Definition of the Day: 'Compliance'

Compliance. n. a ruthless, merciless process run by pitiless, uncaring bureaucrats to protect you.

[Hat tip, Keith Weiner]

What is cronyism, and why is it a cancer?

 

Don’t confuse cronyism with capitalism, say Daniel Mitchell in the guest post.

It’s easy to define and/or understand most statist policies.

• We know that a tax increase is when politicians take (or, given the Laffer Curve, try to take) more of your money based on your decisions to work, save, shop, or invest.
• We know that protectionism is when politicians use taxes and other policies to restrict your freedom to buy goods and services produced in other nations.
• We know that a minimum wage mandate is when politicians criminalize employment contracts between consenting adults, thus harming low-skilled workers.
• We know that Keynesian “stimulus” is when politicians borrow from one part of the economy and spend in another part of the economy and pretend there’s more money and more resources.

The list is potentially endless, but there’s one statist policy – cronyism – that I haven’t added to the list because I haven’t thought of a simple definition.

Are bailouts cronyism? Yes, but it’s more than that. Are subsidies cronyism? Yes, but it’s more than that. Are favours in tax laws cronyism? Yes, but it’s more than that. Are trade barriers cronyism? Yes, but it’s more than that.

You’re probably noticing a pattern, which is why this new visual from the Mercatus Center is helpful. It illustrates that there are many policies that should be considered cronyism.

And Mercatus comes up with a definition that we can add to our list.

• We know that cronyism is when politicians create “privileges that governments give to particular businesses and industries.”

Capitalism Dragged Through the Mud

Speaking of which, one of the most damaging features of cronyism is the way that it gives capitalism a bad name.

Many people equate free markets with “business.” So when people in the business sector get special favours, regular folks conclude that capitalism is a “rigged” system.

In theory, this false impression could be offset by an aggressive educational campaign by those who support free enterprise. Unfortunately, that task is rather difficult since many people assume Republicans, National, the Conservatives etc. are the pro-capitalism party. So when they see these parties favouring corrupt handouts to business such as the Export-Import Bank and the sleazy ethanol program, they conclude – once again – that capitalism is rigged for the politically powerful.

Cronyism is a cancer that compromises and erodes genuine capitalism.

And the battle to separate capitalism from cronyism is further hindered when major figures in the business world (such as Warren Buffett) get in bed with government.

Another American example is Elon Musk, the head of Tesla, Solar City, and SpaceX. He is known as a visionary entrepreneur, which is good. But Andy Quinlan of the Center for Freedom and Prosperity explains that he also has put taxpayers on the hook to underwrite and prop up many of his business activities.

It was announced this week that one of Elon Musk’s companies, Tesla Motors, will buy one of his other companies, SolarCity, for an all-stock deal worth $2.6 billion. …With the amount of taxpayer support both companies have received, perhaps the rest of us should get a vote…
    The deal comes as SolarCity has floundered despite significant taxpayer support through a bevy of state and federal tax credits and subsidies. Nevertheless, the solar energy company’s stock has been in long term decline as the company struggles to develop a profitable market not reliant on generous helpings of taxpayer support. 
    Tesla, too, has fed repeatedly at the government trough. The government provided federal loan guarantees and tax credits to help manufacture its electric vehicles. It also subsidized the purchase of those same vehicles to increase sales. Even still, the company makes more money selling “carbon credits” to other manufacturers than it does electric vehicles. …
    Musk’s other endeavor, SpaceX, also relies heavily on government. Obviously much of its business comes from government contracts, but more interesting is how those contracts are apparently obtained. …this year’s National Defense Authorization Act contains an amendment from Senator John McCain designed to eliminate from competition the Defense Department’s current supplier of rockets and pave the way for SpaceX to take over, despite the fact that its rockets aren’t yet powerful enough for the job.

Writing for Reason, Veronique de Rugy adds her insight

Elon Musk delivered a much-anticipated speech…where he laid out his vision for colonising Mars…a testament to human innovation and determination. …it might be more impressive if Musk could provide a vision for how his companies can succeed here on Earth first, especially without heavy reliance on taxpayer support. …
     Musk is no stranger to cosy relations with federal and state governments. All three of his companies have benefited heavily from taxpayers. Yet despite generous green energy handouts, his SolarCity is heavily indebted. He now wants to merge it with his electric car company, Tesla Motors, which also benefited from almost $1.3 billion in subsidies. Solidifying his crony credentials, the epitome of crony capitalism itself, the Export-Import Bank of the United States, has subsidised the payloads for numerous SpaceX launches. The Ex-Im Bank’s chairman misrepresented this as support for “small business.” …
    There’s no doubt that Musk is an impressive salesman and innovator. …Now that he has set his sights on Mars, let’s hope—for the future of science and exploration—that he…has the courtesy to leave taxpayers out of it.

Amen.

It’s great when entrepreneurs are successful. And I don’t resent their wealth in the slightest.

But only if they earn their money honestly, in a genuinely free and competitive market.

Cronyism, by contrast, is a cancer that compromises and erodes genuine capitalism

---

Daniel J. Mitchell is a senior fellow at the Cato Institute who specialises in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
This post previously appeared at FEE, and his blog.

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“Vulnerable Children”: What’s in a name?

 

The word “vulnerable” comes from the Latin vulnerabilis meaning ‘to wound.’ It means, or meant until coopted by the State, something that was in danger of damage, exposed to attack, in peril against some specific harm.

These days however the thing that’s most “in peril” is a child in danger of an interference of social workers descending upon them. So pity the poor child (and his parents) who attract the attention of the now-renamed Ministry for Vulnerable Children.

The very name just sounds Kafkaesque, doesn’t it. A whole Ministry of State to deal with (deal to?) children it identifies as “vulnerable.”

When formerly used “vulnerable” meant something exposed to some specific danger. But dangers now are just general, anything attracting the attention or redefinition of today’s social worker. So I was surprised to see welfare campaigner Lindsay Mitchell supporting the rewording, and I confess I’m not sure of her reasoning.

But she has done a powerful job of translating the other name by which the commentariat would like to call it: Oranga Tamariki. This translates as … well, something you’ll have to head to Lindsay’s post to find out. (But it’s well worth the trip.)

