David Heinrich Blog

The "Holdout Problem" For Private Roads

2005-11-29T02:08:10Z

In response to this blog on Mises.org about Walter Block's response to the holdout problem for private roads, Jim Bradly had various objections (you can see them by clicking on the link). My response is as follows.

Jim Bradley,

One thing that has characterized your postings on Mises.org has been raw assertions, unbacked by praxeological analysis or empirical evidence.

1. Call options (that is, buying from land-owners an option to buy their property at a specified price) are something that is easily doable. They impose no violations of private property rights. The entire point of call options is that current property owners would not be forced to implement the plan. Those property owners who voluntarily agreed to be on the short side of a call option for their property have agreed to sell their property to a certain company at a specified price, should that company choose to exercise their option. The company could cheaply buy options for various pivitol plots of land along multiple routes.

2. Companies building roads can always burrow under the property of hold-outs (provided it isn't so close under as to cause collapse), if need be, or build bridges over their property.

3. It is not even entirely clear that the need for dealing with holdouts in the aforementioned manner would be necessary. Companies could buy property in secrecy, and not commence building the roads until they owned all of the property. This could be done through various trusts and shell-companies. If I buy property in a straight line from NYC to Miami, there is nothing about that property after my buying it that in any way would indicate to anyone that it's to be used as a road, vs. before I bought it. I could even buy it and allow the current residents to stay there for a time, provided that they maintain the property and pay for maintenance expenses. Or I could rent it out until I have all of the property to build my road.

4. You make the unbacked assertion that it's justified to violate private property rights, if the majority wants to. This is humbug. If the majority wants to violate property rights, they're nothing but a bunch of criminals, and their valuations are to be ignored. Why is it so difficult to understand this? If 9 people get together and "vote" to steal from the remaining 1 person for the "common good", they'd be laughed out of court if they tried the defense that they "voted on it", and did it for the "common good". Yet, as Rothbard noted, when the numbers are 9 million to 1 million, how the wool is pulled over people's eyes!

5. As for a defense of private property rights, see Rothbard's For a New Liberty and The Ethics of Liberty. Also see Hans Hermann Hoppe's argumentaiton ethics. In short, by engaging in any sort of argument at all, you're implicitly assuming that private property rights are valid. Oh, a few other sources of defense on private property rights: The Bible -- Thou shall not steal; do unto others as you'd have them do unto yourself; etc.

6. As for interpersonal utility comparisons, the point is that you can never say that coercive force is socially beneficial, because you can't compare utility between different persons. We can, however, say that every transaction which is voluntary, benefits both parties. As for the objection of envy or malice by third parties (who dislike the fact that such a transaction occurs), this is irrelevant, because they do not demonstrate said preference in action (hence, it is only psychological, and is irrelevant for praxeology). Rothbard's welfare analysis realizes the key insight that all voluntary transactions are mutually beneficial ex ante, whereas all non voluntary transactions are not. As to the benefit of the person who engaged in coercsion, who cares? This person is a criminal, and their value scales are not to be considered.

The alternative is the Coasian crap on societal welfare. That is, according to that theory, we don't say that the mass gang-rape by Japanese soldiers of Chinese women was "morally wrong" and something to be punished and prohibited. Instead, we have to look at the utility and disutility, of each party. It becomes an issue of comparing the disutility of mass rape for Chinese women being raped (the physical pain, the lasting psychological problems) vs. the utility gained by the Japenese soldiers who raped those women. The Coasian analysis argues that there are declining marginal disutilities for each additional rape, thus gang-rape is justified.

The more perverse an action, and the more morbid and repeated the crime is against a victim, the more Coasian analysis supports that crime. Indeed, under the Coasian framework, the perversion of the criminal benefits him in the analysis. For, a person who would participate in a gang-rape is surely a totally depraved and disgusting person; such a person may get a kind of "life-long" satisfaction out of the memory of exercising such violence against a helpless women. Hence, the more anti-social the criminal, the more perverse and sick his mind, the better he is under the Coasian analysis. This is the system that those who advocate the "greater good", soial welfare, democracy, or any other such similar tripe are advocating.

Frostburn

2005-10-18T21:12:22Z

I've just been handling stuff at -80 degrees Centigrade for a minute or so. We have shelves in our fridge, and one of them got jammed, so I was trying to put it in. Now, my first three fingers on my left hand have an intense burning sensation. Really, an interesting feeling. I wonder why it is that we find pain painful, and something to be avoided, and not just another feeling?

Why do I get wireless connection in my room

2005-09-20T05:30:08Z

A question to anyone reading...I'm currently in my room. My laptop is not plugged into my cable-modem router. I have a LinkSys router, but it relies on EtherNet jacks to rout my cable-connection; that is, it's land-line. Yet, I'm up in my room, with my laptop not plugged into anything except the outlet for power, and I'm getting a 1.0Mbps (albeit, low-strength) wireless internet connection. What's going on here?

As far as I know, the closest wireless connection is at work, which is a 5min drive. Is it possible the router has some secret wireless capabilities? Could I be tapping into a possible wireless router of a neighbor. I don't think that's likely, since the neighbors outside my window are exceedingly elderly people.

So, what's up? Maybe I should just count my lucky stars.

LIVE from New Orleans with Michael Barnett

2005-09-01T13:30:40Z

Michael Barnett, son of William Barnett II, is sticking it out in New Orleans. He's keeping a livejournal blog about what's going on, and Mises.org is running a live feed of his webcam. As someone who's friends with Michael, I know him to be a great person, and a hard-core Austrian, a supporter of the free market and libertarianism. Right now, he's exposing the fraud of State-management, and of State "protection" of private property.

So, what is Michael Barnett & co. doing in New Orleans? Business! He and his associates run directNICHeroically, they're continuing to serve customers, helping people out:

A local company called us because they heard we still had the datacenter operating. They asked for our help. We went to their office and brought back their most critical server. We are in the process of transferring 40 gigs of data from their most critical server at this time. Of course we have no experience with Macs so this will be interesting. While at their facility we noticed that they had 5 drums of water with 5 gallons each. With their permission we took the 25 gallons of water and their cleaning supplies to our office.

Michael has noted an enormous amount of looting going on, some of it by police officers themselves, in New Orleans:

The police are looting. This has been confirmed by several independent sources. Some of the looting might be "legitimate" in as much as that word has any meaning in this context. They have broken into ATMs and safes: confirmed. We have eyewitnesses to this. They have taken dozens of SUVs from dealerships ostensibly for official use. They have also looted gun stores and pawn shops for all the small arms, supposedly to prevent "criminals" from doing so. But who knows their true intentions.

So much for the myth of the police protecting private property. Meanwhile, it seems like every criminal or marginal criminal has surfaced in New Orleans, with massive looting of private property occuring. It is one thing to homestead goods that are going to be destroyed by the increasing water-levels, or food which is going to rot if not used -- this is salvaging -- but it is quite another to steal something that is in no threat of being destroyed, or that is indestructable (e.g., any precious metals). Furthermore, some of these crooks are stealing items of the most personal nature -- people's personal and emotional belongings, left in their homes. Apparently, it's Christmas for Crooks:

These people were absolutely nuts rammed trucks(stolen I'm sure) in to jewelry stores stealing items, they were tearing apart Wal-Mart carrying out TV's, Playstations, DVD players, etc. One lady was wheeling out an entire rack of merchandise, not sure what it was but sure wasn't clothes for food. They were all laughing and carrying on like it's freaking Christmas.

Amazingly, very few have mentioned how this entire episode is a giant example of State failure at every level and every point. It was well known for years that if a category 4 or 5 hurricane hit New Orleans, the levees wouldn't suffice:

[van Heerden] predicted that floodwaters would overcome the levee system, fill the low-lying areas of the city and then remain trapped there well after the storm passed -- creating a giant, stagnant pool contaminated with debris, sewage and other hazardous materials.

Van Heerden and other experts put some of the blame on the Mississippi River levees themselves, because they channel silt directly into the Gulf of Mexico that otherwise would stabilize land along the riverside and slow the sinking of the coastline.

Despite warnings from experts, the levees may also have contributed to an unwarranted sense of security among residents.

But that wasn't the end of State-failure. Central planners also stuffed thousands of people in a football stadium, a great plan for disaster if there's any weakness in the building, which there was. Look for increased calls for regulation, due to this episode of State-planning gone awry being blamed on the free market. Of course, there's also the looting, which police officers aren't stopping, and are even engaging in themselves. Furthermore, this kind of looting is the result of forced integration and various welfare policies, which destroys values.

Edit: Vedran Vuk has commented on my cross-posting of this entry at the Mises Blog. He provided an extremely excellent example of private vs. public protection. Quoting his comment:

I'm a student at Loyola University of New Orleans and live in a building (1750 St.Charles Ave) where we have private security guards. I've called in and found out that the apartment I live in is fine and that they have stopped looters from entering the building. At least, this is great evidence of privatized security staying during the storm and protecting. Much better than the crooked ass cops of New Orleans.....but who knows how long the security guards can hold out. Please give them your prayers. -- Vedran Vuk

pictures of Mises University 2005

2005-08-10T20:22:01Z

David Veksler was kind enough to publish the pictures he took at the Mises University 2005. There are a few of me and various other people in there; most of the pictures, I look rather silly in. One of them is downright laughable.

picture 1.
picture 2. Lisa Casanova to the right of me; David Veksler 2nd from right side.
picture 3. The guy on the far right-hand side was my room-mate.
picture 4. Me and my friend Dan. Yea, I know what you're thinking: no smart comments.
picture 5. Me and my friend Gabrielle, from Canada. She's pretty cool -- has ear-rings with the American flag on them: that really irks the socialists in Canada.
picture 6. Alright, I don't know what was up with that one. Maybe I blinked just when he took it? Anyways, the guy on the far left hand side is David Veksler, the guy who took all these pictures, and the web-tech guy for Mises.org.
picture 7. David and David. (me and David Veksler). Had some kind of sideways smile going on, or something.

Beethoven's a hit

2005-07-27T14:44:32Z

From BBC's website, there were 1.4 million downloads of Beethoven in an online experiment. The music industry is now shaking in their boots, so to speak. Although the downloads were free and new songs from the music industry cost a small (cents) charge, it's still an overwhelming disparity. Troubling, is that BBC thinks that many downloading the symphonies were "coming to Beethoven for the first time". In any event, the music industry is really worried, you see. Their crappy worthless modern trashy music...well, just can't compete. There's a reason Beethoven's work has endured for hundreds of years, and why the junk put out by the music industry can't last more than a few years, if that.

The Iron Time Bomb

2005-06-16T13:57:11Z

Fascinating article on an Overlooked Cancer Cure from Japan by Bill Sardi, who has numerous health-related articles on LewRockwell.com. Summary: A natural chemical called IP6, found in rice bran, exceeds the effectiveness and safety of many anti-cancer drugs. The author has an e-book on the topic, The Iron Time Bomb available for download for $16. He also has a free e-book available for download if you sign up for his newsletter, The Collapse of Conventional Medicine.

Detroit Pistons' "strategy"

2005-06-06T00:38:23Z

The strategy of the Detroit Pistons: same as the old strategy. Put together by Dumars -- who apparently has an eye for punks -- you get a rough squad, with talent evenly distributed. Then, you play really dirty basketball. Because you don't have "star" players, but rather a collection of above-average players, the risk to your team of playing this way is minimal. However, the risk to other teams -- who do have star players -- is severe. Hence, see the Miami Heat and their situation with Wade. Throw that in with a whole bunch of whining, and you have a "team". You see, when the Piston's lose, it's "the refs that beat them" (not a combination of poor play on their part and good play on the part of their opponents). But, when they win, well, "there's no excuses -- it's the playoffs". What a bunch of worthless hypocrites.

Detroit Pistons: A bunch of team whiners and sore losers

2005-06-03T13:33:36Z

I keep hearing about how the Detroit Pistons are a "real team". Teamwork, etc etc. Well, they must be a bunch of team whiners. Almost every game, they've bitched about the refs, despite the fact that fouls were called pretty evenly between the Pistons and the Heat. Their coach, Brown, has shown himself to be nothing more than a hypocrite, who talks the talk about playing a "team game", but is in the meantime negotiating the Cleveland for a position. And these guys are dirty players, just like the late 80s championship Pistons. Rather than saying the Miami Heat played a good game, and deserved to win, they say, "it was the refs". Following in the "tradition" of Isiah Thomas, perhaps:

When the Pistons were eliminated in a four-game sweep by the Bulls in the 1991 Eastern Conference final, Thomas organized a walkout in which the Pistons refused to shake hands with the winners.

Just like Very poor sportsmen, and self-absorbed, too. All season long, they've been talking about all they've had to overcome, like the brawl, and whatnot. Now, they're probably going to talk about how they have to "overcome" Brown's stunts. Quite frankly, it would be a real shame is punks like these went to the NBA Finals. Despite Miami clearly being the better team, the Pistons might have a better chance, if Wade can't rebound quickly from the dirty-play of Pistons players.

You wanna talk about a "real team", fine. Talk about the Spurs. A real team. A real class act. Miami is also a "real team" and a real class act too. When they lose, they say it was because they played poorly, and the other team played well. Their coach doesn't blame it on the refs. But the Pistons? If you consider whining a "team activity", yes, they do that as a "team".

Corby Convicted of "Drug Smuggling", Sentenced to 20 years

2005-05-27T06:57:37Z

Following up on a previous blog, Australian Australian Schapelle Corby was convicted of drug-smuggling in Bali, and sentenced to 20 years in prison. Breaking down in tears, embracing her family, before leaving, Ms. Corby embraced her family before Bali thugs took her to a prison cell. Ms. Corby prays for justice every day.

Defense Evidence Ignored, Bali Police Coverup, Corrupt Prosecutors

The judge dismissed her defense that the drugs were planted on her, saying she had no evidence to support that. Apparently, in Bali, like in Nazi Germany, one is presumed guilty until proven innocent, despite the claims of Professor Tim Lindsey. Irrelevant of whatever may or may not be the case as printed on pieces of paper, in practice, it is obvious that one is assumed guilty until proven innocent in Bali.

The prosecution trumped up the claim that Corby admitted the drugs were hers, something she clearly did not do, as she later said. The judge also apparently ignored a letter by the Australlian government stating that they were investigating Quantas Airlines baggage handlers in a cocaine-smuggling operation. Apparently, the reason for this is that the letter was sent "too late": If it were to be submitted now, it would have no value at all according to Indonesian law.

