the state the reality. Those who did not see the “general will” would be taught; those who resisted the teaching would be commanded; and those who resisted the commands would perish, because only “enemies of the people” would oppose the collectivist Truth.

The French Revolutionist Bertrand Barere (1755-1841) declared in 1793:

“The Republic must penetrate the souls of citizens through all the senses . . . Some owe [France] her industry, others their fortunes, some their advice, others their arms; all owe her their blood. Thus, then, all French people of both sexes and of all ages are called upon by patriotism to defend liberty . . .

Let everyone take his post in the national and military movement that is in preparation. The youth will fight; the married men will forge arms, transport baggage and artillery, and provide subsistence; women will work at the soldier’s clothing, make tents, and become nurses in the hospitals for the wounded; the children will make lint out of linen; and the old men, again performing the mission they had among the ancients, will be carried to the public squares, there to enflame the courage of the young warriors and propagate the hatred of kings and the unity of the Republic.”

All laws, customs, habits, modes of commerce, thought and language were to be uniform and the same for all. Not even the family had autonomous existence; and children? They belonged to the State. Said Barere:

“The principles that ought to guide parents are that children belong to the general family of the Republic, before they belong to particular families. The spirit of private lives must disappear when the great family calls. You are born for the Republic, and not for the pride and the despotism of families.”

Here was the birth of modern national collectivism and allegiance and obedience to the “people’s” State. In January 1793, when a messenger was sent to inform the revolutionary French forces in the east of the country, who were facing the invading armies of anti-revolutionary foreign monarchs, that the French king had been executed, one of the French officers asked, “For whom shall we fight from now on,” if not the king? The reply was, “For the nation, for the Republic.”  [read more]

So, with the kingship the people were oppressed. After the king was dethroned the people were still oppressed. So, what changed? Other than the system of gov’t of course.

*It’s good to be king.

History of Labor Unions Part IV

Labor unions brought many positive changes to America, but at a very high cost. Violence and corruption have permeated unions and, in many cases, hampered the incentive to excel. Virtually nothing can remove a paying union member from a job, regardless of performance or behavior. Additionally, Americans are denied the right to work without paying union dues.

Socialist, Marxist, communist and progressive infiltration and ideology spilled into the government due to massive and unprecedented political contributions from unions. Rampant racism kept blacks from joining and laws like the Davis-Bacon Act in 1931, further prevented non-unionized blacks and immigrant laborers from competing with unionized white workers for scarce jobs during the Depression.

Has it all been worth it? Do the victories of unions in the workplace outweigh the heavy cost? Unions had their place and time in American history, but that time may well have passed.

Source: History of Labor Unions Part IV.

The Left is pro-choice when it comes to abortion, but not when it comes to joining labor unions or even school choice among other issues. Definitely a person has no choice when it comes to the Unaffordable No-Care Act. The Left believe citizens shouldn’t have a choice because they believe the masses are too immature to make their own choices or worse they believe they are like cattle who need to be herded. In truth, the Left elitists are the ones who are immature.

Your computer's blinking LED lights are putting you at risk of hacks

By Mark Jones on Komando.com (Feb. 24):

Cybercriminals are extremely sneaky when it comes to their scams. It's hard to predict which corners of the digital world they are lurking around.

That's why researchers are always trying to figure out future attacks before they actually occur. You're not going to believe the latest proof-of-concept attack, it's almost like a scene right out of Mission Impossible.

Researchers at a university in Israel discovered this potential hack of the future. It incorporates a sneaky, data-stealing drone.

How the latest proof-of-concept hack works

That's right, for this hack to work the scammer uses a drone to help steal information. But first, the targeted computer must be infected with malware that is planted via USB drive or SD card.

I know, I know, this is a super elaborate scheme. As we said earlier it's only proof-of-concept at this time, meaning it's feasible but has yet to be implemented.

How the attack would work is, the criminal infects an "air-gapped" computer with data-stealing malware. Air-gapped means the computer is never connected to the internet. These are typically used to store sensitive information that hackers can't get to online.

Once the malware is installed on the computer, a drone is sent to spy on it. That's because computers have a small Hard Drive LED indicator that the malware uses to send sensitive data through Morse type code. The drone records the code and bam, the hacker has stolen your information.  [read more]

Scary. Basically, to avoid this attack you make sure the LED isn’t visible and be careful of inserting any USB drive and SD card that you aren’t familiar with—that’s the probably the most important caution.