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Quote of the Day: On success

 

"For I have a single definition of success: you look in the mirror every evening, and wonder if you disappoint the person you were at 18, right before the age when people start getting corrupted by life. Let him or her be the only judge; not your reputation, not your wealth, not your standing in the community, not the decorations on your lapel. If you do not feel ashamed, you are successful. All other definitions of success are modern constructions; fragile modern constructions." 
     ~ Nassim Taleb

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[Hat tip Scott Powell]

 

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DEFINITION: Climatard

[Hat tip Doug Tozzoli]

What’s a “narcissist,” doctor?

No, it’s not just my imagination. The word “narcissist” is being used more and more…

… even as fewer people seem to understand what the word means—often being confused in being used to describe someone with a healthy self-esteem. Psychologist Michael Hurd explains the distinction is based on difference between a focus solely on “the inner, subjective ‘me’” of the true narcissist, and the focus on the “objective ‘out there’ (aka, reality)” of someone with a healthy self-esteem.

In other words, it’s the difference between being a “doer” and being a second-hander:

Two researchers recently concluded that narcissism involves a conviction of superiority over others, while genuine self-esteem has more to do with a positive self-image without reference to others. They hit on an important truth: There’s a difference between using others as your standard, and using a rational, objective definition (such as competence and performance) as a standard.
    Neurotic people look at what others are doing and try to beat them, and the mental health profession labels them “narcissists.” Healthy people determine what constitutes competence or excellence in a certain context and then they aim for it. They spend little time looking at what others are doing. Narcissists often come across as confident, but if you scratch beneath the psychological surface you’ll find nothing more than a compulsive concern for besting others. Genuinely confident individuals might enjoy beating others, but their primary goal is to live up to their own standard of excellence.
    For example, a study showed that college freshmen who based their self-regard primarily on academic victory over peers spent more time on their studies than other students but did not perform any better in their classes. Interestingly, those same students had more conflict with teachers and focused more on grades than on actual learning, suggesting that improving one’s mind and knowledge is superior to trying to get the best grade and beat everyone else out. And it supports what I’ve been telling people for years: If you simply concentrate on enjoying and excelling at your work, success will almost always follow.

[Hat tip Gus Van Horn]

‘Patent Trolls’ vs. Legal Trolls

The problem today is not that so-called “patent trolls” are able to mooch off valid patents; the real problem, writes guest poster Dale Halling, is that “legal trolls” are able to mooch off today’s poorly defined, sloppily written, wrongly conceived and inconsistently enforced law. Fix that, and patents can be defended properly once again.

There has been a lot of media attention about so-called patent trolls.  I am intimately familiar with these issues, but the characterization is incorrect.  There are Legal Trolls, some of whom specialize in patents, but they prey upon the same problems that infect every part of our legal system and so there is nothing unique regarding patents.  As happens so often, the government creates one problem and then people see the symptom and propose more improper government policies, which causes even more problems.

Legal Trolls Gaming the System

I had a small software start-up that was contacted by a Legal Troll.  The troll had selected our company because our website suggested it was in a somewhat similar space to the patents they were attempting to enforce.  I analysed the claims and it was clear the company was not practicing the patented invention.  When I contacted the troll however they were unwilling to review either the case or the claims.  They did not appear to be interested in the truth.  Our company decided it would rather die litigating than take a license they did not require.  We also worried that taking the license would make the company harder to be acquired later.

Another case that illustrates the point happened before the term “troll“was even invented.  A patent counsel for a large Fortune 500 company received a complaint for patent infringement of over 30 patents.  Under the CAFC rules at the time, the company would have had to spend at least $300,000 on opinions simply to respond to the complaint.  A couple of days later the troll offered to settle for about $100,000, knowing full well that both the costs and time constraints made this a great hold-up game.  The company’s patent counsel was so pissed off about this clear extortion that he refused to give in and found there was a cross-licensing agreement that gave his company the right to use the patents.  Nevertheless, this was an attempt to extort the company for a quick Christmas bonus, and all that happened to the troll on this shakedown was they had to eat crow and suck up some minor legal fees.

These situations arose not because of patent laws that protect the legitimate rights of inventors, but because of our overly burdensome federal litigation system—and because Rule 11 sanctions are almost never enforced against legal trolls.  So the reality is that these Legal Trolls have been using both the complexity of the law and the absurdly lenient standard for pleading to extort money from companies since at least the 1970s.  These Legal Trolls use for their purpose medical malpractice law, product liability law, securities laws and virtually every other area of poorly-written law on the books.

In the case of the medical malpractice lawsuits relied on by trolls, 90% of those that go to trial fail—if those being sued ever take it that far. Even at this failure rate, with low costs and enough targets, the odds work in their favour.  In a rational case you would expect about a 50% failure rate, otherwise it should be in the interest of the parties to settle.

Here for example is an article, describing the latest holdup "innovation" by securities plaintiff attorneys: holding up listed companies’ annual meetings with fatuous claims of omitted information and mishandled proxies.

But, the biggest Legal Troll of them all, however, is the government—who uses environmental laws to extort money from companies, OHSA rules to extort money from employers, IRS procedures and the unreadable tax codes to extort money from producers … and many others.

America’s Environmental Protection Agency (EPA) regularly demands people comply with their arbitrary ruling or face bankrupting daily fines.  One example of this, Sackett v. EPA, eventually made it to the Supreme Court.  The EPA has not only given itself the ability to assess this fines separate from a court or a trail, but they have argued successfully that they do not need to get a warrant to investigate a person.  This case is hardly unique.  In fact EPA administrator Al Armendariz admitted the EPA purposely terrorises companies to force compliance among subsequent targets.  He compared it to the Romans, who, when they conquered a village they would crucify five people arbitrarily to ensure compliance from all.

The Securities and Exchange Commission refusal to define the crime of “insider trading” is the perfect example of ill-defined law.  Accusing people of “insider trading” has been the favourite political stepping stone for attorney generals out of New York.  See for examples Rudolf Giuliani and Elliot Spitzer.  How can you be charged with a crime the government won’t define?  How do you know if you violated the law?  How can you even have mens rea—an intent to commit a crime, when you don’t even know for sure what the “crime” is? 

The securities laws are really just politics disguised as law—and on this, see also anti-trust laws, described best in the title of Harold Fleming’s Ten Thousand Commandments: A Story of the Antitrust Laws.

Fixing the Problem

Clearly, we have a problem with legal trolls not with patents.  So how do we fix the problem?  (I will ignore how to fix the abuses of our government—a much bigger problem than this one).  First,we need to clearly define what we mean by Legal Troll.  I would define a Legal Troll as any group that uses the complexity of the legal system to make a profit when they know their case is dubious.  Based on this definition there are two main components:

1. the cost and complexity of the legal system, and
2. baseless lawsuits.