This shows the worthlessness of State legal systems, holding bureaucratic rituals as sancrosanct, more important than human liberty and the pursuit of justice. This is the result of the attitude that "justice" is something that can be legislated on a piece of paper.

The police didn't fingerprint the bag containing the drugs, or videotape their search, so for all we know, they planted the evidence. The prosecution (or police) denied Corby's defense's request to have the marijuana tested to reveal its source, casting further reasonable doubt in-and-of itself. What exactly do they have to hide?

Ron Bakir, the heroic financial backer to Corby's defense, claimed that the prosecution was open to dropping the case in exchange for a bribe, but later retracted that statement (probably because he was traveling to Bali to speak with Corby personally) and apologized to the Bali prosecution.

The Inquisition: A Judge Who Never Acquits

Speaking of the prosecution, I should mention that one of Corby's judges (they don't have juries in Bali) was a de-facto member of the prosecution. "judge" Sirait bragged that he had never acquitted an accused drug-smuggler, and that he'd never sentenced one to less than 5 years. Apparently, Sirait makes no distinction between the words "accused" and "proven guilty". With Inquisitioners like Sirait posing as "judges", why bother with a trial at all? Apparently, the only purpose of the trial was to prolong the poor victim's (in this case Ms. Corby's) agony, making her think there actually was some remote possiblity of something resembling justice, when clearly there wasn't.

In finding Ms. Corby "guilty", Sirait said, [f]rom Corby's defence I haven't heard anything to prove she is innocent. There it is, clear as day. One has to prove innocence beyond a reasonable doubt -- apparently, beyond all doubt before Sirait. Sirait aquits when hell freezes over.

Bali Hotel Operators "Surprised" at Proposed Boycott

Amazingly, tourism operators in Bali are "dismayed" that some travel agents and others in Australia are calling for a boycott on Bali because of the Corby-case. In a inspiring show of support for Corby, 177 Australian travel agents said they'd stop selling Bali if Corby was found guilty. Australians have been the biggest tourists to Bali, brining in large amounts of money. Bali hotel operators are puzzled at the desire to "punish the Balinese", since Corby's defense is that individuals in Australia planted the drugs on her. They claim to be puzzled at this, when the baggage handlers were responsible. The baggage handlers were responsible for planting the drugs, not for prosecuting Ms. Corby. That falls on the heads of the prosecutors.

As for the hotels in Bali, it is quite possible that meny of them support these draconian anti-drug laws, and thus share responsibility. For those that do, this is punishment. For those that don't, it is a free-market response -- well within the right of consumers -- to encourage them to actively oppose such barbarism. Here, we have, as I predicted earlier, and example of a State action lowering the attractiveness of Bali to tourists, thus lowering property-values in Bali. Who would want to travel to a country where one is de-facto presumed guilty until proven innocent, and where all evidence set forth in one's defense is systematically ignored, either outright or because of worthless legal minutia on procedure? Who would want to go to a country where to be accused of a crime is equivalent to being convicted of a crime, and where a trial is only held for show?

Resources:

Thanks to Alan Singer, who blogged about Corby for these references:

Schapelle.com
SchapelleCorby.com: A Forum
SaveSchapelleCorby.org
FreeSchappelle.com
Myesk.ws
Schapel Corby Blogspot
Don't Shoot Schapelle: Innocent Without a Doubt (indeed, she is, because drug-related "crimes" aren't any-more crimes than eating sugar).

What You Can Do

Unfortunately, it is now too late to write anything to Bali officials regarding the case, although it is now obvious that no please for civility and respect of human rights, nor even any evidence, could have helped Corby against the Inquisition she faced. However, Ms. Corby (Schapelle) could still use the support of people world-wide:

Join the mission to save an innocent Australian life
The Free Schapelle Shop
Bring Schapelle Corby Home
Free Schapelle Corby Petition Spot
Hard copy petition to free Schapelle Corby. Download this petition, print, sign, and mail to Free Schapelle Corby. PO Box 113. Jimboomba QLD Australia 4280.
Schapelle Corby Support Petitions
How you can help Schapelle Corby

Post comments here.

Mises.org Radio!

2005-05-26T03:11:33Z

This is truly amazing. Mises.org now has an online radio station, with three channels. Mises.org also offers podcasting, a service that allows you to automatically download the latest audio items placed on Mises.org using an RSS program (see Wikipedia for a description of podcasting. Mises.org also has Live Listening and Live Watching streaming media features. Check out their list of Upcoming Webcasts on Mises.org. Talk about service with a capital "S".

what's going on

2005-05-25T22:38:05Z

Well, it's been a while since I've updated my LiveJournal. Here's the latest news. I got accepted into the Simon MBA program at the Univ. Rochester. Now, I'm trying to plan out my courses. Here's my preliminary plan of electives to take:

1. Financial Statement Analysis
2. Auditing
3. Taxes and Business Strategy
4. Financial Reporting I
5. Financial Reporting II
6. International Financial Statement Analysis
7. Basic Business Law
8. Advanced Business Law
9. Investments
10. Corporate Finance
11. Corporate Financial Policy and Control
12. Cases In Finance
13. Investment Management and Trading Strategies
14. Organizational Governance and Control

15. Supply Chain Management
16. International Manufacturing and Service Strategy
17. Process Improvement

They also have a course on macroeconomics, and one on international economics and finance, but I figured those would be mostly mainstream humbug, thus largely a waste of time.

Other news. I'm looking for a car. The car I've honed in on is the Hyundai Elantra. Nice little car. Great warranty, and lots of features. I'm trying to decide whether to get the GLS or GT version (GT version has lots of extra features, including MP3-player and leather-seats). Because the GT version is more than $1000 more than the GLS version, I'm looking at having leather upholstery installed after-market, as well as a car MP3-player.

I'm just finishing up with this semester of courses. Finals in 2 weeks. This summer, I'll be taking Basic Business Law and Capital Budgeting & Corporate Objectives. If anyone has any suggestions.

Bali prosecutors demand life in prison for Corby, alleged drug-importer

2005-04-21T16:15:01Z

Apparently, in Bali, one can get the death penalty for importing drugs. Bali prosecutors, however, have been "merciful", and only asked for life in prison for Schapelle Corby, an Australlian beauty therapist accused of smuggling 9lbs of marijuana into Bali.

Although no-one should be imprisoned for selling, importing, exporting, or using drugs in the first place, Corby claims that someone placed the drugs in her bag after she checked in at the airport. Ms. Corby believes that her life is over.

Do you know what the alleged reason is for such barbaric punishments in Bali? According to Prosecutor Ida Bagus Wiswantanu, the reason is:

"The defendant's actions can ruin the image of Bali as a tourist destination," he told the three judges who will determine her fate. "The defendant's actions can make Bali look like a drug haven and affect young people's lives."

Of all the worthless utilitarian arguments to justify life in prison, or death, for drug-use, that's one of the most atrocious I've heard. Because the prosecution thinks that Corby's actions "make Bali look like a drug haven", that justified life in prison, or even death. I'm sure similar arguments are used to "justify" stoning women to death for infidelity. Bali's punishments for drug-related crimes challenges the punishments given in the Middle East for adultery in terms of injustice and cruelty.

Incidentally, I don't think that sentencing women and men to life in prison, or possibly death, for drug "crimes" has a positive effect on tourism. It seems more likely to make Bali about as attractive as a tourist spot as Afghanistan. Post comments here.

on nuclear weapons

2005-04-10T23:58:12Z

To anyone who would argue that it is ever permissible to use nuclear weapons, for their only meaningful purpose: murdering hundreds of thousands (or millions) of people. If those people living in Hiroshima and Nagasaki -- those people who were murdered by the atomic bombs -- would have been justified in shooting down the bombers, to defend themselves, how can one say the use of nuclear weapons is justified? If the use of force is justified, then the person it's being used against isn't justified in defending himself. It seems to me that the only logical position those defending the use of nuclear weapons could take is that the victims of them aren't justified in defending themselves. In that case, they would have to explain why innocent people (at least people innocent of crimes that would justify death) aren't justified in defending themselves from death. Post comments here.

URLs and Property Rights

2005-04-01T18:07:50Z

In this post, K. Chris Caldwell discussed a censorship law which forces ISP's to block access to IP addresses because a website under that domain may contain child-pornography. This blocks access to thousands of unrelated websites, which are separate domains under the same IP address. Pensylvania attempted to justify this, saying that individuals could move their website urls to different IP addresses. Aside from the property-rights that are obviously being violated, there is no way to determine the destructive impact (economic or otherwise) this may have. 

Business' that had high-traffic websites under that IP address lose enormous amounts of money while trying to get their url transferred to another IP address. Worse yet, this may have a negative impact on the "performance" of the internet as a whole. IP addresses are actual places. 66.210.65.47 is not just some number that you type into your web-browser that magically gets you to Mises.org. It is the cyberspace address of an actual server -- a powerful computer that cranks out the Mises webpage. This is a physical space using actual resources to produce Mises.org for our viewing pleasure. When the government starts demanding that ISP's block IP address', it is effectively removing a server from the internet. This reduces the point-to-point distribution of the internet and places more strain on the remaining pool of servers, which now have to start handling the load of thousands of extra web-sites.

Furthermore, it is obvious that government action isn't any more likely to "protect children from being the victims of child-pornography" or "protect children from pornography" than it is likely to "protect us from spam". Like others, those hosting child-porn on their websites can move to different IP address'. And there are natural free-market solutions to child-porn on the internet. ISP's often have contracts that allow them to revoke web-site hosting priviledges if websites contain child-pornography. Many internet browsers offer "Content Rating" to prevent children from entering websites which are offensive in various ways.

And in every computer, there is this wonderful thing called a "hosts file". In Windows, it is located in "C:\Windows\hosts"; in Unix, it is usually in "/etc/hosts". A typical line in the file would look like this "mises.org 66.210.65.47". What this tells your web-browser is that when you type in mises.org, it should go to the IP address 66.210.65.47. This is essentially a short-cut. Rather than having to query your Domain Name Server (DNS), which takes additional time, to get the IP address corresponding to the website entered, your browser simply checks your hosts file and goes to that IP address. The intended use of this file was for that purpose. However, individuals have creatively used the very same file to block websites. If you type the line "aclu.org 0.0.0.0" or "aclu.org 127.0.0.1" in your hosts file, you will block access to the ACLU from your computer, preventing the brainwashing of your children. This is because 127.0.0.1 is the "local host" (your computer) and "0.0.0.0" is an invalid IP address. I use this technique to block online advertising domains (e.g., doubleclick.com), but it can also be used to block any domain you find offensive.

This brings up an issue that's underlying this entire topic. What is important here is not the vague "right to freedom of speech". What is important is property rights. Considering property rights, it should be up to the ISP only whether or not to block various websites, domains, and IP addresses. Similar analysis applies to the mapping of IP addresses to domain names (a function done by DNS servers). Government rules and regulations in this area inherently violate property rights, as they essentially force the owner of DNS' to change an entry in their computer's hosts file.

For example, it should not be up to some quasi-governmental US-government-created "corporation", ICANN, to decide whether or not apple.com brings you to the website of Apple Computer or of someone who made a website about growing apples. Ultimately, that should be up to the owner of each DNS server, dependant on contracts he's agreed to. Apple Computer has no inherent right for every DNS server to point apple.com to their website, because they do not own every DNS server. They only have these rights in-so-far as they contract for them with various ISP's, which may ultimately have contracts with the owners of various DNS servers.

This brings up the government objection, that if different DNS servers mapped the same domain-name to different IP addresses, the internet would be unuseable chaos. This is partially correct, in that, depending on which DNS server you told your browser to use, you would go to different websites. This would make sharing websites difficult, and would break links from one web-site to another. However, this is only correct if you assume that, absent government intervention, everyone is going to start doing their own thing with their DNS server...one DNS server will have mises.org mapped to 66.210.65.47, another will have doc.gov mapped to 66.210.65.47. In reality, that's not what will happen. The free market has settled for standards time and again absent government intervention. HTML is a standard settled on absent any government regulation. Likewise, the free market could easily prevent collision between different DNS servers as to which domain corresponds to which IP address, and even come up with solutions to dealing with possible collision (e.g., converting href's to IP-addresses followed by subdomains, rather than leaving them as a string of text-characters).

Finally, there's the bald fact that the government's creation of ICANN hasn't prevented collisions, but has caused thousands of them. There is a free-market alternative to ICANN called OpenNIC. Those who created OpenNIC purposefully chose not to conflict with ICANN's assignment of domain-names to IP addresses. Thus, they decided that what they needed to do is create new top-level-domains (TLDs) for alternate use with the alternate rules. A top-level-domain is the last part of a website that you type; the ".org" in "mises.org", for example. OpenNIC created TLDs such as ".parody" and ".geek". These TLDs are stricly and privately regulated (e.g., you can't put a commercial website on .parody). One alternative TLD, .biz, has existed for many years. However, the quasi-governmental "corporation" ICANN decided to make it's own ".biz", which conflicts with the .biz that had existed 6 years prior to ICANN's version. Clearly, ICANN has caused, not prevented, conflicts.

The Diamond Fallacy (from Mises.org)

2005-03-28T18:35:06Z

By Gene Callahan

[Posted March 28, 2005]

Jared Diamond's book Guns, Germs and Steel: A Short History of Everybody for the Last 13,000 Years is a fascinating and quite readable speculation on the relationship between geography and history. He has assembled a cornucopia of interesting facts and plausible insights concerning the course of events over the last 13,000 years. The result is well worth reading, despite the fact that I think the ambition of his main thesis reaches well beyond his actual achievement. That discrepancy is due, I believe, to Diamond's having little understanding of what history actually is.

The critique of Diamond’s conception of history I offer here is based on the view of the historical enterprise put forward by such philosophers of history as R.G. Collingwood, Ludwig von Mises, and Michael Oakeshott. They share the view that history consists in the effort to identify the particular, past circumstances that make intelligible the subsequent occurrence of other, unique events. Any attempt to explain the human past by reference to general laws or broad patterns is, in this view, a distinctly separate way of comprehending the past from that offered by history. Furthermore, any effort to discover such “laws of history” faces inherent obstacles that prevent it from achieving the sort of success that, for instance, physics has in describing universal laws of matter and energy.