Aristotle Understood the Importance of Property

From FEE.org:

While he hopes that wise policies may help to improve the conditions and actions of men, Aristotle recognizes that man possesses a human nature that cannot be molded or bent or transformed to conform to some ideal of a perfect State populated by transformed people in the way that Plato believed was in principle desirable and possible.

Aristotle and the Importance of Private Property

This idea comes out most clearly in Aristotle’s discussion of private property, and in his rejection of Plato’s call for a communist social order in which material things are held in common. Aristotle argued that if all land was owned communally with work performed jointly, there existed the potential for animosity and anger among the participants.

Why? Because then individuals would feel that they had not received what was rightly theirs since work and reward would not be strictly and tightly connected, as they are under a system of private property.

Aristotle saw property rights as an incentive mechanism. When individuals believe and feel certain that they will be permitted to keep the fruits of their own labor, they will have an inclination to apply themselves in various, productive ways, which would not be the case with common or collective ownership. Said Aristotle:

“When they till the ground together the question of ownership will give a world of trouble. If they do not share equally in enjoyments and toils, those who labor much and get little will necessarily complain of those who labor little and receive or consume much ...

“Property should be ... as a general rule, private; for when everyone has a distinct interest, men will not complain of one another and they will make progress, because everyone will be attending to his own business ...”

Break this connection between work and reward and you weaken the productive impulse, and instead plant the seeds of envy and anger among men concerning the distribution of what they have been made to produce in common.

Private Property and Human Benevolence

There was another reason that Aristotle defended the right to private property against the claims of Plato. He believed that a right to property often led to a spirit of benevolence and liberality toward others. Aristotle explained:

“How immeasurably greater is the pleasure, when a man feels a thing to be his own ... And further, there is the greatest pleasure in doing a kindness or service to friend and guests or companions, which can only be rendered when a man has private property. The advantage is lost by the excessive unification of the State.”

Aristotle seemed to think that there was a healthy balance on the issue of property in society when property was private, so as to reap the benefits from the greater productivity and work that would be forthcoming under such a system. At the same time, he believed that the fruits of property should be generously shared with others by a spirit of benevolence on the part of the those who had prospered from the ownership and use of property, in the form of hospitality and charity.  [read more]

Interesting article. The article also goes into the character of man within society among other topics.

History of Labor Unions Part III

How did unions come to wield so much power and influence over American politics? How did union leaders gain more access to the White House during the Obama administration than administration officials, Democratic senators or family members? The answer is simple: money.

The most frequent visitors to the Obama White House were Andy Stern, president of the Service Employees International Union, and his second lieutenant, Anna Burger. Also at the top of the list was president of AFL-CIO Richard Trumka. Trumka admitted that he visited the White House two or three times a week and had conversations every single day. In the 2012 election, according to The New York Times, labor leaders expected unions to spend $400 million on national, state and local elections.

The left loves to accuse the Koch brothers of buying elections, claiming they surpass any other political donors on the right or left, but the claim is ludicrous. The Koch brothers have personally given $3.2 million to politicians and parties over the past 15 years. The Huffington Post estimated union spending on elections and lobbying at $1.7 billion.

According to OpenSecrets.org, the number one political donor in American politics since the 1990 election is SEIU, with total contributions of $234 million — all but $2 million went to Democrats.

Source: History of Labor Unions Part III.

Big Labor’s excuse for all the money spending is that they have to keep up with the oppressive corporations’ spending. The truth is Big Labor spends more. Which is funny because I thought the Left is poor. Hmmm.

Here’s a FEE.org article (Feb. 15): “Unions Play Politics While Membership Tanks.”

4 Broken Obamacare Promises That Town Hall Protesters Should Remember

From The Daily Signal.com (Feb. 15):

While the House and Senate plan to repeal and replace Obamacare, members of Congress are hosting town hall meetings with their constituents and have been greeted by hostile crowds.

These folks seem to have amnesia about Obamacare’s glaring failures.

Here’s a quick refresher on Obamacare’s top four broken promises.

1. Costs are exploding. The typical family today pays about 35 percent of their income for health care.
2. Competition and choice are declining. On Tuesday, news broke that Humana will be leaving the Obamacare exchange markets next year. This was just the latest in a growing list of insurers who are jumping ship from this massive public policy failure.
3. Forget about keeping your plan. In 2014, the first year that Obamacare was fully implemented, the Associated Press reported that there were at least 4.7 million canceled policies across 30 states. The law’s insurance rules and mandates forced many insurers to cancel plans that people liked and wanted.
4. No, you can’t necessarily keep your doctor.

[read more]

Let’s hope Congress can for once and for all repeal and replace the nightmare called Obamacare or if you prefer the Unaffordable No-Care Act.