In an attempt to promote justice our legal system reduced the requirements for pleadings, and provided a wide-open ‘discovery’ process.  These are the two main reasons why lawsuits are so expensive.

The requirement for a good faith investigation of the facts before filing a complaint should clearly be made stricter;   it is utopian thinking however to assume that judges are ever going to enforce this.  Making the Rule 11 type sanctions a private right and award, instead of judge-applied, would be a solution here—balancing the risks of filing frivolous lawsuits.  In addition we might want to consider a loser-pays type of rule.

The discovery process itself should also be time limited and page limited.  Discovery should not be used as a fishing expedition. 

Another problem is that we have an overworked Federal Judiciary—in part because we do not have enough federal judges, but mainly because we have had an ‘over-productive’ legislature federalising too many crimes and regulations. 

And on the patent level itself, we really should have judges who have technical backgrounds and who have themselves passed the patent bar. Something too often recognised in the breach than in the observance.

The truth is we do not have Patent Trolls, we have Legal Trolls.  And the biggest Legal Trolls of all, both as causal agents and practitioners, are governments.

Dale Halling is a rarity among bloggers. In addition to his law degree, he hold a BS in Electrical Engineering and an MS in Physics. He is an attorney specialising in intellectual property, and the author of the book “The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation,” and co-author of the Hank Rangar novels ‘Pendulum of Justice,’ and ‘Trails of Injustice.’

The term: 'Political Correctness'

There’s said to be an annual contest at Griffith University, Queensland, calling for the most appropriate definition of a contemporary term.

The term this year: 'Political Correctness'

The winning student wrote:

Political correctness is a doctrine fostered by a delusional, illogical minority and rapidly promoted by mainstream media, holding forth the proposition that it is entirely possible to pick up a piece of shit by the clean end.

SUMMER SNIPPETS: ‘Race and Culture,’ by Thomas Sowell

More snippets from my summer reading, this time from Thomas Sowell’s 1994 classic, Race and Culture: A World View.

“The effectiveness of particular cultures for particular things can be of the highest importance.  Much—perhaps most—of human history cannot be understood without understanding such things as the conquest of ancient Britain by the Roman legions against a vastly larger military force, simply because the legions were a militarily superior organisation from a more advanced society.  It is not necessary to claim that a particular people or a particular culture is superior in all things or for all time.  On the contrary, world leadership in science, technology, and organisation has passed from one civilisation to another over the centuries and millennia of human history.  But neither is it necessary to deny the greater effectiveness of particular cultures for particular things at particular times and places—even if other contemporary cultures may be superior for some other things.”

“Neither race nor related concepts can be used in any scientifically precise sense to refer to the people inhabiting this planet today, after centuries of genetic intermixtures.  The more generic term, race, will be used here in a loose sense to refer to a social phenomenon with a biological component, rather than make a dichotomy whose precision is illusory.”

“The incidence of economically valuable skills no doubt varies from class to class, but it likewise varies from ethnic group to ethnic group and from nation to nation.  The difference is that ethnic groups and nations have an existence independent of arbitrary definitions based on skills.  Moreover, some immigrant groups begin at a lower socioeconomic level than that of the surrounding population and eventually rise above them, due to their skills, work habits, or other economic performance differences.  They have changed class precisely because of their skills, capabilities, or performance.”

“Vast differences between the economic productivity of peoples from different cultures do not imply that these differences are permanent, much less hereditary.  Early nineteenth-century Germans were clearly well behind the English in industrial technology … yet within a century had surpassed [them].  So had the United States within the same span of time.  Much the same story could be said of Japan [and now China], which moved from imitator to initiator over the same span of time…
    “The normal tendency of economic processes is to disseminate technology, knowledge and skills from their place of origin to where they are lacking.  The law of diminishing returns means that the rewards of any factor of production tend to decline where that factor is abundant, and to be higher where it is more scarce.  Like water finding its own level, abundant factors tend to flow to where their scarcity makes their productivity and reward greater. Thus capital, skills, organisation, technology, or hardworking labour tend to flow to regions and cultures where they are are especially scarce.  But the very scarcity and value of these skills and traits mean that those who possess them are more likely to become more prosperous than the indigenous people of the recipient countries. Political reactions to these economic realities [on every continent and in every century] have often been very negative, and sometimes violent.”

“Formal education, especially among peoples for whom it is rare or recent, often creates feelings of entitlement to rewards and exemption from many kinds of work… Such attitudes affect both the employed and the unemployed.  Even those educated as engineers have often preferred desk jobs and tended to ‘recoil form thee prospect of physical contact with machines.’  In short, education can reduce  an individual’s productivity by the expectations and aversions it creates, as well as increase it by the skills and and disciplines it may (or may not) engender…
    “It is understandable that Third World peoples who have been rules for generations by colonial bureaucrats sitting behind desk, wearing collar-and-tie and shuffling papers, should seek to imitate that role when they get the chance.  But the wealth and power of the imperialist nation that put the colonial bureaucrat there in the first place was not created by sitting behind desks and shuffling papers…
    “Both in underdeveloped countries and among many lagging groups in industrialised nations, there has developed a taste for easy, self-flattering courses such as Maori Studies in New Zealand, Malay Studies in Singapore, and a variety of ethnic studies. in the United States.  The claim is often made that the morale-boosting effects of such courses will enhance the students’ academic performance in other fields, but this claim is wholly unsubstantiated.  What is clear is that easier courses, whether in ethnic studies or otherwise, prove attractive to lagging groups…”

“The stunning impact of immigrants in transforming whole economies [is not peculiar] to European immigrants.  In [most] parts of the world, modern economic development was largely the work of immigrants or foreign investors, with the indigenous population playing little or no role in the modernisation process.  [In 1914, for example, foreigners owned, in addition to two-thirds of Argentine industry, nearly three-fourths of Argentine commerce. Nor was this pattern unique in South America.] In colonial Malaya, for [further] example, Chinese immigrants provided much of the labour that developed that country’s giant tin industry, and immigrants from India manned the rubber plantations—both financed largely by European and American capital.Similar patterns of European capital and non-European immigrant labour combining to create economic development could be found from Fiji in the South Pacific to countries on the east coast of Africa and the Middle East.  Yet in these and other countries, the earlier or indigenous population has almost invariably come to resent these foreigners, whether sojourners or immigrants, who raised the economic level of their country. In a later period especially, after the actual origins of particular economic activities have faded into the mists of time, foreign groups have often been denounced for having seized control of  the nation’s industries and exploited its people.  It is as if businesses and wealth came into existence somehow and foreigners happened to take possession of them.”