Diamond’s work falls within the broad class of theories purporting to detect universal historical laws, and are therefore subject to the same criticisms that Collingwood, Mises, and Oakeshott directed against his intellectual predecessors. His attempt to discern typical patterns in humanity’s past is not, in and of itself, absurd or doomed to failure. The main problem with his enterprise is that he seemingly is unaware of what sort of investigation creates the truly historical past. As a result, he proposes substituting his own “geographical past” for the genuinely historical past.

While Guns, Germs and Steel offers many interesting and plausible suggestions as to how geography may have influenced human history, his apparent ignorance of the discipline of history leads him to propose replacing true historical inquiry with a “scientific” hunt for the “ultimate causes” of historical events. Diamond's central error, besides being of interest to anyone concerned with historical methodology, also has broader political implications, which run as an implicit secondary theme through Guns, Germs and Steel, and are made more explicit in his recent book, Collapse. I will address the subject of policy in the conclusion of this article.

Diamond’s Thesis

Diamond’s central conception is that the course of history, broadly speaking, is not determined by individual actions, cultural factors, or racial differences, but by the environmental circumstances into which different groups of people accidentally wandered. More specifically, those groups that happened to wind up in places that offered a variety of plants and animals suitable for domestication, and that made acquiring domesticated species and new technologies from other societies relatively easy, wound up having a decisive advantage over groups located in environments lacking those features. As a result, when geographically advantaged societies encountered groups not so blessed, the outcome was inevitably that the former conquered or absorbed the disadvantaged culture. Thus it is geography, claims Diamond, and not greater inventiveness, a superior culture, or racial differences that is the “ultimate explanation” of why, for instance, Europeans came to rule the Americas rather than American Indians ruling Europe.

Some of Diamond’s critics have accused him of excusing past atrocities, wars of aggression, genocides, and other crimes. They believe his thesis implies that the perpetrators of such acts are off the hook, since “geography made them do it.” In answering that charge, Diamond quite correctly distinguishes between understanding why some event occurred and justifying the actions of the people involved. As he notes, “psychologists try to understand the minds of murderers and rapists . . . social historians try to understand genocide, and . . . physicians try to understand the causes of human disease” (pg. 17). Yet none of them are trying to justify murder, rape, genocide, or disease—indeed, their attempt to understand them is often motivated by the desire to prevent them.

Naturally, no conscientious scholar makes a controversial and sweeping claim, such as attributing to geography the primary causal role in history, without presenting a fair amount of supporting evidence. In fact, the bulk of Diamond’s book relates historical events meant to demonstrate the soundness and explanatory scope of his claim.

Diamond’s Evidence

In order to make his thesis plausible, Diamond must show that there were crucially important geographical differences between the homelands of those societies that wound up as conquerors and those that turned out to be the vanquished. He has exerted tremendous ingenuity in attempting to do so. I believe that he has succeeded to some extent, although it is a much more limited accomplishment than he ambitiously claims to have achieved.

The main historical outcome that Diamond seeks to explain is that the descendants of the people who 13,000 years ago occupied Eurasia^[1]came to rule over such a large portion of the Earth’s inhabitable land. Why wasn’t it American Indians or sub-Saharan Africans who colonized Europe, rather than the reverse?

Diamond asserts that it was the combination of the Eurasians' superior technology, and of the various diseases that they carried proving massively lethal to many of the other people they eventually encountered, that led to that outcome. (Thus, the “guns, germs and steel” in the title of the book.) He calls those facts the “proximate causes” of the present Eurasian dominance of the world. But, quite understandably, he is not satisfied to halt his inquiry at that point. Why, he goes on to ask, did Eurasians come to possess better technology than did the inhabitants of the other continents? And why did Europeans carry germs so deadly to American Indians that many Indian nations were wiped out in advance of any direct contact with Europeans (through disease transmission from Indian tribes that did have direct contact with colonists), rather than the Europeans falling in droves to diseases they contracted from Indians?

To answer the first of the above questions, Diamond begins by noting that the pace of technological development in a society depends heavily on its ability to create a food surplus. That enables the emergence of producers who can specialize in craft manufacture, because once a society reaches a situation in which the labor of one person can supply more food than is needed simply to keep him alive, some members of the group do not need to devote themselves to procuring sustenance. And a food surplus generally only comes about once a society learns to deliberately produce its food, rather than relying on finding it naturally produced and then hunting it down, digging it up, or picking it.

Diamond makes a convincing case that, given enough time living in one place, all modern humans (meaning homo sapiens) will tend to figure out how to domesticate any of the indigenous plants and animals that are suitable for agriculture. (For example, there are nine widely separated places on the globe—the Fertile Crescent, China, Mesoamerica, the Andes, the African Sahel, tropical West Africa, Ethiopia, and New Guinea—where food production seems likely to have arisen independently.) However, it happens that Eurasia was blessed with far more species suitable for domestication than any other continent. Of today’s major food crops, more originated from there than anywhere else. Of the fourteen mammals over 100 pounds that humans have domesticated, every one of the “major five” (cattle, sheep, goats, pigs, and horses) is Eurasian in origin. Nor is it the case that Eurasians were simply more clever than the residents of other continents at learning how to domesticate the local flora and fauna—despite the fact that they eventually came to occupy every inhabitable continent, and despite all of the advances in technology and the increased understanding of breeding techniques that have taken place in recent centuries, European colonists have domesticated no new species of major agricultural importance in any of the lands they came to conquer.

Diamond also contends that the “east-west axis” of Eurasia, as opposed to the “north-south axis” of the Americas and Africa, made an important contribution to Eurasian's current global dominance. Because Eurasia extends mostly from east to west, it provided a vast area of roughly similar climatic conditions over which a multitude of societies could share agricultural innovations. The result was an enormous, integrated area of agricultural practices and common crops stretching roughly 6000 miles, from Ireland to Japan. In contrast, the crops and the agricultural economy developed in tropical West Africa could not spread south into the Mediterranean climate of South Africa or north into the Sahel. The species domesticated in the Andes never reached central Mexico, nor visa-versa, because they were useless in the intervening tropics of Central America. Although Mexican corn eventually was cultivated in eastern North America, it took millennia to spread to there, because of the two regions’ different climates and the arid stretches separating them.

It is not terribly difficult to imagine that an advantage in food production can result, over time, in a technological advantage as well. But how can Diamond account for the diseases that Europeans carried to distant shores being so much deadlier to the locals than the diseases they carried were to Europeans? Quite cleverly, it turns out.

He launches his explanation by suggesting that epidemic, or “crowd,” diseases, such as influenza, measles, smallpox, and bubonic plague, cannot easily sustain themselves among small bands of hunter-gatherers. They will tend to wipe out the entire population, which, unfortunately from the point of the microbe causing the disease, wipes the microbe out as well. It is only among large populations of humans, in close contact with other populous groups nearby, that epidemic diseases have a chance to persist over long time-spans, both because the likelihood of a few individuals having natural immunity to the disease is greater, and because the microbe can shift back-and-forth between neighboring populations, surviving dormant in a group that has recently built up immunity to it until it can jump to another, more susceptible neighboring population.

But where do such microbes come from? They can’t conjure themselves into existence out of thin air once a sufficiently dense human population emerges. No, Diamond argues, they come from the only place they plausibly could—they are mutations of microbes that evolved to survive amidst dense populations of other mammal species, specifically, among the herd animals, a number of which humans domesticated and came to live with in close quarters. Therefore, agriculture provided the necessary conditions for the survival of epidemic diseases among humans, and animal domestication, especially of herd mammals, supplied the source of microbes able, through natural mutation, to make the relatively small adjustment from being hosted by cows or pigs to being hosted by humans. As a result, when Europeans first encountered American Indians, it was the Europeans, and not the Indians, who carried the deadly crowd diseases.

Diamond illustrates the patterns he has detected with a number of historical examples, including less familiar ones such as the Austronesian expansion, from Taiwan to the Philippines, then to Indonesia and Malaysia, and on westwards to Madagascar and east across the Pacific, eventually reaching Hawaii and Easter Island. Given what we have examined so far, Diamond’s work suggests the following, quite sensible ideas:

When two societies first encounter each other, the one that is more technologically advanced will frequently conquer or absorb the less advanced;
Advances in technology depend heavily on a food surplus, and, therefore, on agriculture;
The degree to which agriculture could be practiced in any location, before the advent of world-wide commerce, depended heavily on what species were locally available for domestication or could be acquired from neighboring cultures sharing a similar climate;
Agriculture and the domestication of herd animals are also prerequisites for the emergence of epidemic diseases among humans; and
Therefore, agricultural, herding societies will carry deadlier germs than will hunter-gatherers or people that farm only plants.

But Diamond is not satisfied with merely having discovered certain factors that frequently have been influential in humanity’s past. Instead, he aims to transform the entire discipline of history into a natural science that discovers deductive-nomological [2]explanations, one that determines the “ultimate causes” of historical events, rather than mere “proximate causes,” such as the actions of people or the ideas that they held. In adopting that grandiose project, Diamond turns what would have been an enlightening and sound exploration of some common historical patterns into a deeply flawed attempt to reform a subject he does not really understand.

For example, in his effort to squeeze the course of real events into his conceptual scheme and thereby demonstrate his “laws,” Diamond often has to put a good deal of spin on historical episodes. In attempting to explain why the Vikings did not successfully colonize the New World, while the Spaniards and the Europeans who followed in their wake did, he writes, “Spain, unlike Norway, was rich and populous enough to support exploration and subsidize colonies” (pg. 373). But this declaration simply brushes over the fact that Norway did successfully explore the North Atlantic, and did successfully colonize the Faeroe Islands and Iceland. If Diamond were true to his project of turning history into a deductive-nomological science, he ought to proceed to formulate a quantitative law governing just how far from the mother country a colony can survive, given any particular amount of wealth and any number of residents in the colonizer. However, simply to state that requirement is to expose the attempt to stuff human history into a deductivist framework as the absurdity that it is.

Another instance of forcing the facts to fit the theory is Diamond’s “law of history” asserting that agricultural societies will inevitably come to dominate their non-agricultural neighbors. He ignores the multitude of instances where settled farmers were conquered by nomadic horsemen: the Hittite conquest of the ancient Middle East, (possibly) the invasion of Greece by the Dorians, the successive movements of the Celtic and Germanic people across Europe, the Aryan migration into India, the Turkish conquest of much of the Moslem world that began in the 11^th century, and the vast Mongolian conquests of the 13^th and 14^th centuries.

In fact, such examples led both the political theorist Albert Jay Nock and the economist Murray Rothbard to suggest a typical pattern in history nearly the opposite of Diamond’s. They hypothesized that states arise when some nomadic people, who have been repeatedly raiding a nearby society of relatively peaceful farmers over an extended period, come to realize that it is more profitable to settle right in the farming community as rulers, enabling them to continually raid the productive population in the form of taxes. (See Nock, 1935, and Rothbard, 1978.)

I don’t wish to enter here into disputes as to how the state came to be, or as to whether the pattern noted by Diamond is more or less common than that detected by Nock and Rothbard. I don’t contend that such counter-examples make nonsense of Diamond’s observations, much less that they demonstrate a “law of history” such as “nomadic horsemen always will defeat settled farmers.” But they do show that the complexity of history defies attempts to deduce universal laws from its complex patterns. It is only by “cherry picking” his examples that Diamond can defend his claim that he has found “ultimate causes” in history.

Diamond also glosses over the divergence between his hypothesis that a lead in food production and subsequently other technologies is the “ultimate cause” of one civilization’s dominance over another, and the inconvenient fact that the first region to develop agriculture, animal husbandry, and writing was the Fertile Crescent, roughly located in what today is Iraq, Syria, and Turkey. None of those countries are dominant powers in today’s geo-political scene. He attempts to explain this anomaly by noting the environmental degradation of the relatively fragile ecology of the Near East due to extensive human exploitation of the area’s natural resources, such as the almost complete deforestation of the region that occurred as its residents cut down trees for timber and to clear land for farming. He declares that, as a consequence, “with the Greek conquest of all advanced societies from Greece east to India under Alexander the Great in the late fourth century B.C., power finally made its first shift irrevocably westward” (pg. 410). Diamond fails to explain exactly how, if this shift of power was “irrevocable” and was an inevitable result of human damage to the Near East’s ecology, power, as well as the cutting edge of scholarship, shifted back to the Near East during the first six or seven centuries after the fall of Rome.

After all, if Alexander’s triumph was merely a “proximate cause” of the waning dominance of southwestern Asian culture, while the “ultimate cause” was environmental, then it should have been impossible for the region to ever regain its former glory. Nevertheless, many centuries after “power” had scurried “irrevocably westward,” the territory ruled by the Muslim caliphate exceeded that of the grandest empires of the ancient Near East by perhaps an order of magnitude. Nor is it obvious that Alexander’s triumph over the Persian Empire had anything to do with the ecological state of affairs in the Near East – it seems, by truly historical accounts, to have been primarily due to Alexander’s brilliance and tenacity as a general. (See Green, 1992, for more on this point.) And it would seem ludicrous to contend that the “ultimate cause” of Alexander’s conquests was some environmental advantage held by Macedon, a late-to-develop and resource-poor backwater of the Greek world.

Diamond Does Not Comprehend the True Character of History

I believe that Diamond’s desire to transform the practice of history stems chiefly from the fact that he understands neither the nature of the material from which the historian launches his inquiries, nor what the historian’s task is in relation to that material. Diamond has reverted to the view of history held by 19^th-century positivists, who believed that the historian is presented with a collection of “historical facts,” and that his job is to discover the “laws” or “historical forces” that explain those facts.

For example, Diamond declares that, since the “whole modern world has been shaped by lopsided outcomes [in clashes of different cultures] . . . they must have inexorable explanations, ones more basic than mere details concerning who happened to win some battle or develop some invention on one occasion a few thousand years ago” (pg. 25). Yet he neither refutes the idea that historical contingency can offer adequate explanations in this regard, nor does he defend his insistence upon “inexorable explanations” of the human past.

Now, despite the recent emphasis in the philosophy of science on how all facts are “theory laden,” there is a sense in which it is true that the natural scientist does have the facts to be explained presented to him as a given starting point for his investigations. A certain star just does produce a certain spectral pattern. There may be disagreement as to what the pattern means, or even as to whether it is significant, but there it is. If some astronomer doubts it is so, he can re-create the pattern for himself. Compound A and compound B just do produce a certain amount of heat when combined. The chemist skeptical of the fact as reported can combine them herself and make her own measurement.

But no similar facts are given to the historian. Instead, he is faced with certain artifacts that have survived into the present, and which he takes to be signs of past events that are not present before him, events that it will never be possible to re-create. Nor can the surviving pieces of evidence of past happenings be taken at face value. A text purporting to describe a battle may have been composed to glorify the victor or excuse the loser. A politician’s memoirs may have been written with an eye to making him look good to future generations. The inscription on a statue may have been re-inscribed at the behest of a ruler jealous of his illustrious predecessor’s accomplishments. The historian is always presented with a collection of initially ambiguous and often, on their face, mutually contradictory pieces of evidence, on the basis of which he attempts to determine what the facts really were. The “facts of history” are not the starting point of his inquiry, but are instead its end product. As Collingwood notes, “The fact that in the second century the legions began to be recruited wholly outside Italy is not immediately given. It is arrived at inferentially by a process of interpreting data according to a complicated system of rules and assumptions” (1946, pg. 133).

To denigrate historical inquiry because it does not mimic the natural sciences in attempting to discover universal laws is to declare that there is no value in simply determining what really happened in humanity’s past. Setting aside, for the moment, the question of whether it is even feasible to formulate “laws of history,” a question that we will address below, I contend that the effort to discover the historical past is worthwhile in its own right, even if there is another discipline that could discover historical laws. To learn what really occurred in the past is to understand how we came to be where we are today. The knowledge gained through historical inquiry enables us to see how the myriad decisions and actions of our predecessors, the ideas they held, the ideals to which they aspired, the gods they worshipped, and the demons they feared, all combined to create the world in which we find ourselves today.

Lacking an understanding of what real historical research consists of, Diamond winds up doing “scissors and paste” history. His approach fails him in at least the one instance he discusses with which I have the most familiarity: the story of the QWERTY keyboard. He declares “trials conducted in 1932 with an efficiently laid-out keyboard showed that it would let us double our typing speed and reduce our typing effort by 95 percent” (pg. 248). If that were really true, then the fact that no company employing large numbers of typists, and wishing to double their productivity while at the same time making their jobs much easier—surely a profitable move!—chose to break with convention and switch to this efficient keyboard layout is astonishing.

But we can contain our astonishment. It turns out that the study Diamond cites was severely flawed, showing no evidence of using a genuine control group or random sampling to choose participants. Furthermore, it was conducted by none other than August Dvorak, the inventor of the purportedly more efficient keyboard, who, holding the patent to his design, had a large financial stake in proving the superiority of his model. Later, independent studies did not confirm Dvorak’s outlandish claims. (See Liebowitz and Margolis, 1996, or my summary of their findings.)

Diamond also periodically employs the long discredited idea that there is a significant division between “human history” and an earlier time, before the invention of writing, called “pre-history.” To the contrary, as Collingwood puts it:

“A consequence of the error which regards history as contained ready-made in its sources is the distinction between history and prehistory. From the point of view of this distinction, history is coterminous with written sources, and prehistory with the lack of such sources. It is thought that a reasonably complete and accurate narrative can only be constructed where we possess written documents out of which to construct it, and that where we have none we can only put together a loosely assemblage of vague and ill-founded guesses. This is wholly untrue: written sources have no such monopoly of trustworthiness or informativeness as is here implied, and there are very few types of problems which cannot be solved on the strength of unwritten evidence” (1946, pg. 372).

Diamond opens his book with a question asked of him by Yali, a New Guinean whom the author met while undertaking biological research on the island: Why is it that Europeans have so much more “stuff” than New Guineans? He laments that most professional historians “are no longer even asking the question” (pg. 15). It doesn’t seem to occur to him that the reason for that might be that it is not an historical question. If history consists in showing how the occurrence of some unique event in the past is made intelligible by the particular circumstances that led up to it, then it is categorically unable to address such questions as “Why are Europeans generally wealthier than New Guineans?” As Oakeshott says:

“[The] alleged task is to discern [an historical event’s] ‘true’ character by coming to understand it as an example of the operation of a ‘law of history’ or a ‘law of historical change.’ In order to perform this task [the historian] must equip himself with such a ‘law’ or ‘laws.’ And he is said to do this in a procedure of examining (and perhaps comparing) a number of such occurrences and situations and coming to perceive them as structures composed of regularities. But this, also, is clearly a mistake: no such conclusion could issue from such a procedure. What this ‘historian’ needs and what he must devise for himself is a collection of systematically related abstract concepts . . . in terms of which to formulate ‘laws.’ How he may set about this enterprise we need not enquire . . . But what is certain is that they cannot be laws of ‘history’ or ‘historical change’ because they do not and cannot relate to the circumstantially reported situations he designs to explain, but only to model-situations abstracted from them in terms of these ‘laws.’ In short, the distinction between such a model-situation (explicated in terms of regularities) and a circumstantially reported situation is not a difference of truth and error; it is an unresolvable categorical distinction” (1983, pp. 81–82).

In the same vein, Mises notes, “The notion of a law of historical change is self-contradictory. History is a sequence of phenomena that are characterized by their singularity. Those features which an event has in common with other events are not historical” (1957, pg. 212).

Diamond does not comprehend the nature of historical inquiry, rendering his attempt to replace what he has failed to understand with his own brand of “scientific history” badly misguided. Nevertheless, I believe that he quite usefully has described a number of common patterns in human affairs. The economist Tony Lawson calls such patterns “demi-regs,” by which he means “a partial event regularity which prima facieindicates the occasional, but less than universal, actualization of a mechanism or tendency, over a definite region of time-space” (1997, pg. 204).

But Diamond fails to realize the contingent nature of all such regularities in the social world. As Lawson notes,

“in the social realm, indeed, there will usually be a potentially very large number of countervailing factors [to any particular cause] acting at any one time and/or sporadically over time, and possibly each with varying strength. . . . [And] the mechanisms or processes which are being identified are themselves likely to be unstable to a degree over time and space. . . . Indeed, given the fact of the dependence of social mechanisms upon inherently transformative human agency, where human beings choose their courses of action (and so could always have acted otherwise), strict constancy seems a quite unlikely eventuality” (1997, pp. 218–19).

One of Diamond’s chief motivations in writing the book under review seems to have been to discredit racial explanations of the course of history. However, if he had comprehended the true character of historical explanation, he would have seen that he was battling a chimera. Race can no more substitute for genuine historical understanding than can geography. How could it possibly explain the concrete particularities of history, when the past presents us with Germans as different as Johann Goethe and Adolf Hitler, Jews as dissimilar as Karl Marx and Ludwig von Mises, Irishmen as far apart as James Joyce and Gerry Adams, Chinese as divergent as Lao Tsu and Mao Tse Tung, blacks like George Washington Carver and Idi Amin, and so on.

Conclusion

Mises categorized the type of history Diamond proposes as “environmentalism.” He said of it, “The truth contained in environmentalism is the cognition that every individual lives at a definite epoch in a definite geographical space and acts under the conditions determined by this environment.” But, he goes on to note the flaw inherent in all attempts to regard the environment as the “ultimate cause” of historical events: “The environment determines the situation but not the response. To the same situation different modes of reacting are thinkable and feasible. Which one the actors choose depends on their individuality” (1957, pg. 326).

Diamond, I believe, has discovered some very interesting “demi-regularities” in the human past. But he has not realized that, quite apart from the search for such demi-regs, there is a different and quite legitimate discipline called history that concerns itself with discovering the particular antecedents of some unique going-on that explain its occurrence, based on critically analyzing artifacts from the past that have survived into the historian’s present.

As I mentioned in the introduction, Diamond’s mistake is not merely of concern to scholars. The view that “vast, impersonal forces” largely determine the course of history, whether those forces are taken to be "the material conditions of production," as in Marxism, or geographical circumstances, as in Diamond, naturally suggests that individuals can do little to affect their own future. As a logical consequence, in order to improve the lives of those who have been dealt a poor hand by those forces, it seems necessary to counteract them with another vast, impersonal force, namely, the State. Huge international programs intended to redress the arbitrary outcomes brought about by historical forces are recommended. The cases of countries with few geographic advantages but relatively free economies, such as Japan, prospering, and those of nations blessed with natural resources but ruled by highly interventionist governments, for example, Brazil or Nigeria, lagging behind, are easily dismissed as anomalies by those who are convinced that human action plays an insignificant part in history.

While Diamond’s book is filled with valuable insights, it is not, as he would like to believe, the first step in the reformation of history along more “scientific” lines, but only another interesting vantage point from which to contemplate humanity’s past. Furthermore, the policy implications of his overreach are a danger to both human welfare and freedom.

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Gene Callahan is studying at the London School of Economics. He is the author of Economics for Real People. Send him MAIL, and see his Mises.org Daily Articles Archive. Post Comments on the blog.

References

Collingwood, R.G. (1946) The Idea of History, Oxford, England: Oxford University Press.

Diamond, J. (1998) Guns, Germs and Steel: A Short History of Everybody for the Last 13,000 Years, London: Vintage.

Green, P. (1992) Alexander of Macedon 356-323 B.C.: A Historical Biography, Berkely, Los Angeles, Oxford: University of California Press.

Lawson, T. (1997) Economics and Reality, London and New York: Routledge.

Liebowitz, S. and S.E. Margolis (1996) "Typing Errors?" Reason Magazine, June issue.

Mises, L. von (1957) Theory and History, Auburn, Alabama: Ludwig von Mises Institute.

Nock, A.J. (1935) Our Enemy the State.

Oakeshott, M. ([1933] 1985) Experience and Its Modes, Cambridge, England: Cambridge University Press.

— (1983) On History, Oxford, England: Basil Blackwell Publisher Limited.

Rothbard, M. (1978) For a New Liberty: The Libertarian Manifesto.

1 Diamond prefers to regard Europe and Asia, with which he includes North Africa, as a single large region, a choice that appears quite reasonable when one considers a map of the world as well as the long and significant cultural connections between European, Asian, and North African cultures.

2 The deductive-nomological model of science claims that a genuinely scientific explanation of an event consists in deducing the occurrence of the event from a set of empirical laws and initial conditions. It is also called the covering law model.

My last wishes...

2005-03-22T05:36:49Z

From Rachel Mills' LiveJournal:

All this talk of Terry Schiavo, and how squirelly husbands can be, has prompted me to want to declare publicly my wishes regarding life support should something awful happen to me.

I have no interest in donating my organs. Please do not desecrate my body. God made it. It is sacred the way it is. Hands OFF!

I wish to be resuscitated as many times as it takes. If I am injured or in a coma, please be patient with me. I will come around. I am trying hard and fighting. I am a survivor. Please respect that and keep trying.

Should I be incapacitated for an extended period of time, I want the most advanced forms of life support available from modern medicine. I don't care how hopeless the diagnosis is, or my quality of life. Life is sacred, in any way, shape or form that God chooses to bless me with it.

Spare no expense to keep me here. Mortgage the house, mortgage my parents house, my brothers' houses where they raise their children, my aunts and uncles should all sacrifice and pull together. And when my entire extended family's wealth is completely tapped, I want whatever legal remedies are due me. Sue everyone, the doctors who tried to help me, the ambulance people, the nurses who were on duty if you have to. The manufacturers of whatever drug they tried that failed me. Somewhere someone forgot to cross an I or dot a T and THEY SHOULD PAY. This is my LIFE we're talking about here. Save me. Save precious, priceless me. The world will be a bit sadder, a bit greyer, a bit *less* for the loss of me. Even if I'm just crapping my pants and grimacing like a retard, I guarantee, the magic of me touches all around me. Especially those that give me sponge baths, lucky them.

My husband promised himself to me in sickness and in health. I expect that to be honored indefinitely. I would expect a PI to be hired to occasionally check up on him and if he attempts in any way to move on with his life, even if my brain has died, been re-absorbed by my body and replaced with puss, leaving no hope for any chance of recovery, sue him too. Enlist Congress if you have to. The fact that he doesn't honor his sacred vows which he took before God and our loved ones all but PROVES it was probably him that put me in the condition I am in. Nothing to do with my own bulemia and the potassium imbalance or anything else that could explain it. He's lost his wife and a mere 10 years later he has the audacity to want normalcy and a family? Nail him to the wall. I could NEVER be replaced! Once he married me, he is committed for life! Committed, even in the institutional sense, if appropriate. Even if it makes him absolutely freaking miserable and taps all his financial resources. That is what I demand. I told him that as a condition of our engagement and he agreed!

...at least I THINK I mentioned it. I could've sworn.

Anyway, that's what I want should I become a drooling, bed-crapping, grimacing vegetable. I want Acts of Congress, my family at war, and my husband utterly miserable and his life totally at a stand still.

Because life is sacred and I'm worth it. World, take note.

If Terry Schiavo was such a great person, is this what she would say if she could have predicted her future? Her parents view of her is certainly offensive, in my opinion.

Tip on Retirement Savers Credit: The Difference Between an AGI of $15,000.50 and $15,000.51

2005-03-07T03:33:12Z

The Retirement Savers Credit can be claimed using form 8880. Depending on one's marital situation and income (no-more than $50k), one may be able to obtain the savers credit. This credit can reduce the taxes the State will steal from you to $0, but it cannot get you a subsidy (State-payout). It can be used whether or not you itemize your 1040 or 1040A, but cannot be used with a 1040EZ. However, there are a few snags to think about when planning ahead. Before explaining them, let me briefly over-view what is required to be able to claim the credit:

Adjusted Gross Income must be less than:
- $25k if single
- $50k if married, filing jointly
- $37.5k if head of household
Must have made contributions to a qualified retirement plan, such as a Traditional IRA, Roth IRA, 401(k), 403(b), etc.
Cannot be claimed as a dependant on someone elses' tax-returns.
Cannot be younger than 18.
Cannot be a full-time student.