“Housing is a very heterogeneous product, ranging from hovels to mansions, so the supply and demand for this product in a culturally heterogeneous populations offers highly varied possibilities, as does the perception of the outcomes by heterogeneous observers.  Many observers have been appalled by the housing inhabited by people of a different class, race, or national origin.  Sometimes this has reflected simply a difference in income between the observers and the inhabitants, the latter being unable to afford anything better.  At other times, however, the hosing choices have reflected different goals, or different trade-offs among goals … [Men] living as immigrants or sojourners, for example …. saving to take money back home or to bring their families over to join them [will have a contrasting demand for housing to those who might criticise the living conditions they are prepared to accept] …
    “…. In short, for these groups such as Italian men [and middleman minorities overseas, such as the Chinese in Southeast Asia, the Lebanese in West Africa, or the Indians in East Africa … or during the mass emigration of Jews that transferred the centre of world Jewry from Eastern Europe to the United States], housing choices as of a given time reflected long-run plans as well as short-run trade-offs.  All this tended to be ignored by observers shocked at these groups’ housing conditions, and especially by social reformers determined to do something about it.
    “Seldom have the crusades of social reformers been directed toward enlarging the set of options available to the groups whose housing the reformers disapproved.  More commonly, housing reform efforts have reduced the existing options, whether by “slum clearance” programmes that destroyed “lower quality” housing, by building codes that forbade construction of housing without amenities prescribed by reformers, or by other regulations limiting the number of persons living in a given space to what reformers found acceptable.  In these ways, less fortunate groups were forced to pay more for housing that they themselves chose.  Their incomes could no longer be used to maximise their own satisfactions, according to their own values, but were partially diverted to making observers feel better.”

Architectural Mini-Tutorial: Ceiling Decks

Open plan living is a vast improvement on life in a box -- or in a series of boxes, which is what describes most traditional houses, unfortunately.

But it’s not enough just to be “open plan.”  The biggest open plan space is just a field, right?  Good open-plan living still requires a delineation of spaces within the larger space – it’s just more difficult for the designer to ensure the right degree of separation between the sub-spaces, and the right amount of integration of each sub-space with the main space.

In a well-designed open space, each space will have its own character, and will flow easily and comfortably into other spaces – especially if the spaces are successfully “nested.” It should feel natural, not forced, with each space retaining its own character within the larger space, but still being a part of it.  Done properly, the “separation” or division of spaces gives the right feelings of liberation or enclosure appropriate to the space.

It’s important that the definition of each each space within the larger whole is done a subtle manner so as to avoid there simply being a space like 'one large barn.'  Some popular methods of achieving this separation are:

• different floor coverings in different space;
• changes in floor level between spaces;
• furnishing layouts;
• the use of sliding or folding 'screens';
• the use of room proportions and wall returns to break up a larger space into smaller sub-spaces;
• posts and the like between spaces;
• changes in window and door layouts, e.g., a french door layout in one part of a space, and perhaps clerestory windows in the other;

The method by which the separation is achieved is usually dependent on the extent and quality of the spatial separation required.

All these methods of suggesting separation of spaces, from subtle to obvious, can be used in virtually every open space. In fact, one of the best places to see these methods in action "out in the wild" is in some of the best-designed bars and pubs, which use virtually every method there is to make small sociable, friendly spaces within a much larger whole. And here's one of the most effective methods to do this job:

• changes in ceiling height, including the use of lowered ceilings and lowered ceiling decks, like this:

Which brings me to ceiling decks – a special kind of “overhead plane” that is among the very best ways to frame a space and begin making a home out of a house.

A ceiling deck is essentially a lowered “ceiling slab'” that you can see over, and in which you might have downlights, uplights and all your other services. (Great for future proofing because it's very easy to rewire!)

Your cunning designer can use ceiling decks to frame a space; to separate two spaces; to direct a view; and to give order and pleasurable contrast to a series of different-sized (or even same-sized) spaces.

If you've got them at the right heights, by playing off expected proportions with the unexpected proportions you build in, you can really begin to make a small space appear very much larger indeed.

And oddly enough, if the “decks” are done well and they become the primary ordering element of a space – the means by which all the space in your building is “read” – then your walls and all the home's other enclosures start to lose their importance.  You’ve started to “break the box”-- reducing the sense of enclosure without removing the sense of place a home should give you.

Which maybe explains why you see them so rarely. Most modern designers like boxes.  And they despise subtlety.

Ceiling decks offer a particularly subtle way both to 'frame a space' and to divide one space from another, but also – if you do them well -- lowered ceiling decks that 'frame' a space help to make that space and those around it appear larger than they are.

So basically, a lowered ceiling deck is simply a lowed or independent part of a ceiling, usually horizontal in the manner of an above-ground 'deck.'

Why do they work so well? Well, here's one reason--your "space bubble."  See:

Each of us has our own personal space bubble--and, if we're with friends or family, a social space bubble within which we feel our personal space is contained.

Ceiling decks help "frame" these larger bubbles to give real presence to a space. And with lower decks, they offer a very good way of "squeezing down" a space bubble over eating areas for example, or at an entrance, which can then be "released" into a larger space--the contrast between the two making the large space feel larger and the lower space cosier.

This is simply a three-dimensional use of the technique of “containment” and then “release” used for centuries by the designers of Japanese landscapes and courtyard gardens. The same technique built in and updated.

A ceiling deck, or a lowered ceiling, can be in any style and suit houses of any era. Here are some examples of lowered ceilings, ceiling decks, ceiling dividers and “picture rails” (used to suggest a lowered ceiling) using different styles, and from different eras, all of them successful. See if you can see all the designers are hoping to achieve in each case:

Innovation vs. Invention

Guest post by author, patent attorney and entrepreneur, Dale Halling

I believe there is a lot of confusion regarding the difference between invention and innovation.  This confusion is the result of erroneous definitions and the purposeful intent of some to increase their importance by belittling the contributions of others.

I believe that most of this mischief started with the great economist Joseph Schumpeter.  According to Wikipedia:

Following Schumpeter, contributors to the scholarly literature on innovation typically distinguish between invention, an idea made manifest, and innovation, ideas applied successfully in practice.