The way the tax-credit works is that you get a credit for a fraction of the lower of either your contributions to retirements savings plans or $2,000. What fraction is multiplied by $2,000 or your retirement-contributions (whichever is lower) is determined by your income and filing-status. Here's a table summarizing it:

Credit rate	Adjusted GrossIncome Limit			Maximum Credit
Credit rate	Single; widow(er); married, filing separate	Married, filing jointly	Head of household	Maximum Credit
50%	AGI ≤ $15,000	AGI ≤ $30,000	AGI ≤ $22,500	$1,000
20%	$15,000 < AGI ≤ $16,250	$30,000 < AGI ≤ $32,500	$22,500 < AGI ≤ $24,375	$400
10%	$16,250 < AGI ≤ $25,000	$32,500 < AGI ≤ $50,000	$24,375 < AGI ≤ $37,500	$100
0%	AGI > $25,000	AGI >$50,000	AGI > $37,500	$0

Many of you probably already see what I'm about to talk about. If you're single and your Adjusted Gross Income is $15,000.49, you can get a maximum of an $1,000 credit; this is because you're allowed to round on your 1040 or 1040A, so it rounds down to $15,000 (the choice to round or not round has to be for all fields). However, if you're single and your Adjusted Gross Income is $15,000.50, your maximum credit is $400: A 600 dollar difference for one extra cent! (This is something I find extremely idiotic). It is highly unlikely that many will be that close to the margin; however, it is entirely within the realm of probability that there will be many $10, $20, $50 away from the difference between a $1,000 credit and a $400 credit.

One way to get around this grave annoyance would be to see if you can lower your AGI. Tax-deferred contributions to a Traditional IRA, 401(k), 403(b), etc would be one way to do that. A common strategy for the forward-oriented is to max-out contributions to a 401(k)/403(b) and max out contributions to a Roth IRA (the contributions of which are not tax-deductible, but grow tax-free not tax-deferred). Currently, the maximum that one can contribute to a Roth and Traditional IRA together is $4,000. This means that money contributed to a Roth IRA reduces the possible money one can contribute to a Traditional IRA. Thus, for someone on the margins of a percentage-break in this tax-credit, it may be adviseable to consider diverting the minimum amount of Roth IRA contributions to a Traditional IRA so as to set one up (see this thread on BenefitsLink for a discussion of the minimum required startup amounts for IRAs). Thereafter, you can contribute solely to your Roth IRA; if you foresaw falling on the margins of a break-point again, you could divert the minimum amount from you Roth IRA (which does not lower AGI) to your Traditional IRA (which does lower AGI) so as to make the breakpoint.

This obviously makes tax-deferred retirement contributions more valuable, ceteris paribus; thus, you may have to re-evaluate the desireability of Roth IRAs vs. Traditional IRAs, if you are at the margins of the saver's credit breakpoints, or within $4,000 dollars of being at a breakpoint. Consider, for example, if you're single and your income is $33,000. Maxing out 401(k) or 403(b) contributions would provide a downward adjustment of $14,000 (AGI would thus be $19,000). You now have $4,000 dollars to contribute to a Roth IRA or Traditional IRA. An $4,000 contribution to a Traditional IRA would reduce your AGI to $15,000, while a $4,000 contribution to a Roth IRA would not change your AGI. You now have to decide if the benefits of the Roth IRA's tax-free growth are worth (to you) the costs of a $4,000 tax-deduction (which lowers your taxes by a fraction of $4,000, depending on your tax-rate) and a $1,000 tax-credit. I say to you, because the subjective costs may be different to two different people in the exact same situation, because of differing time-preferences. The more you value that $1,000 tax-credit and $4,000 deducitlbe now, the less the subjective benefits of tax-free growth (which will be reaped in retirement) will be. The shorter your time-horizon on your retirement funds, the more attractive the benefits of this course of action, as well. How well you expect your investments to perform, and whether you expect taxes to go up or down (the safe bet's on the former) also play into the decision, along with your current effective tax-rate and your expected future effective tax-rate.

Moving away from that example, the other thing you have to decide is if figuring out all of this stuff is worth it to you ex-ante: That is, do your expected subjective costs of doing such exceed your expected subjective benefits. Put another way, the work of all this may be worth it to many people to save $1,000; but it probably won't be worth it to anybody -- except someone with an extreme neurosis -- to save $1.

Recharacterization: Up until Apri 15th, you can still recharacterize Roth IRA contributions for the prior year (the year for which you're paying taxes) to Traditional IRA contributions. If doing this and opening up a new Traditional IRA with that company, you'll have to recharacterize the minimum to open up a Traditional IRA (varies from company to company, but again see my prior ref to a BenefitsLink thread). Thereafter, to engage in this kind of strategy, you'll only have to recharacterize the precise amount that you need (or the nearest rounded up amount thereof that your financial institution will allow you to recharacterize) in order to get your AGI down to a Retirement Savers Credit breakpoint. It is probably most wise to figure out what you need to recharacterize (if anything) after the year for which you're paying taxes ends, so that you don't recharacterize anything more than you need to in order to get the credit.

Our Fascist State and Martha Stewart

2005-03-07T00:10:28Z

Now that the State has finished the fascist imprisonment of Martha Stewart for engaging in non-crimes, they've committed her to house-arrest, as if she's some kind of dangerous criminal. This is clearly a ludicrous attempt by the State to embarrass, humble, and humiliate Ms. Stewart. However, she is apparently of such high dignity that she apparently let this atrocious miscarriage of justice depress her spirits. Much has been made about the treatment Stewart has received upon being released from prison: having a chartered plane ready for her, having more latitude than most criminals under house-arrest, etc. Of course, regarding her jet, she's earned that by providing value to millions of people; as for her relative freedom on house-arrest -- having a "longer leash" than most on house-arrest -- such ignores the fact that Ms. Stewart hasn't harmed anyone, and is not a dangerous person who needs to be monitored.

125 and still rational

2005-03-05T22:25:34Z

Maria Olivia da Silva recently celebrated her 125th birthday. At 125, she's the oldest woman alive. Here's a pic:

Animal spirits

2005-03-04T17:24:41Z

Well, the old Keynesian kind of tripe seems to be ripe in the discussion of the gold markets. Every day, on Kitco.com, there are links to articles that discuss gold-prices. And most of these articles are junk. This isn't the fault of Kitco.com -- they're just linking to what exists; Kitco actually provides some good analysis, as you can see from the Kitco Contributed Commentaries. However, the articles under Latest Gold News are almost always filled with, essentially, talk of "animal spirits". Consider Metals stage payrolls-inspired rally:

"Gold surged right after the employment numbers and that shows gold is defying the typical expectations," said Kevin Kerr of Kerr Trading International...

"I think we have moved into a new realm for gold as it finds its own way and charts a new path with investors," Kerr said. "I think now we are setting up to test $475 very soon"...

Does that sound particularly meaningful? No. That's because it isn't. This kind of talk contributes to the idiotic idea that the gold-market (and other markets, including the stock- and bond-market) are driven by "animal spirits", as Keynes said. They talk about "testing certain price-levels", as if Gold itself had some kind of will, or as if investors simply go by trial and error -- throwing any old prices out there -- to "test out". Kerr has made a number of statements like that. Just yesterday, it was the same kind of statements, but in a more conservative direction. Maybe by the end of today, if gold-prices head down, they'll be "testing" the 425 level. Here's what he said yesterday:

Kevin Kerr of Kerr Trading International called the recent pattern in gold "backing and filling."

Trading such as this is "healthy for the bull market and is actually quite a positive sign for gold to test the elusive $450 level on the next round of dollar weakness," he said.

What's sorely missing is any kind of fundamental analysis. This guy has noticed patterns in trading, a particularly banal observation. Yes, prices go up and down. Of course, it is unlikely that daily commentary will provide fundamental analysis. Fundamental analysis requires more than simply noting patterns -- which any child can do -- or reporting the latest of the latest. It requires integrating and analyzing what's actually going on. Hayek did consider prices to be "information" in a sense, a mechanism to relay information. However, they relay information in a very narrow manner. To notice that the price of something is going up is useful, because it means we should conserve more on that. However, this tells us nothing about the driving cause: Increased demand? Decreased supply? How, why, and where specifically? Of what nature, more temporary or more permanent? These are all questions that require actual thorough research.

This is a condemnation of a way of talking about the markets, not specifically of Mr. Kerr (who may engage in fundamental analysis elsewhere). Mr. Blumert deals with this kind of non-sense in The 'Hardly Noticed' Rally and Burt's Gold Page.

PS: In light of Mr. Kerr's comment, I'd like to emphasize that my criticism here is about a way of talking about markets, and I'd like to apologize to Mr. Kerr for only so briefly highlighting this in my original message. From Mr. Kerr's comments, it seems like he may use these kinds of phrases once or twice, then explain what's really going on with fundamental analysis. However, apparently, those doing the reporting only wish to report on the punch-line summaries. Perhaps the many of people who are quoted in these daily pandamoniums are harmed as well, as their common image with the public is precisely what I described above.

Is the Market Really Efficient?

2005-03-01T03:41:34Z

This is a brilliant essay by Philip Fischer that I've transcribed from Common Stocks and Uncommon Profits and Other Writings, the third book, Developing and Investment Philosophy.

Is the Market Efficient

Philip A. Fischer

By the coming of the 1970's nearly all of my investment philosophy was firmly in plce, molded by my experience of four prior decades. It is not coincidence that with only one exception all of both the wise and the foolish actions I have mentioned as examples that helped form the background of this phiosophy were incidents that occured during these four prior decades. This does not mean that I have made no mistakes in the 1970's. Unfortunately, it seems that no matter how hard I try, sometimes I must stub my toe more than once in the same way before I truly learn. However, in the examples I have used I usually took the first instance when a particular type of event happens to illustrate my point, which explains why all but one of the examples I used occured during these earlier periods.

It might be helpful to notice the striking parallels in each of these past ten-year periods. With the possible exception of the 1960's, there has not been a single decade in which there was not some period of time when the prevaling view was that external influences were so great and so much beyond the control of individual corporate managements that even the wisest common stock investments were foolhardy and perhaps not for the prudent. In the 1930s there were years when this view, influenced by the Great Depression, was at its most extreme, but perhaps not any more than the fear of what the German war machine and World War II might do in the 1940's, or the certainty that another major depression would hit in the 1950's, or fear of inflation, hostile government action, etc., in the 1970's. yet every one of these periods created investment opportunities that seemed almost incredible with all the advantages of hindsight. In each of these five decades there were not a few, but many common stock opportunities that ten years alter yielded profits running to many hundreds of percent for those who had bought and stayed with the shares. In some instances profits ran well into the thousands of percent. Again in every one of these five decades some stocks which were the speculative darlings of the moment were to prove the most dangerous kind of trap for those who blindly followed the crowd rather than those who really knew what they were doing. All of these ten-year periods essentially resembled the others in that the greatest opportunities came from finding situations that were extremely attractive but that were undervalued because at that particular moment the financial community had significantly misjudged the stiuation over this fifty-year period and at the great waves of public optimism and pessimism that succeeded each other over this time span, the old French proverb, Plus ca change, plus c'est la meme chose (the more things change, the more they remain the same), comes to mind. I have not the slightest doubt that as we enter the emerging decade of the 1980's, with all the problems and the prospects that it now offers, the same will continue to hold true.

The Fallacy of the Efficient Market

In the last few years, too much attention has been paid to a concept that I believe is quite fallicious. I refer to the notion that the market is perfectly efficient. Like other false beliefs in other periods, a contrary view may open up opportunities for the discerning.

For those unfamiliar with "efficient" market theory, the adjective "efficient" does not refer to the obvious mechanical efficiency of the market. A potential buyer or seller can get his order to the market where a transaction can be executed very effectively within a matter of a couple of minutes. Neither does "efficiency" refer to the delicate adjustment mechanism which causes stock prices to move up or down by fractions of a point in response to modest changes in the relative pressure of buyers and sellers. Rather, this concept holds that at any one time the market "efficient" prices are assumed to reflect fully and realistically all that is known about the company. Unless someone has some significant, illicit inside information, there is no way genuine bargains can be found, since the favorable influences that make a potential buyer believe that an attractive situation exists are already reflected in the price of the stock!

If the market was as efficient as it has become fashionable to believe, and if important opportunities to buy or significant reasons to sell were not constantly occuring, stock returns should not subsequently have the huge variations that they do. By variation, I am not referring to changes in prices for the market as a whole, but rather the dispersion of realtive price changes of one stock against another. If the market is efficient in prospect, then the nexus of analysis that leads to this efficiency must be collectively poor.

Efficient market theory grew out of the academic School of Random WAlekrs. These people found that it ws difficult to identify technical trading strategies that worked well after transactions costs to provide an attractive profit relative to the risks taken. I don't disagree with this. As you have seen, I believe that it is very, very tough to make money with an out trading based on short-term market forecasts. Perhaps the market is efficient in this narrow sense of the word.

Most of us are or should be investors, not traders. We should be seeking investment opportunities with unusual prospects over the long run and avoiding investment opportunities with poorer prospects. This has always been the central tenet of my approach to investments in any case. I do not believe that prices are efficient for the diligent, knowledgeable, long-term investor.

Directly applicable to this is an experience I had in 1961. In the fall of that year, as in the spring of 1963, I undertook the stimulating duty of substituting for the regular finance professor in teaching the senior course of investments at Stanford University's Graduate School of Business. The concept of the "efficient" market was not to see the light of day for many years to come and had nothing to do with my motivation in the exercise I am about to describe. Rather, I wanted to show these students in a way they would never forget that the flucations of the market as a whole were insignificant compared to the differences between changes in price of some stocks in relation to others.

I divided the class into two groups. The first group took the alphabetical list of stocks on the New York Stock Exchange, starting with the letter A; the second group, those starting with the letter T. Every stock was included in alphabetical order (except preferreds and utilities, which I consider to be a different breed of cats). Each student was assigned four stocks. EAch student looked up the closing price as of the last day of business of 1956, adjusted for the stock dividends and stock splits (rights were ignored as not having sufficient impact to be worthy of the additional calculations), and compared this price with the price as of Friday, October 13th (if nothing else, a colorful closing date!). The percentage increase or decrease that occured in each stock over this period of almost five years was noted. The Dow Jones averages rose from 499 to 703, or by 41 percent in this period. Altogether, there were 140 stocks in this sample. The results are displayed in the following table:

Percentage Capital Gain or Loss	No. of Stocks in Group	Percentage of Total Gropu
200% to 1020% gain	15 stocks	11%
100% to 199% gain	18 stocks	13%
50% to 99% gain	14 stocks	10%
25% to 99% gain	21 stocks	15%
1% to 24% gain	31 stocks	22%
Unchanged	3 stocks	2%
1% to 49% loss	32 stocks	23%
50% to 74% loss	6 stocks	4%
Net	140 stocks	100%

These date are quite insightful. In a period when the Dow Jones averages rose 41 percent, 38 stocks, or 27 percent of the total, showed a capital loss. Six of them, or 4 percent of the total, recorded a loss of over 50 percent in their total value. In contrast, roughly one quarter of the stocks realized capital gains that would have been considered spectacular.