There is nothing inherently wrong with the distinction above, but the way it is applied blurs together a number of different skills.  Blurring skills together shows a misunderstanding of the process of innovating. 

Broadly speaking, innovation can be broken into two distinct sets of skills: creation and dissemination.  By creation I mean creating something new; not simply production – creating something old.

Invention is a subset of creation.  An invention is a creation with an objective repeatable result.  A creation that is not an invention has a subjective result, such as the effect of a painting on a viewer, or the effect of a book on a reader.  Many activities combine both a subjective creation and an invention, such as architecture.  However, we can separate out the invention from the other creative elements and this helps our understanding of the process.

Dissemination may include a number of processes, such as education (marketing, sales), manufacturing, finance, and management.  This is not to say that marketing cannot be creative, it clearly often is very creative.  However, the creative part of marketing can be separated out from the dissemination or execution part of marketing.  The same is true of manufacturing, which can definitely include inventing.  But an invention related to manufacturing is part of the creation step, not part of the dissemination step.

Finance can also have inventions.  For instance, the invention of a fractional-reserve ratio bank is clearly an invention.  It has the objective result of securitizing assets and turning them into loans and currency.  A fractional reserve bank will securitize land and turn into a loan and currency.  Despite this, [and leaving aside all the arguments about the legitimacy or security of a fractional-reserve banking system] it is important to understand that the first person to develop the fractional-reserve bank is inventing and the person operating the fractional-reserve bank is disseminating.

All real per-capita economic progress is the result of inventing.  This is not to say that it is unnecessary to disseminate inventions, but if there were no new inventions there would not be any economic progress. Once all the existing inventions had been completely disseminated, we would be stuck in a declining world of diminishing returns. [“The law of diminishing returns applies in a given state of technology, but not under the conditions of an improving state of technology.” – George Reisman.] Of course, if we stop all dissemination activities altogether we will quickly starve to death.

It is my belief that business and economic professors have focused on “innovation” instead of “invention” because they have no idea how to invent or how the process of how inventing works.  They concentrate on what they know, i.e. business and economic practices.   As a result, the focus is dissemination,  under-appreciating the importance of inventing.  In addition, it results in misleading business theories such as these:

• “Management teams are more important than the quality of the invention.”
• “Execution is everything; patents and other IP do not matter.”
• “Get Big Fast.”

The truth-test of these theories is directly related to the strength of the patent laws at the time the company is created.  When patent laws are weak, these theories are more true and when patent laws are strong, these theories are less true.  Unfortunately, when patent laws are weak these theories do not overcome the disincentive to invest in risky new technologies.  Management teams do not build revolutionary or disruptive technologies, they just disseminate these technologies. These sorts of teams are like large companies and generally can produce a return with less risk by NOT developing high-risk technologies.  They tend to focus on incremental technologies or on stealing someone else’s technology.  While this may be good business advice in a period of weak patents, it is bad for competitiveness and for our real standard of living.

In the long run, the only competitive business advantage is technological progress (i.e., inventing). The best management team in the world selling buggy whips at the turn of the century could not overcome the technological advance of the automobile and stay a buggy whip company.  The best management team in the world selling vacuum tubes in the 1940s, could not overcome the advance of transistors and semiconductors and stay a vacuum tube company. 

America is littered with companies that had great management teams that were overwhelmed by changes in technology.  For instance, Digital Computers had a great management team, but they could not overcome the advance of the personal computer.  Digital Computers failed to invent fast enough to overcome the onslaught of small inexpensive computers.  US steel was not able to overcome the onslaught of mini-mills, aluminium, and plastics.  This was not because they did not have a good management team, it was because the management team under-prioritized invention and over-prioritized execution or dissemination skills. 

Ford & GM have not become walking zombies because they did not have strong management teams, but because they have not invented.  As a result, they have antiquated production systems and weak technology in their products.  86% of the companies in the Fortune 500 in 1959 are no longer there.  Some of these companies disappeared because of bad management, but most companies disappeared because they did not keep up with changing technology.  In other words, they did not invent.

Inventions or advances in technology are the ONLY WAY to increase real per capita incomes and the only long term business advantage.  Business school theories that do not prioritize invention are bad for business, and bad for our prosperity.

Dale Halling is an American patent attorney and entrepreneur, and the author of the book The Decline and Fall of the American Entrepreneur: How Little Known Laws are Killing Innovation.
Read his regular thoughts at his State of Innovation blog. 
(NB: This post originally appeared at the State of Innovation blog. It has been lightly edited and reformatted for clarity.)

More on "Eco-cide"

After talking the other day about the attempt by lawyer Polly Higgins--Hippy Higgins to her few friends--to equate "eco-cide" with genocide, reader Willy S. sent me this clarification of what she means.

First, the Hippy's definition of "eco-cide:

"Ecocide is the extensive destruction, damage to or loss of ecosystem(s) of a given territory, whether by human agency or by other causes, to such an extent that peaceful enjoyment by the inhabitants of that territory has been severely diminished."

You can see an example of such a thing after the jump . . . (which I've always wanted to say) . . .

Some propositions on privacy

Let’s get some thoughts going on the “right to privacy.” Here’s a few to start you off.

“An issue such as ‘the invasion of privacy’ cannot be discussed without a clear definition of the right to privacy, and this cannot be discussed outside the context of clearly defined and upheld individual rights.”
- Ayn Rand

“Privacy: it’s a good, not a right. It’s not something to be recognised, it’s something to be earned.”
- PC

“Yes, we each of us need privacy. But our need for something is not a claim on someone else.”
- PC

“Civilization is the progress toward a society of privacy. The savage's whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.”
- Ayn Rand

“Social democrats are collectivists of the first order. For them society is a large beehive or ant colony, and they are convinced that they have landed the job of managing it. It is a bit ironic, actually, since it is usually social democrats who champion ‘the right of privacy.’ Apart from that, though, liberal democrats do not acknowledge the existence of individual rights. Most of all, they are nearly unanimous in denying private property rights. . .  these people dogmatically assume that "the wealth of the country" is for them to use and dispose of as they see proper. Individuals have no rights to their resources, income or wealth, especially not those individuals who have plenty of them.”
- Tibor Machan

“Does a human being have the right to privacy? Well, is human nature such that in their community lives people require their own realm of authority, their own sovereignty—self-government—with respect of various aspects of their lives? Of course they do—that’s what being a responsible moral agent amounts to. So the right to privacy exists. It stands as a bulwark against meddlesome other people, especially governments.”
- Tibor Machan

“Philosophically speaking, however, there is no contradiction between a ‘right of liberty’ and any ‘right of privacy.’ And neither of these rights is possible without private property rights. . . The ‘right of privacy’ is, fundamentally, an expression of the right of private property.”
- Chris Sciabarra

“Privacy is a good -- like food, music, or love. So while we have the right to take the actions required to secure our privacy via judicious use of our property and voluntary contracts with others, we have no direct right to privacy per se. . . Laws designed to protect privacy undermine genuine rights to property and contract.”
- Amy Peikoff

“The ‘right to privacy’ is a misguided attempt to save some shreds of certain [legitimate] rights while retaining a way to eviscerate others.”
- Arline Mann

Discuss.