To drive the point home, I noted that if a peron invested $10,000 in equal amounts in the five best stocks on this list, at the outset of this four and three-quarter year period, his capital would now be worth $70,260. On the other hand, if he had invested the $10,000 in the f ive worst stocks, his capital would have shrunk to $3,180. These extreme results were most unlikely. It would take luck, either good or bad, as well as skill, to hit either of these extremes. It would not be so implausiable for a person with real judgement to have picked five out of the ten best stocks for his $10,000 investment, in which case his net worth on Friday the 13th would have been $52,070. Similarly, some investors consistently select stocks for the wrong reason and manage to pick lemons. For them selecting five out of the ten poorest in performance is also not an entirely unrealistic expectation of results. In that case, the $10,000 investment would have shrunk to $4,270. On the basis of this comparison, there might be, in less than five years, a difference of $48,000 between a wise and an unwise investment program.

A year and a half later, when I also taught this same course, I repeated the exact same exercise, with the exception that instead of using the letters A and T, I selected two different letters in the alphabet from which to form the sample of stocks. Again, over a five-year time frame, but with a different starting and different closing date, the degree of variation was almost exactly the same.

Looking back on most markets of five-year duration, I believe that one can find stock performance results that are about as disparate. Some of this dispersion may come as the result of surprises -- important new information about a stock's prospects that could not be reasonably foreseen at the outset of the period. Most of the differences, however, can be anticipated at least roughtly both in terms of direction and general magnitude of gains and losses relative to the market.

The Raychem Corporation

In view of this kind of evidence, it is hard for me to see how anyone can consider the stock market efficient, again using the word "efficient" as it is used by the proponents of this theory. But to belabor the point further, let me take a stock market situation of just a very few years ago. In the early years of the 1970's, the shares of the Raychem Corporation had considerable prestige in the market place and were accordingly selling at a relatively high price-earnings ratio. Some of the reasons warranting this prestige may be perceived by some comments made b y the company's Executive Vice President, Robert M. Halperin. In outlinining what he called the four cardinal points to Raychem's operating philosophy, he stated:

Raychem will not do anything technically simple (i.e., something that would be easy for potential competitors to copy).
Raychem won't do anythign unless it can be vertically integrated; that is, Raychem must conceive the product, manufacture it, and sell it to the customer.
Raychem won't do anything unless there is substantial opportunity for real proprietary protection, which generally means patent protection. Unless this occurs, research and development energies will not be employed on a project, even though toherwise it might fit Raychem's skills.
Raychem will only go into new products when it believes it can become the market leader in whatever niche, sometimes smaller, sometimes larger, that product attempts to capture.

By the mid-1970's, awareness of these unusual strengths was sufficiently prevalent among those who controlled large institutional funds so that sizeable blocks of shares had been taken out of the market by people who believed that Raychem was a situation of unusual competitive strength and attractiveness. However, it was another aspect of this company that gave Raychem its greatest appeal to these holders and was probably the cause fo the high price-earnings ratio at which it was then selling. Many considered that Raychem, which was spending an above average percentage of sales on new project development, had perfected a research organization capable of producing an important enough stream of new products so that the company could be depended on to show an uninterrupted upward trend in sales and profits. These research rpoducts had quite justifiably a special appeal to the financial community because many of the newer ones only indirectly competeted with older products of other companies. Primarily, the new products enabled high-priced labor to do the same job in considerably less time than had previously been required. There were enough savings offered to the ultimate customer of these products to justify a price which should afford Raychem a pleasing profit margin. All this caused the stock twoard the end of 1975 to reach a high of over $42.5 (price adjusted for subsequent stock splits) -- a level about 25 times the estimated earnings for the fiscal year ending June 30, 1976.

Raychem, Dashed Expectations, and the Crash

Toward the close of the June 30, 1976, fiscal year, Raychem was hit by two hammer blows, which were to play havoc with the price of the stock and with the company's reputation in the financial community. The financial community had become very excited about a proprietary polymer, Stilan, which enjoyed unique advantages over other compounds used by the airplane industry for coating wire and which was then in the final research stages. Furthermore, the polymer was to be the first product in which RAychem would go basic, that is, make hte original chemicals in its own plant rather than buying raw materials from others and compounding them. Because of the appeal of the product, Raychem had allocated by a considerable margin more funds to this research product htan to any other in its history. The financial community assumed this product was already on its way to success, and after passing through the unusual "learning curvea" experienced by all new products it would become highly profitable.

Actually, quite the opposite was occuring. In the words of Raychem management, Stalin was "a scientific success but a commercial failure." Improved products of an able competitor, while technically not as desireable as Stilan, proved adequate for the job and were far cheaper. Raychem management recognized this. In the course of a relatively few weeks, management reached the painful decision to abandon the product and write off the heavy investments made in it. This resulting charge to earnings for that fiscal year was some $9.3 million. T his charge-off caused earnings, exclusive of some offsetting special gains, to drop to $0.08 a share from $7.95 the previous fiscal year.

The financial community was as much upset by the erosion of the great confidence in the company's research ability as by the precipitous drop in earnings. Largely ignored was the basic rule that some new product developments are bound to fail in all companies. This is inherent in all industrial research activity and in a well-run company is far more than offset in the long run by other successful new products. It may have been just bad luck that the particular project on which the most money had been spent had been the one to fial. At any rate, the effect on the stock price was dramatic. By the fourth quarter of 1976, the stock had dropped to al ow of approximately $14.75 (again adjusted for subsequent splits amounting to six to one) or to approximately one-third its former high. Of course, only a tiny amount of stock could be bought or sold at the low point for the year. Of greater impact, the stock was available at prices only moderately above this low level for months thereafter.

Another development also affected the profits of the compnay at this moment and contributed to Raychem's fall from favor. One of the most difficult tasks for those responsible for the success of any growing compnay is to change the management structure appropriately as the company grows to allow for the difference between what is needed for proper control of small companies and optimum control of big companies. Until the end of the 1976 fiscal year, Raychem management had been set up along the divisional lines based largely on manufacturing techniques; that is, on the basis of the products produced. This worked well when the company was smaller, but was not conducive to serving the customer most efficiently as the company was growing. Therefore, at about the end of the 1975 fiscal year, top Raychem management started working on a "big compnay" management concept. THe firm restrucured the divisions by the industry served rather than by the physical and chemical composition of the products being manufactured. The target date to make the change was at the end of the 1976 fiscal year. This was done at a time when there was not hte least thought within the management that this date would coincide with the time of the huge write-off for the abandonment of Stilan.

Everyone in Raychem knew that when the organizational change was to occur there would be at least one quarter and probably a minimum of two of subsequently reduced earnings. While making these changed caused almost no change in the individuals on the Raychem management payroll, so many people now had different superiors, different subordinates, and different co-workers with whome they had to interface their activities that a time of inefficiency and adjustment was bound to occur until Raychem employees learned how best to coordinate their work with the new faces with whome they were now dealing. Perhaps no stronger indication could have existed to justify long-range confidence in this company or to indicate that management was not concerned with short-term results than its decision to go ahead with this project as planned rather than to postpone what was bound to be a second blow to Raychem's current earnings.

Actually, this significant change worked with considerably less difficulty than had been anticipated. As expected, the first-quarter earnings of the new fiscal year were much lower than would have been the case if the change had not been made. However, the change was working so well that as the second quarter progressed, the short-term costs of what had been done had largely been eliminated. Fundamentally these developments should ahve been considered bullish by analysts. Raychem was now in a position to handle the growth properly in a way that could not have been done before. It had successfully hurdled a barrier of the type that is most apt to dull the luster of otherwise attractive growth companies. By and large, the financial community did not seem to recognize this, however, and instead the temporary further shrinkage of earnings was just one more factor holding the stock at the low levels to which it had fallen.

Making these price levels even more attractive to potential investors was another influence that I have seen happen in other companies shortly after they had abandoned a major research project that had proved unsuccessful. One financial effect of the abandonment of Stilan was that a sizeable amount of money that had heretofore been devoted to that project was now free to be allocated elsewhere. Even more important, it had similarly freed the time of key research people for other endeavors. Within a year or two much like a field of flowers starting to bloom where rain follows drought, the company began to enjoy what was possibly a greater number of attractive research projects in relation to its size than had ever before been experienced.

Raychem and the Efficient Market

Now what has Raychem's situation to do with the theory of an "efficient market" that has recently gained such a following in certain financial quarters? According to that theory, stocks automatically and instantly adjust to whatever is known about a company, so that only those who might possess illicit "inside information" that is not known to others could benefit from what might lie ahead for a particular stock. In this instance, at the drop of a hat, the Raychem management would and did explain to anyone interested all the facts I have justed cited and explained how temporary they believed was the period of poor earnings.

Actually, well after all this had happened and when profits were climbing to a new all-time high level, the Raychem management went even further. On January 26, 1978, they held a long one-day meeting at their headquarters which I had the priviledge of attending. Racyehm management invited to this meeting the representatives of all institutions, brokerage houses, and investment advisors who either had any interest in Raychem or they thought might have. At this meeting the ten most senior executives of Raychem explained with what I believe was extreme frankness and in detail, such as I have only occasionally seen at similar meetings of other companies, the prospects, the problems, and the current status of Raychem matters under their jurisdiction.

In the year or two following this meeting, Raychem's earnings growth developed exactly as might have been inferred from what was said there. During that period, the stock was to much more than double from the price of $23.25 at which it was selling that day. yet in the weeks immediately following this meeting, there was no particular effect on the stock whatsoever. Some of those present were obviously under the influence of the double shock that they had experienced a year or two before. They obviously mistrusted what was being told them. So much for the theory of an efficient market.

What kind of conclusion does the investor or the investment professional reach from experiences like Raychem? By and large, those who have accepted and been influenced by this theory of the "efficient market" fall into two groups. One is students, who have had a minimum of practical experience. The other, strangely enough, seems to be many managers of large institutional funds. The individual private investor, by and large, has paid relatively little attention to this theory.

From this experienced gained in applying my personal investment philosophy, I would conclude that in my field of technological stocks, as the decade of the 1970's comes to and end, there would therefore be more attractive opportunities among the larger companies, the market for which is dominated by the institutions, than among the small technological companies where the individual private investor plays a considerably bigger role. Just as some ten years years earlier those who recognized the folly of the then prevailing concept of the two-tier market benefited from recognizing that particular nonsense for what it was, so in each decade false ideas arise creating opportunities for those with investment discernment.

An Introduction To The Hermetic Art Of Memory

2005-02-15T15:18:13Z

By John Michael Greer

Part One: The Uses of Memory

In the current occult revival, the Art of Memory is perhaps the most thoroughly neglected of all the technical methods of Renaissance esotericism. While the researches of the late Dame Frances Yates1 and, more recently, a revival of interest in the master mnemonist Giordano Bruno2 have made the Art something of a known quantity in academic circles, the same is not true in the wider community; to mention the Art of Memory in most occult circles nowadays, to say nothing of the general public, is to invite blank looks.

In its day, though, the mnemonic methods of the Art held a special place among the contents of the practicing magician's mental toolkit. The Neoplatonic philosophy which underlay the whole structure of Renaissance magic gave memory, and thus techniques of mnemonics, a crucial place in the work of inner transformation. In turn, this interpretation of memory gave rise to a new understanding of the Art, turning what had once been a purely practical way of storing useful information into a meditative discipline calling on all the powers of the will and the imagination.

This article seeks to reintroduce the Art of Memory to the modern Western esoteric tradition as a practicable technique. This first part, "The Uses of Memory," will give an overview of the nature and development of the Art's methods, and explore some of the reasons why the Art has value for the modern esotericist. The second part, "The Garden of Memory," will present a basic Hermetic memory system, designed along traditional lines and making use of Renaissance magical symbolism, as a basis for experimentation and practical use.

The Method And Its Development

It was once almost mandatory to begin a treatise on the Art of Memory with the classical legend of its invention. This habit has something to recommend it, for the story of Simonides is more than a colorful anecdote; it also offers a good introduction to the basics of the technique.

The poet Simonides of Ceos, as the tale has it, was hired to recite an ode at a nobleman's banquet. In the fashion of the time, the poet began with a few lines in praise of divinities -- in this case, Castor and Pollux -- before going on to the serious business of talking about his host. The host, however, objected to this diversion of the flattery, deducted half of Simonides' fee, and told the poet he could seek the rest from the gods he had praised. Shortly thereafter, a message was brought to the poet that two young men had come to the door of the house and wished to speak to him. When Simonides went to see them, there was no one there -- but in his absence the banquet hall collapsed behind him, killing the impious nobleman and all the dinner guests as well. Castor and Pollux, traditionally imaged as two young men, had indeed paid their half of the fee.

Tales of this sort were a commonplace in Greek literature, but this one has an unexpected moral. When the rubble was cleared away, the victims were found to be so mangled that their own families could not identify them. Simonides, however, called to memory an image of the banqueting hall as he had last seen it, and from this was able to recall the order of the guests at the table. Pondering this, according to the legend, he proceeded to invent the first classical Art of Memory. The story is certainly apocryphal, but the key elements of the technique it describes -- the use of mental images placed in ordered, often architectural settings -- remained central to the whole tradition of the Art of Memory throughout its history, and provided the framework on which the Hermetic adaptation of the Art was built.

In Roman schools of rhetoric, this approach to memory was refined into a precise and practical system. Students were taught to memorize the insides of large buildings according to certain rules, dividing the space into specific loci or "places" and marking every fifth and tenth locus with special signs. Facts to be remembered were converted into striking visual images and placed, one after another, in these loci; when needed, the rhetorician needed only to stroll in his imagination through the same building, noticing the images in order and recalling their meanings. At a more advanced level, images could be created for individual words or sentences, so that large passages of text could be stored in the memory in the same way. Roman rhetoricians using these methods reached dizzying levels of mnemonic skill; one famous practitioner of the Art was recorded to have sat through a day-long auction and, at its end, repeated from memory the item, purchaser and price for every sale of the day.