It’s not renewable, and it’s barely energy

The definition of so called “renewable energy” can be put very simply:

Renewable energy may be defined as energy produced by means that would be uneconomic without tax breaks and subsidies.  The distinguishing characteristic of so called 'renewable energy' is not that it is renewable, but that it doesn't produce reliable energy. 

In other words, it’s politicised energy – with the emphasis on the “politics” rather than the energy.

Engineer Brian Leyland makes the point again this morning at Muriel Newman’s site:

    The drive for renewable energy in the form of windpower, marine power and the like is driven by a belief that man-made greenhouse gases will cause dangerous global warming, and that large-scale adoption of these technologies will “fight climate change”. To this end, thousands of MW of heavily subsidized wind power capacity are being added worldwide each year.
    In New Zealand we are told that windpower is economic compared to alternatives, that the unpredictable short term fluctuations can easily be covered by our “abundant hydropower” and it helps conserve hydropower storage. Therefore, we are told, we should happily accept destroying iconic landscapes and seriously upsetting people who live nearby. . .
    The truth is, as I will show, that windpower is expensive compared to alternatives, hydropower schemes have no spare capacity to back up windpower in a critical dry year and wind power output is lowest in the late summer and autumn when we need it most.

Or as Alan Jenkins from NZ's Electricity Networks Association said a few years ago:

It's very hard to invest in coal [because of Kyoto], nuclear's a sort of four letter word... hydro is suddenly becoming too hard... what's left? ...we can't do everything on windpower.

Read Leyland’s whole piece here:  Windpower: Foolish Energy – NZ Centre for Political Research.

Stimulus: Because all economies have performance issues [update 2]

This year, Australian taxpayers will receive, from their Government, an Economic Stimulus Payment. A shopping subsidy. This is a very exciting new programme that can be explained using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government sends to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgen.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a
High definition TV set or a new computer, thus stimulating the economy.

Q. But isn't that stimulating the economy of China?
A. Um.

Q: Well, how on earth does it stimulate the one whose taxpayers are paying to be stimulated?
A: It's all about the "multiplier."

Q: The "multiplier"?
A: Yes, the "multiplier." Every dollar the government "injects" into the economy creates an even larger increase in national output -- a multiple up to one-and-a-half times the original spend-up. The money the government is giving away goes to retailers, which then goes to producers, which then goes to other producers and so on. The net result of the spend-up, as the theory goes, will be new jobs and an overall increase in the nation's income.

Q: So the government is giving me back a smidgen of my own money, and this smidgen is multiplied several times to create a "stimulus?
A. You've got it.

Q: And it keeps prices up?
A: We hope so.

Q: But don't prices need to fall in a recession to get real production going again?
A: Well, yes.

Q: And it's not even backed by real demand, is it?
A: Well, no.

Q: So how long can such an artificial stimulus last, then?
A: Um, the theory is that it's only temporary at best.

Q: And what sort of stimulus would it have created if I'd been able to keep that money myself, and either spend it or save it?
A: Well . . .

Q: Or if producers had been able to keep their own money?
A: Um . . .

Q: So it would be fair to argue that "not only does the increase in government outlays not raise overall output by a positive multiple; but, on the contrary, [it actually] leads to the weakening in the process of wealth generation in general.”
A: But . . .

Q: And this is the whole theory? This is all you economists can come up with?
A: Well, that's about it, yes.

Q: So it's a bit like when "a carnival magician produces a quarter from behind a child's ear," isn't it. "The 'magic' of the multiplier is mere illusion."
A: Hush your mouth. People are listening.

Q: No answer?
A: Sorry, we're a bit busy right now shovelling money out the door.

* * * * Stimulus: Because all economies have performance issues * * * *

[Hat tip (and pic) Tim Andrews & Sus]

UPDATE 1: Courtesy of Greg Mankiw [with a hat tip to Anti Dismal], here is John Maynard Keynes of 1942 six years after The General Theory, showing he was still wrong about his general theory, but moving towards being right on specifics:

Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle.

UPDATE 2: Subsidies for everyone? If we all have to endure the "stimulus" packages of politicans, then how about a stimulus package for bloggers? The excellent 14-point case for prudent profligacy [hat tip TVHE] concludes,

This is an important campaign. Your comments of support ... help make the case to government...
With sufficient momentum we can make sure the stimulus is not wasted on filling in freshly dug holes, fixing the environment or building bridges to nowhere - all things that the market is perfectly capable of doing by itself. Instead of Bridges to Nowhere, what this economy really needs is a serious infusion of Blogs about Nothing.

Amen to that. May I forward you this humble blogger's bank account details? ;^)

What's this "equality of opportunity" nonsense we're now hearing?

John Key told Campbell in a chatty, mates-together to-camera the other night that he wasn't interested in the Labour mantra of "equality of outcome"; he intended instead to pursue "equality of opportunity."  His multiple dissemblings over the Maori seats (to abolish or not to abolish, that is the sixty-four seat question) has made it clear he has no bottom lines, but the "equality of opportunity" talking point was one that was raised in the campaign by David Farrar, raised again this week by John Key, and recycled just yesterday by National's ambitious Auckland Central bimbo Nikki Kaye: "I'm a National member because ..." says the Blonde Ambition, sniffing the air for clues ... "because I really believe in the equality of opportunity for all, not the equality of outcome."

Is this already a Labour-Lite talking point then?  Once is happenstance -- twice is surely design -- the third time must surely be evidence of collusion, especially by one so ambitious as Ms Kaye.

But is it a reasonable goal to pursue?  Is it even a good thing?   No, says George Reisman, it isn't.  It is no more reasonable to pursue equality of opportunity through the use of government force than it is equality of outcome: both of these are simply misguided attempts to use government power against the facts of reality.

The fact is that people are not born equal, and they can't be made equal by government decree -- and nor can the opportunities that are open to them. A responsible government should pursue neither the closing of gaps nor the equality of opportunity -- the result of both is merely new positions of privilege, a new aristocracy, and destructive nonsense like affirmative action and racial quotas. 

What it should pursue instead is the ending of privilege and the removal of government hurdles to individual action. 

In other words, it is not equality of opportunity that a responsible government should pursue but freedom of opportunity. That's really what it means to have one law for all.  "Let us consider what opportunities actually are," suggests Reisman, "and then establish some important facts about them."

    "An opportunity is merely an occasion on which successful action is
possible. It is a situation that an individual can take advantage of to his gain.
    What needs to be realized about opportunities is, first of all, that there is
no scarcity of them; they arise again and again. The second thing that needs to
be understood is that what is important in connection with them and deserves
to be fought for, as a matter both of justice and universal self-interest, is not
that vicious absurdity “the equality of opportunity” but the freedom of opportunity.
    ... what needs to be understood about opportunities is that they can be and regularly are created by individuals. Indeed, opportunities are themselves products of human thought and action..."

Opportunities are everywhere.  It's not the abundance of opportunities that is a problem, but the paucity of vision that is unable to see them.

    "Let us consider the abundance of opportunities. An opportunity exists
every time there is the possibility of improving oneself in any way. If one is
penniless and there is an unfilled job available that one has the ability to fill,
one has the opportunity of ending one’s pennilessness. If one has a job, and
there is any better job available that one has the ability to fill, one has the
opportunity to improve one’s position further. If there is any skill that one
does not possess, but is capable of learning, then one has the opportunity of
adding to one’s skills.
    In fact, in the nature of the case, the economic opportunities potentially
open to the individual far exceed his ability to exploit them, with the result
that he must choose among them, selecting some and rejecting others. This
follows from the fact that there is always room for improvement in the
satisfaction of man’s wants, and that the basis for carrying out such improvement
is the performance either of more labor or of more productive labor.
    In other words, built into the fact that man’s wants can always be satisfied more
fully or better is the opportunity for the performance of more labor as the
means of satisfying them more fully or better, and the opportunity for improving
the productivity of his labor.
    ... it follows that in the nature of things there are potentially limitless
opportunities both for increasing employment and for raising the productivity
of labor, for there are virtually limitless possibilities for improvement in the
satisfaction of man’s wants. Indeed, the potential opportunities for employment
always dwarf man’s ability actually to work, which is the major reason
that he must be concerned with raising the productivity of his labor.
    People may wonder, of course, how it can be true that there are virtually
limitless employment opportunities and yet, at the same time, the world in
which we live is characterized by chronic mass unemployment and the
experience of millions is that they have no opportunity for work. There is a
simple reconciliation of these facts. Namely, misguided laws and social
institutions deny man the freedom of exploiting the opportunities for employment
that the nature of reality offers him, and so force unemployment upon him.
   The problem of unemployment [about which we're going to see a lot more very soon] is is the result of the violation of the freedom of opportunity -- i.e., the violation of man's freedom to exploit the opportunities that that reality offers him. 
    The freedom of opportunity means, to be precise, the ability to exploit the opportunities afforded by reality, without being stopped by the initiation of physical force.

That's a great definition: "the ability to exploit the opportunities afforded by reality, without being stopped by the initiation of physical force."  And as we know, the biggest initiator of physical force bar none is the government.

People are unable to find work not because there is no work for them in reality, but because government and labor-union interference, based on the initiation of physical force, prices their labour beyond the reach of potential employers ... [specifically through] inflation of the money supply ... coupled with so-called pro-union legislation.

So if the new Key regime wants to do a decent job on this score, to promote the freedom of opportunity, then it must work urgently towards removing those misguided laws and social institutions that while building up a chosen few, restricts every other New Zealanders' freedom of opportunity. 

But that would assume it regarded freedom of opportunity as a goal worth pursuing, or even understood its desirability.

Recession

The Herald would like to make it official -- "recession bites: consumer outlook lowest since 1991" says the front-page headline in this morning's Auckland edition -- but at this stage still needs Friday's GDP figures for the March quarter to be negative "as expected" to make the headline a dead cert. Still,

    "Consumers are squealing due to the high cost of living," Westpac chief economist Brendan O'Donovan said. 
    High food and petrol prices were the biggest concerns, though the "litany of woe" also included rising debt servicing costs, falling house prices and job losses.
    "It's consistent with what we are hearing from businesses," he said. "It's pretty dire out there. Auckland retailers particularly are struggling."

Also "expected" is that GDP for the June quarter will be even worse -- "the worst of the lot" says Westpacs's Brendan O'Donovan.  Figures for the June quarter, by the way, will not be out until September.

Such is the difficulty of determining the present state of the economy by GDP figures alone: as John Clark so insighfully satirises here [scroll down to 'Update 1'].

BARRISTER (in the Royal Commission on What the Hell's Happening to the Australian Economy): So what are the current figures based on?
MR TROUSER (from the Treasury): They're based on the information available at the time the current figures were being prepared.
BARRISTER: Which was when?
TROUSER: 3 months ago.  The figures take 3 months to assemble.
BARRISTER: Is it possible for you to tell what's happening now?
TROUSER: Yes, of course it is.
BARRISTER: When could you do that?
TROUSER: In 3 months.

George Reisman offers a more general rule of thumb for measuring whether we're in schtuck.:

A depression is characterized not only by falling prices, but also by a plunge in business profits (which may even become negative in the aggregate) and by a sharply increased difficulty of repaying debt. It is also characterized by mass unemployment.

By Reisman's rule of thumb then we're still only two out of four on the recession scale -- although with dodgy dealing on unemployment figures and and the Reserve Bank creating a phony 'price stability,' how would you really know?

In any case, two things that particularly caught my eye this morning were the graph in the print version of the Herald's article (pictured right) and the many excuses given by the CEOs of collapsing finance companies for being short of the readies, most of which include the phrases "liquidity concerns," the "difficult credit environment," and a failure of clients to "reinvest."  These excuses indicate that the growth of many of these finance companies have been built on little more than pyramids formed by new deposits, and on the ability to pull down new tranches of counterfeit capital rather than on making sound investments that are reliably repaid.  Bring on the malinvestment!

There is a link between these two things (the Herald graphic and the excuses of the finance companies) and how one measures whether or not one is in a recession -- and a graph of the True Money Supply can sort that out.