With the disintegration of the Roman world, these same techniques became part of the classical heritage of Christianity. The Art of Memory took on a moral cast as memory itself was defined as a part of the virtue of prudence, and in this guise the Art came to be cultivated by the Dominican Order. It was from this source that the ex-Dominican Giordano Bruno (1548-1600), probably the Art's greatest exponent, drew the basis of his own techniques.4

Medieval methods of the Art differed very little from those of the classical world, but certain changes in the late Middle Ages helped lay the foundations for the Hermetic Art of Memory of the Renaissance. One of the most important of these was a change in the frameworks used for memory loci. Along with the architectural settings most often used in the classical tradition, medieval mnemonists also came to make use of the whole Ptolemaic cosmos of nested spheres as a setting for memory images. Each sphere from God at the periphery through the angelic, celestial and elemental levels down to Hell at the center thus held one or more loci for memory images.

Between this system and that of the Renaissance Hermeticists there is only one significant difference, and that is a matter of interpretation, not of technique. Steeped in Neoplatonic thought, the Hermetic magicians of the Renaissance saw the universe as an image of the divine Ideas, and the individual human being as an image of the universe; they also knew Plato's claim that all "learning" is simply the recollection of things known before birth into the realm of matter. Taken together, these ideas raised the Art of Memory to a new dignity. If the human memory could be reorganized in the image of the universe, in this view, it became a reflection of the entire realm of Ideas in their fullness -- and thus the key to universal knowledge. This concept was the driving force behind the complex systems of memory created by several Renaissance Hermeticists, and above all those of Giordano Bruno.

Bruno's mnemonic systems form, to a great extent, the high-water mark of the Hermetic Art of Memory. His methods were dizzyingly complex, and involve a combination of images, ideas and alphabets which require a great deal of mnemonic skill to learn in the first place! Hermetic philosophy and the traditional images of astrological magic appear constantly in his work, linking the framework of his Art to the wider framework of the magical cosmos. The difficulty of Bruno's technique, though, has been magnified unnecessarily by authors whose lack of personal experience with the Art has led them to mistake fairly straightforward mnemonic methods for philosophical obscurities.

A central example of this is the confusion caused by Bruno's practice of linking images to combinations of two letters. Yates' interpretation of Brunonian memory rested largely on an identification of this with the letter-combinations of Lullism, the half-Cabalistic philosophical system of Ramon Lull (1235-1316).5 While Lullist influences certainly played a part in Bruno's system, interpreting that system solely in Lullist terms misses the practical use of the combinations: they enable the same set of images to be used to remember ideas, words, or both at the same time.

An example might help clarify this point. In the system of Bruno's De Umbris Idearum (1582), the traditional image of the first decan of Gemini, a servant holding a staff, could stand for the letter combination be; that of Suah, the legendary inventor of chiromancy or palmistry, for ne. The decan-symbols are part of a set of images prior to the inventors, establishing the order of the syllables. Put in one locus, the whole would spell the word bene.6

The method has a great deal more subtlety than this one example shows. Bruno's alphabet included thirty letters, the Latin alphabet plus those Greek and Hebrew letters which have no Latin equivalents; his system thus allowed texts written in any of these alphabets to be memorized. He combined these with five vowels, and provided additional images for single letters to allow for more complex combinations. Besides the astrological images and inventors, there are also lists of objects and adjectives corresponding to this set of letter-combinations, and all these can be combined in a single memory-image to represent words of several syllables. At the same time, many of the images stand for ideas as well as sounds; thus the figure of Suah mentioned above can also represent the art of palmistry if that subject needed to be remembered.

Bruno's influence can be traced in nearly every subsequent Hermetic memory treatise, but his own methods seem to have proved too demanding for most magi. Masonic records suggest that his mnemonics, passed on by his student Alexander Dicson, may have been taught in Scots Masonic lodges in the sixteenth century;7 more common, though, were methods like the one diagrammed by the Hermetic encyclopedist Robert Fludd in his History of the Macrocosm and Microcosm. This was a fairly straightforward adaptation of the late Medieval method, using the spheres of the heavens as loci, although Fludd nonetheless classified it along with prophecy, geomancy and astrology as a "microcosmic art" of human self-knowledge.8 Both this approach to the Art and this classification of it remained standard in esoteric circles until the triumph of Cartesian mechanism in the late seventeenth century sent the Hermetic tradition underground and the Art of Memory into oblivion.

The Method And Its Value

This profusion of techniques begs two questions, which have to be answered if the Art of Memory is to be restored to a place in the Western esoteric tradition. First of all, are the methods of the Art actually superior to rote memorization as a way of storing information in the human memory? Put more plainly, does the Art of Memory work?

It's fair to point out that this has been a subject of dispute since ancient times. Still, then as now, those who dispute the Art's effectiveness are generally those who have never tried it. In point of fact, the Art does work; it allows information to be memorized and recalled more reliably, and in far greater quantity, than rote-methods do. There are good reasons, founded in the nature of memory, why this should be so. The human mind recalls images more easily than ideas, and images charged with emotion more easily still; one's most intense memories, for example, are rarely abstract ideas. It uses chains of association, rather than logical order, to connect one memory with another; simple mnemonic tricks like the loop of string tied around a finger rely on this. It habitually follows rhythms and repetitive formulae; it's for this reason that poetry is often far easier to remember than prose. The Art of Memory uses all three of these factors systematically. It constructs vivid, arresting images as anchors for chains of association, and places these in the ordered and repetitive context of an imagined building or symbolic structure in which each image and each locus leads on automatically to the next. The result, given training and practice, is a memory which works in harmony with its own innate strengths to make the most of its potential.

The fact that something can be done, however, does not by itself prove that it should be done. In a time when digital data storage bids fair to render print media obsolete, in particular, questions of how best to memorize information might well seem as relevant as the choice between different ways of making clay tablets for writing. Certainly some methods of doing this once-vital chore are better than others; so what? This way of thinking leads to the second question a revival of the Art of Memory must face: what is the value of this sort of technique?

This question is particularly forceful in our present culture because that culture, and its technology, have consistently tended to neglect innate human capacities and replace them where possible with mechanical equivalents. It would not be going too far to see the whole body of modern Western technology as a system of prosthetics. In this system, print and digital media serve as a prosthetic memory, doing much of the work once done in older societies by the trained minds of mnemonists. It needs to be recognized, too, that these media can handle volumes of information which dwarf the capacity of the human mind; no conceivable Art of Memory can hold as much information as a medium-sized public library.

The practical value of these ways of storing knowledge, like that of much of our prosthetic technology, is real. At the same time, there is another side to the matter, a side specially relevant to the Hermetic tradition. Any technique has effects on those who use it, and those effects need not be positive ones. Reliance on prosthetics tends to weaken natural abilities; one who uses a car to travel anywhere more than two blocks away will come to find even modest walks difficult. The same is equally true of the capacities of the mind. In Islamic countries, for example, it's not at all uncommon to find people who have memorized the entire Quran for devotional purposes. Leave aside, for the moment, questions of value; how many people in the modern West would be capable of doing the equivalent?

One goal of the Hermetic tradition, by contrast, is to maximize human capacities, as tools for the inner transformations sought by the Hermeticist. Many of the elementary practices of that tradition -- and the same is true of esoteric systems worldwide -- might best be seen as a kind of mental calisthenics, intended to stretch minds grown stiff from disuse. This quest to expand the powers of the self stands in opposition to the prosthetic culture of the modern West, which has consistently tended to transfer power from the self to the exterior world. The difference between these two viewpoints has a wide range of implications -- philosophical, religious, and (not the least) political -- but the place of the Art of Memory can be found among them.

From what might be called the prosthetic standpoint, the Art is obsolete because it is less efficient than external data-storage methods such as books, and distasteful because it requires the slow development of inner abilities rather than the purchase of a piece of machinery. From a Hermetic standpoint, on the other hand, the Art is valuable in the first place as a means of developing one of the capacities of the self, the memory, and in the second place because it uses other capacities -- attention, imagination, mental imagery -- which have a large role in other aspects of Hermetic practice.

Like other methods of self-development, the Art of Memory also brings about changes in the nature of the capacity it shapes, not merely in that capacity's efficiency or volume; its effects are qualitative as well as quantitative -- another issue not well addressed by the prosthetic approach. Ordinarily, memory tends to be more or less opaque to consciousness. A misplaced memory vanishes from sight, and any amount of random fishing around may be needed before an associative chain leading to it can be brought up from the depths. In a memory trained by the methods of the Art, by contrast, the chains of association are always in place, and anything memorized by the Art can thus be found as soon as needed. Equally, it's much easier for the mnemonist to determine what exactly he or she does and does not know, to make connections between different points of knowledge, or to generalize from a set of specific memories; what is stored through the Art of Memory can be reviewed at will.

Despite our culture's distaste for memorization, and for the development of the mind generally, the Art of Memory thus has some claim to practical value, even beyond its uses as a method of esoteric training. In the second part of this article, "The Garden of Memory," some of these potentials will be explored through the exposition of an introductory memory system based on the traditional principles of the Art.

Notes for Part 1

1. Yates, Frances A., The Art Of Memory (Chicago: U. Chicago Press, 1966) remains the standard English-language work on the tradition.

2. Bruno, Giordano, On the Composition of Images, Signs and Ideas (NY: Willis, Locker & Owens, 1991), and Culianu, Ioan, Eros and Magic in the Renaissance (Chicago: U. Chicago Press, 1987) are examples.

3. The brief history of the Art given here is drawn from Yates, op. cit.

4. For Bruno, see Yates, op. cit., ch. 9, 11, 13-14, as well as her Giordano Bruno and the Hermetic Tradition (Chicago: U. Chicago Press, 1964).

5. See Yates, Art of Memory, Ch. 8.

6. Ibid., pp. 208-222.

7. Stevenson, David, The Origins of Freemasonry: Scotland's Century (Cambridge: Cambridge U.P., 1988), p. 95.

8. See Yates, Art of Memory, Ch. 15.

Part Two: The Garden of Memory

During the Renaissance, the age in which it reached its highest pitch of development, the Hermetic Art of Memory took on a wide array of different forms. The core principles of the Art, developed in ancient times through practical experience of the way human memory works best, are common to the whole range of Renaissance memory treatises; the structures built on this foundation, though, differ enormously. As we'll see, even some basic points of theory and practice were subjects of constant dispute, and it would be impossible as well as unprofitable to present a single memory system, however generic, as somehow "representative" of the entire field of Hermetic mnemonics.

That is not my purpose here. As the first part of this essay pointed out, the Art of Memory has potential value as a practical technique even in today's world of information overload and digital data storage. The memory system which will be presented here is designed to be used, not merely studied; the techniques contained in it, while almost entirely derived from Renaissance sources, are included for no other reason than the simple fact that they work.

Traditional writings on mnemonics generally divide the principles of the Art into two categories. The first consists of rules for places -- that is, the design or selection of the visualized settings in which mmemonic images are located; the second consists of rules for images -- that is, the building up of the imagined forms used to encode and store specific memories. This division is sensible enough, and will be followed in this essay, with the addition of a third category: rules for practice, the principles which enable the Art to be effectively learned and put to use.

Rules for Places

One debate which went on through much of the history of the Art of Memory was a quarrel over whether the mnemonist should visualize real places or imaginary ones as the setting for the mnemonic images of the Art. If the half-legendary classical accounts of the Art's early phases can be trusted, the first places used in this way were real ones; certainly the rhetors of ancient Rome, who developed the Art to a high pitch of efficacy, used the physical architecture around them as the framework for their mnemonic systems. Among the Hermetic writers on the Art, Robert Fludd insisted that real buildings should always be used for memory work, claiming that the use of wholly imaginary structures leads to vagueness and thus a less effective system.1 On the other hand, many ancient and Renaissance writers on memory, Giordano Bruno among them, gave the opposite advice. The whole question may, in the end, be a matter of personal needs and temperament.

Be that as it may, the system given here uses a resolutely imaginary set of places, based on the numerical symbolism of Renaissance occultism. Borrowing an image much used by the Hermeticists of the Renaissance, I present the key to a garden: Hortus Memoriae, the Garden of Memory.

The Garden of Memory is laid out in a series of concentric circular paths separated by hedges; the first four of these circles are mapped in Diagram 1. Each circle corresponds to a number, and has the same number of small gazebos set in it. These gazebos -- an example, the one in the innermost circle, is shown in Diagram 2 -- bear symbols which are derived from the Pythagorean number-lore of the Renaissance and later magical traditions, and serve as the places in this memory garden.2 Like all memory places, these should be imagined as brightly lit and conveniently large; in particular, each gazebo is visualized as large enough to hold an ordinary human being, although it need not be much larger.

The first four circles of the garden are built up in the imagination as follows:

The First Circle

This circle corresponds to the Monad, the number One; its color is white, and its geometrical figure is the circle. A row of white flowers grows at the border of the surrounding hedge. The gazebo is white, with gold trim, and is topped with a golden circle bearing the number 1. Painted on the dome is the image of a single open Eye, while the sides bear the image of the Phoenix in flames.

The Second Circle

The next circle corresponds to the Dyad, the number Two and to the concept of polarity; its color is gray, its primary symbols are the Sun and Moon, and its geometrical figure is the vesica piscis, formed from the common area of two overlapping circles. The flowers bordering the hedges in this circle are silver-gray; in keeping with the rule of puns, which we'll cover a little later, these might be tulips. Both of the two gazebos in this circle are gray. One, topped with the number 2 in a white vesica, has white and gold trim, and bears the image of the Sun on the dome and that of Adam, his hand on his heart, on the side. The other, topped with the number 3 in a black vesica, has black and silver trim, and bears the image of the Moon on the dome and that of Eve, her hand touching her head, on the side.

The Third Circle

This circle corresponds to the Triad, the number Three; its color is black, its primary symbols are the three alchemical principles of Sulphur, Mercury and Salt, and its geometrical figure is the triangle. The flowers bordering the hedges are black, as are the three gazebos. The first of the gazebos has red trim, and is topped with the number 4 in a red triangle; it bears, on the dome, the image of a red man touching his head with both hands, and on the sides the images of various animals. The second gazebo has white trim, and is topped by the number 5 in a white triangle; it bears, on the dome, the image of a white hermaphrodite touching its breasts with both hands, and on the sides the images of various plants. The third gazebo is unrelieved black, and is topped with the number 6 in a black triangle; it bears, on the dome, the image of a black woman touching her belly with both hands, and on the sides the images of various minerals.