By 'True Money Supply' I do not mean the figures of M1, M2, M3 or MZM that are commonly used to measure the money supply.  As Frank Shostak explains [pdf], each of these measures is flawed:

... M2 double counts some aspects of money and since M3 incorporates M2, it is equally flawed right off the bat. M2 also counts savings accounts which are really credit transactions and MZM is hopelessly flawed as a money definition because it attempts to count things that can easily be converted to money as opposed to money itself.
M1 is flawed by the inclusion of travelers checks and the exclusion of demand deposits with commercial banks and thrift institutions + government deposits with banks and the central bank. M1 also has another huge problem and that problem is 'sweeps', [which are used ] "to lower statutory reserve requirements on demand deposits. In a sweep program, banks “sweep” funds from demand deposits into money market deposit accounts (MMDA), personal savings deposits under the Federal Reserve’s Regulation D, that have a zero statutory reserve requirement ratio. By means of a sweep, banks reduce the required reserves they hold against demand deposits."

What we want is an accurate measure of how much ready money is flushing around the system. courtesy of the central bank.  So how do we measure that if the present measures are flawed?  Says a student of Shostak who's drawn up the graph on the right: "The definition I am now working with is Cash + demand deposits with commercial banks and thrift institutions + government deposits with banks and the central bank + sweeps + other checkable deposits."  He calls this figure M', ie., M Prime.  The graph on the right shows M' for the US measured for the last forty years. [See Mike Shedlock's website for a more thorough explanation, especially: Money Supply & Recessions.]

The importance of this measure can be seen by comparing the period 1998 to present to the Herald's graph above (do those peaks and troughs ever match up, do you think?), and by understanding the implications of that match-up for three things:

1. this indicates that the booms and inflations of recent years have been driven (at least in part) by expansion of the money supply;
2. that finance companies and banks are experiencing a credit crunch largely because the continued expansion of the money supply (and the phony credit on which they rely) has stopped, for the time being anyway; and
3. if you want a good way to measure recession (and inflation), look to the money supply as a leading indicator, and in particular to the figure of "M Prime" as adjusted by the CPI. Says Sherlock, using this last figure allows one to see "that there has been a recession on 6 of 7 sustained dips below the zero line of year over year growth in M'." 

In other words, it's a reliable way of measuring booms and busts and credit crunches.  No surprise really, since the expansion and contraction of the money supply is the single greatest factor in causing booms and busts.

"Acceptable corruption"

Helen Clark has conceded that the Labour Party won't be using a Pledge Card at the next election -- a concession not to the Auditor General, who found that the Pledge Card was an illegal use of taxpayer's money, but an acceptance that the Auditor General's report and Bernard Darnton's case against Clark for illegal use of public money have between them soiled the Card irreparably.

It's also an easy concession to make, given that Helen Clark (in her role as leader of the Clark Government) is organising the full weight of taxpaid resources and state power to be brought to bear to re-elect Helen Clark (in her role as leader of the Labour Party), and to silence her opponents.

Who needs pledge cards when you've issued a policy requiring departmental bureaucrats to issue advertising extolling your programmes?

Who needs pledge cards when you're enacting legislation under urgency to "throw open the gates" to unlimited parliamentary spending on your behalf so that the taxpayer pays for your campaign, you don't have to, and it doesn't count as election advertising?

Who needs pledge cards when you're enacting further legislation without proper consultation that effectively shuts down your opponents for the entire year of an election campaign? That will shut down political speech for one-third of our lives?

Who needs to worry about being called corrupt when you can just change the law to make your corruption legal?

Between them the Electoral Finance Bill the continuation of the so called Temporary Appropriation Bill deals the Clark Government all the cards in seeking re-election -- and just to make sure it ensures all the cards are marked.

No wonder "Miss Clark indicated yesterday that Labour was unlikely to fund the pledge card through the parliamentary leaders fund, if at all." Who needs it when you've got what Chris Trotter calls (approvingly) "acceptable corruption" on your side.

Where an honest or principled person might be appalled at contemplating, let alone carrying out or defending such corruption, Clark and Trotter have no problem. Both have been thoroughly immersed in post-modernist neo-Marxist structuralism, a mouthful of bullshit that stands for whole reams of freedom-threatening bollocks.

According to the pomo-wanking structuralist, we are all part of a subliminal power struggle of all against all, a struggle between collectives characterised by the battle to control the "inherent power structures" at work in society. As an example of the application of this view, according to the pomo-wanker, no matter how outrageous the behaviour it's not possible for a "minority" racist to be a racist, no matter how overt. In the words of the pomowankers who now write Herald editorials for example,

Nor may Maori activists or their supporters sensibly be called racists. Racism has nothing to do with skin colour, and everything to do with power. Anyone who argues that those arrested in Tuhoe and elsewhere last month are more powerful than the state authority unleashed on them is deluded. Or trying to win votes by any means necessary.

As an intelligent commenter says at Kiwiblog, this is not a redefinition of racism:

This has been the standard definition of racism in NZ universities since at least the early 1980’s. It has been hammered relentlessly into almost three decades-worth of students by lecturers and activitists in the humanities and social sciences divisions.

It’s no surprise at all to me to see it emerging in the editorial page of the Herald in 2007 by those former students. That was exactly the intention of those professors all those years ago.

The commenter, Tom Hunter, explains how this pomo-wank allows the left to countenance corruption without a qualm:

while the notion has been cleverly broadened far beyond racism the real impact has come from its being welded to the thinking of the modern political left. After all, they represent all the powerless and oppressed of this world do they not?

It enables any Left-wing movement to justify almost action to gain the power of the state and hold on to it, for even after holding such power for years or even decades they can still claim that they are powerless, at the mercy of mysterious, hidden forces in society that can be countered in no other way.

For all his harking back to a golden time of traditional working-class Labour action it was actually this post-modern notion of enternal powerlessness that lay at the heart of Chris Trotter’s observation that Labour’s 2005 victory represented “acceptable corruption”.

Hate is Love. War is Peace. Pah, crude! Power is Powerlessness is infinitely more subtle and brilliant.

Such is the power of poor philosophy to blind and corrupt. As long as you position yourself to "speak for the speechless," then anything at all goes including violence, naked corruption and an unconcealed grab at permanent political power. In other words, all the cards you can grab are yours for the taking.

Who the hell needs pledge cards when you've made sure that all the powers of the state are already at your disposal for your re-election campaign?