The Fourth Circle

This circle corresponds to the Tetrad, the number Four. Its color is blue, its primary symbols are the Four Elements, and its geometrical figure is the square. The flowers bordering the hedges are blue and four-petaled, and the four gazebos are blue. The first of these has red trim and is topped with the number 7 in a red square; it bears the image of flames on the dome, and that of a roaring lion on the sides. The second has yellow trim and is topped with the number 8 in a yellow square; it bears the images of the four winds blowing on the dome, and that of a man pouring water from a vase on the sides. The third is unrelieved blue and is topped with the number 9 in a blue square; it bears the image of waves on the dome and those of a scorpion, a serpent and an eagle on the sides. The fourth has green trim and is topped with the number 10 in a green square; it bears, on the dome, the image of the Earth, and that of an ox drawing a plow on the sides.

To begin with, these four circles and ten memory places will be enough, providing enough room to be useful in practice, while still small enough that the system can be learned and put to work in a fairly short time. Additional circles can be added as familiarity makes work with the system go more easily. It's possible, within the limits of the traditional number symbolism used here, to go out to a total of eleven circles containing 67 memory places.3 It's equally possible to go on to develop different kinds of memory structures in which images may be placed. So long as the places are distinct and organized in some easily memorable sequence, almost anything will serve.

The Garden of Memory as described here will itself need to be committed to memory if it's to be used in practice. The best way to do this is simply to visualize oneself walking through the garden, stopping at the gazebos to examine them and then passing on. Imagine the scent of the flowers, the warmth of the sun; as with all forms of visualization work, the key to success is to be found in concrete imagery of all five senses. It's a good idea to begin always in the same place -- the first circle is best, for practical as well as philosophical reasons -- and, during the learning process, the student should go through the entire garden each time, passing each of the gazebos in numerical order. Both of these habits will help the imagery of the garden take root in the soil of memory.

Rules for Images

The garden imagery described above makes up half the structure of this memory system -- the stable half, one might say, remaining unchanged so long as the system itself is kept in use. The other, changing half consists of the images which are used to store memories within the garden. These depend much more on the personal equation than the framing imagery of the garden; what remains in one memory can evaporate quickly from another, and a certain amount of experimentation may be needed to find an approach to memory images which works best for any given student.

In the classical Art of Memory, the one constant rule for these images was that they be striking -- hilarious, attractive, hideous, tragic, or simply bizarre, it made (and makes) no difference, so long as each image caught at the mind and stirred up some response beyond simple recognition. This is one useful approach. For the beginning practitioner, however, thinking of a suitably striking image for each piece of information which is to be recorded can be a difficult matter.

It's often more useful, therefore, to use familiarity and order rather than sheer strangeness in an introductory memory system, and the method given here will do precisely this.

It's necessary for this method, first of all, to come up with a list of people whose names begin with each letter of the alphabet except K and X (which very rarely begin words in English). These may be people known to the student, media figures, characters from a favorite book -- my own system draws extensively from J.R.R. Tolkien's Ring trilogy, so that Aragorn, Boromir, Cirdan the Shipwright and so on tend to populate my memory palaces. It can be useful to have more than one figure for letters which often come at the beginning of words (for instance, Saruman as well as Sam Gamgee for S), or figures for certain common two-letter combinations (for example, Theoden for Th, where T is Treebeard), but these are developments which can be added later on. The important point is that the list needs to be learned well enough that any letter calls its proper image to mind at once, without hesitation, and that the images are clear and instantly recognizable.

Once this is managed, the student will need to come up with a second set of images for the numbers from 0 to 9. There is a long and ornate tradition of such images, mostly based on simple physical similarity between number and image -- a javelin or pole for 1, a pair of eyeglasses or of buttocks for 8, and so on. Any set of images can be used, though, so long as they are simple and distinct. These should also be learned by heart, so that they can be called to mind without effort or hesitation. One useful test is to visualize a line of marching men, carrying the images which correspond to one's telephone number; when this can be done quickly, without mental fumbling, the images are ready for use.

That use involves two different ways of putting the same imagery to work. One of the hoariest of commonplaces in the whole tradition of the Art of Memory divides mnemonics into "memory for things" and "memory for words." In the system given here, however, the line is drawn in a slightly different place; memory for concrete things -- for example, items in a grocery list -- requires a slightly different approach than memory for abstract things, whether these be concepts or pieces of text. Concrete things are, on the whole, easier, but both can be done using the same set of images already selected.

We'll examine memory for concrete things first. If a grocery list needs to be committed to memory -- this, as we'll see, is an excellent way to practice the Art -- the items on the list can be put in any convenient order. Supposing that two sacks of flour are at the head of the list, the figure corresponding to the letter F is placed in the first gazebo, holding the symbol for 2 in one hand and a sack of flour in the other, and carrying or wearing at least one other thing which suggests flour: for example, a chaplet of plaited wheat on the figure's head. The garments and accessories of the figure can also be used to record details: for instance, if the flour wanted is whole-grain, the figure might wear brown clothing. This same process is done for each item on the list, and the resulting images are visualized, one after another, in the gazebos of the Garden of Memory. When the Garden is next visited in the imagination -- in the store, in this case -- the same images will be in place, ready to communicate their meaning.

This may seem like an extraordinarily complicated way to go about remembering one's groceries, but the complexity of the description is deceptive. Once the Art has been practiced, even for a fairly short time, the creation and placement of the images literally takes less time than writing down a shopping list, and their recall is an even faster process. It quickly becomes possible, too, to go to the places in the Garden out of their numerical order and still recall the images in full detail. The result is a fast and flexible way of storing information -- and one which is unlikely to be accidentally left out in the car!

Memory for abstract things, as mentioned earlier, uses these same elements of practice in a slightly different way. A word or a concept often can't be pictured in the imagination the way a sack of flour can, and the range of abstractions which might need to be remembered, and discriminated, accurately is vastly greater than the possible range of items on a grocery list (how many things are there in a grocery store that are pale brown and start with the letter F?). For this reason, it's often necessary to compress more detail into the memory image of an abstraction.

In this context, one of the most traditional tools, as well as one of the most effective ones, is a principle we'll call the rule of puns. Much of the memory literature throughout the history of the Art can be seen as an extended exercise in visual and verbal punning, as when a pair of buttocks appears in place of the number 8, or when a man named Domitian is used as an image for the Latin words domum itionem. An abstraction can usually be memorized most easily and effectively by making a concrete pun on it and remembering the pun, and it seems to be regrettably true that the worse the pun, the better the results in mnemonic terms.

For instance, if -- to choose an example wholly at random -- one needed to memorize the fact that streptococcus bacteria cause scarlet fever, rheumatic fever, and streptococcal sore throat, the first task would be the invention of an image for the word "streptococcus." One approach might be to turn this word into "strapped to carcass," and visualize the figure who represents the letter S with a carcass strapped to his or her back by large, highly visible straps. For scarlet fever -- perhaps "Scarlett fever" -- a videotape labeled "Gone With The Wind" with a large thermometer sticking out of it and an ice pack on top would serve, while rheumatic fever -- perhaps "room attic fever" -- could be symbolized by a small model of a house, similarly burdened, with the thermometer sticking out of the window of an attic room; both of these would be held by the original figure, whose throat might be red and inflamed to indicate the sore throat. Again, this takes much longer to explain, or even to describe, than it does to carry out in practice.

The same approach can be used to memorize a linked series of words, phrases or ideas, placing a figure for each in one of the gazebos of the Garden of Memory (or the places of some more extensive system). Different linked series can be kept separate in the memory by marking each figure in a given sequence with the same symbol -- for example, if the streptococcus image described above is one of a set of medical items, it and all the other figures in the set might wear stethoscopes. Still, these are more advanced techniques, and can be explored once the basic method is mastered.

Rules for Practice

Like any other method of Hermetic work, the Art of Memory requires exactly that -- work -- if its potentials are to be opened up. Although fairly easy to learn and use, it's not an effort-free method, and its rewards are exactly measured by the amount of time and practice put into it. Each student will need to make his or her own judgement here; still, the old manuals of the Art concur that daily practice, if only a few minutes each day, is essential if any real skill is to be developed.

The work that needs to be done falls into two parts. The first part is preparatory, and consists of learning the places and images necessary to put the system to use; this can be done as outlined in the sections above. Learning one's way around the Garden of Memory and memorizing the basic alphabetical and numerical images can usually be done in a few hours of actual work, or perhaps a week of spare moments.

The second part is practical, and consists of actually using the system to record and remember information. This has to be done relentlessly, on a daily basis, if the method is to become effective enough to be worth doing at all. It's best by far to work with useful, everyday matters like shopping lists, meeting agendas, daily schedules, and so on. Unlike the irrelevant material sometimes chosen for memory work, these can't simply be ignored, and every time one memorizes or retrieves such a list the habits of thought vital to the Art are reinforced.

One of these habits -- the habit of success -- is particularly important to cultivate here. In a society which tends to denigrate human abilities in favor of technological ones, one often has to convince oneself that a mere human being, unaided by machines, can do anything worthwhile! As with any new skill, therefore, simple tasks should be tried and mastered before complex ones, and the more advanced levels of the Art mastered one stage at a time.

Notes for Part 2

1. See Yates, Frances, Theatre of the World (Chicago: U. of Chicago P., 1969), pp. 147-9 and 207-9.

2. The symbolism used here is taken from a number of sources, particularly McLean, Adam, ed., The Magical Calendar (Edinburgh: Magnum Opus, 1979) and Agrippa, H.C., Three Books of Occult Philosophy, Donald Tyson rev. & ed. (St. Paul: Llewellyn, 1993), pp. 241-298. I have however, borrowed from the standard Golden Dawn color scales for the colors of the circles.

3. The numbers of the additional circles are 5-10 and 12; the appropriate symbolism may be found in McLean and Agrippa, and the colors in any book on the Golden Dawn's version of the Cabala. The Pythagorean numerology of the Renaissance defined the number 11 as "the number of sin and punishment, having no merit" (see McLean, p. 69) and so gave it no significant imagery. Those who wish to include an eleventh circle might, however, borrow the eleven curses of Mount Ebal and the associated Qlippoth or daemonic primal powers from Cabalistic sources.

If you're my friend, Prof. Hoppe you shall defend

2005-02-12T05:01:42Z

To all of my friends, and anyone else reading this... A great professor, an excellent and highly respected Austrian economist, Prof. Hans-Hermann Hoppe, has come under attack by the PC-police. In his lecture, Time Preference and Its Implications, he discussed the phenomenon of time-preference, the preferring of present satisfaction over future satisfaction. All human beings have some degree of time-preference; this is inherent in the fact that we act. If we didn't have time-preference, we would never act. A person with a high time-preference has a high preference for present satisfaction (present goods) over future satisfaction (future goods); a person with low time-preference has a low preference for present satisfaction over future satisfaction.

The portion of the lecture that Prof. Hoppe has gotten in trouble over is the part where he gives several examples to illustrate the phenomenon of time-preference. He notes that the very old and the very young tend to have high time-preferences. He also briefly notes that homosexuals tend to have higher time-preferences.

Although Prof. Hoppe's been giving this lecture for 18 or so years, with no complaints, one student was offended by this. So, he complained to an administrator. The next class, Prof. Hoppe mentioned it, and said that he was only speaking in generalities -- that is, certainly such was not a specific statement about any homosexual person, anymore than his comment about the elderly would be specific about an old person (like Warren Buffet, who obviously has high time-preference even in his late 70s) -- and did not mean to offend anyone. The student, however, felt that this was "dismissive", and complained further. Now, the University of Las Vegas -- where Prof. Hoppe works -- wants to "punish" him, by issuing a letter of reprimand and cancelling his next payraise.

So, I'm curious. What do you think? I have intentionally left out the details of what Prof. Hoppe said because I want you all to listen to the lecture before making a judgement. Please do this. I think it is important to hear the entire lecture, and not simply make a judgement based on a sound-byte. The lecture is approximately one hour long, but is well worth the time (even ignoring this entire situation). I think you will find Prof. Hoppe to be a calm and enjoyable person to listen to, and even funny at times.

Here is some contact information, so that you can get in touch with the University

Contact info: President Carol C. Harter, Phone: 702-895-3201, Fax: 702-895-1088, harter@ccmail.nevada.edu. We have had reports that Harter's email has been taken down (not verified), so to be sure you could fax it or cc her staff listed here:
Kathleen Robins, Ph.D., Senior Advisor to the President; Schyler Richards
Deputy to the President; Betty Hanseen, Assistant to the President. Als: Dr. Raymond W. Alden III, Executive Vice President & Provost.

Other possible contact info: http://system.nevada.edu/Contact-Us/index.htm;
http://www.unlv.edu/main/boardRegents;
http://www.unlv.edu/president/cabinet.html#charter.

Here is some background information in the form of blogposts from the Mises blog, which contain a number of references to various articles discussing the hoopla:

Defend Hoppe
Lecture causes dispute
UNLV Regent warns "Professors have to be careful what they say."
UNLV Regents Chairman: Hoppe Should Not Be Disciplined
Political Correctness Crowd goes after Hoppe
The Volokh Conspiracy
Instapundit.com
Artists Under Attack, Muslims Against Advertising
Effort to punish UNLV professor gains exposure
The Thought Police Strike Nevada
UNLV Chooses Secrecy
Stifling free discourse at UNLV
Professor, ACLU may sue UNLV

Very interesting test

2005-01-28T04:17:45Z

Read this question, come up with an answer, and then scroll down to the bottom for the result. This is not a trick question. All the information you need is provided in the sentences below. No one I know has gotten it right, including me.

A woman, while at the funeral of her mother, met this guy whom she did not know. She thought the guy was amazing, her dream man! She fell in love with him instantly, but never asked for his phone number and could not find him after the funeral. A few days later she killed her sister.

Question: What is her motive in killing her sister? (Give this some thought before you answer) then scroll down for the answer.

Answer:
She was hoping that the guy would appear at the funeral again. If you answered this correctly, you think like a psychopath. This was a test by a famous American psychologist used to test if someone has the same mentality as a killer. Many arrested serial killers took part in the test and answered the question correctly. If you didn't answer the question correctly, good for you - you're normal. If you got the answer correct, please let me know so I can take you off of my friends list, unless that will tick you off, then I'll just be extra nice to you from now on.