Tuesday, January 21, 2020

Property Money

Introduction


Property Money is backed by the economy's total wealth:

When the economy's total wealth increases, so does its supply of property money

When wealth decreases, property money supply decreases.

Contrast this with gold-backed money:  A customer deposits gold and the bank gives him a gold certificate.  The gold certificate circulates as money.  The money supply increases.  When anyone demands gold in exchange for the certificate, the bank gives them the gold and the certificate goes out of circulation.  The money supply decreases.

We'll refer to "demurrage" as the bank's cost of securing its gold from thieves, etc. 

Demurrage

Remember that concept.

Let's now look at government as a "bank" that "stores" the economy's wealth.  That store of wealth is the total value of property rights protected from thieves, etc. under law.     As exemplar, we'll look at the most basic property:

A family dwelling.

Building a new house "stores" it under government protection.  The government issues a certificate known as a property title.   However, unlike a gold certificate, the title isn't "liquid" enough to circulate.  This is where property money comes to the rescue.

Building a new house with a liquidation value of, say, $200,000, increases the property money supply by $200,000 minus the sunk cost, say $150,000, of building it.  Sunk cost includes, among other things, wealth consumed by the house: boards, nails, concrete, wires, etc.  So in our simple example, $50,000 of wealth has been added to the economy.  The property money supply thereby increases by $50,000.

Thus every dollar of property money in circulation is backed by a dollar of value in the economy's wealth.

This essay describes how property money satisfies the demand for liquidity while privatizing the delivery of social goods.


But What About Conventional Monetary and Fiscal Policy?


The conventional wisdom hears "property money satisfies the demand for liquidity" and raises its two big bushy eyebrows:

Monetary and Fiscal.


Monetary

Conventional measures of "money supply" are a tiny fraction of the economy's total wealth, so property money seems to inflate the money supply beyond the demand for liquidity.


Fiscal

By focusing on liquidation value, so-called "mark-to-market accounting" applies across the economy.  In the conventional narrative, mark-to-market accounting caused the liquidity crisis of 2007.

Here's the conventional narrative of that crisis:
The liquid value of mortgage-backed securities collapsed.  Major financial institutions were heavily invested in them.  Regulators, following mark-to-market accounting, declared them insolvent.  The cascade of failures caused government authorities to step in and "inject liquidity".  They did.  Crisis over.
That's the conventional wisdom's narrative.

The conventional wisdom doesn't much like discussing the fact that the resulting economic downturn foreclosed mortgages, kicking millions of families out of their homes and giving ownership of them to the financial institutions.  Millions of houses went on the market.  Some influential economists had the temerity to suggest the government tear down family dwellings so as to raise housing prices.  The powerful institutions that demanded liquidity from the government wanted help in making their loan payments.  They didn't want to be "foreclosed".  The government helped them rather than the families those institutions foreclosed.  Government continues to "inject liquidity" to these institutions.  Nowadays they call it "repo market loans".


So... Here's What


The less conventional mind will perceive a curious opposition between the conventional wisdom's 2 raised bushy eyebrows:

Property monetary policy over-supplies the demand for liquidity and property money fiscal policy under-supplies the demand for liquidity.

In fact, property money balances this polarity to satisfy the demand for liquidity.

We'll now dive into that.


A Property's Demand For Liquidity Derived From Its "rNPV"


Economists call the relationship between a property's liquid value and the associated demand for liquidity the "risk-adjusted net present value" of the property or "rNPV".  That's a mouthful but it's a simple concept:

A property's liquid value is the size of a low-risk loan that could be paid off by the property's profit stream.  That liquid value is the property's rNPV.

To illustrate, let's return to our exemplar of the family dwelling.  What is the profit stream of a home?  Economists view houses as does a landlord:
  1. Estimate the incoming cash flow from rental payments by tenants, say $1000/month.
  2. Adjust this downward (discounts) to take into account risks of, say, tenants not paying their rent, etc., say $900/month.
  3. Estimate the business costs of managing the rental property as outgoing cash flow, say $200/month.
  4. Risk-adjust outgoing cash flow (maintenance, utilities, etc), upward (reverse discount),  to be conservative, say to $250/month.
  5. The difference between incoming and outgoing cash flow is the low-risk expected profit stream from the property, $900-$250 = $650/month.
  6. He then asks:  "If I treat the low-risk profit stream as mortgage payments on the property, how much could I borrow at a low-risk interest rate?", say, a 3%, 30 year mortgage would be $154,173.
The size of this loan is called the risk adjusted net present value or rNPV of  the property.  If the investor can buy or build that house for less than $154,173, then it is a profitable investment.  This is true whether he invests his own money or borrows from a mortgage lending institution.

The lending institution's demand for liquidity, associated with that mortgage, is the lending institution's demand for mortgage payments.

The rNPV calculation applies to all investments, hence all property rights in the economy -- not just housing.  It even applies to the liquid value of mortgage lending institutions like the government-sponsored enterprise "Fannie Mae" -- institutions that were endangered circa 2007 due to the liquidity crisis.


How Property Money Establishes the Supply of Liquidity


Imagine every asset were a bank that holds property money reserves for its depositors.  They may deposit or withdraw property money on demand.  All assets, taken together, are an enormous banking system with huge reserves -- one big reservoir of liquidity. 

What keeps property money soundly distributed across these "banks"?


Continuing with the house as exemplar, under the property money regime:
  1. The government issues the landlord title to the house.
  2. The government asks for bids on the title.
  3. Investors place bids in escrow -- property money deposits at 100% of the bid.
  4. The high bid in escrow establishes the liquidation value of the house. i.e. The landlord can, at any time, liquidate the house by accepting the high bid in escrow thereby transferring title to the bidder.
  5. The government charges demurrage (remember that term?) to the landlord in proportion to its liquidation value.
  6. The government also charges demurrage to all bids that are not the high bid in escrow.
  7. The government also charges demurrage to all money not in escrowed bids.

The government -- like the bank that holds gold in safe keeping -- protects property rights.  The cost thereof is covered by demurrage in proportion to the liquidation value.  This is reminiscent of a property tax, but is more accurately described as a use fee for the government service of protecting property rights.

Applying demurrage to all property money, except when part of a high bid in escrow, means that transactions will shift property money between high bids in escrow.  Payment processing institutions will be paying demurrage while executing such a shift. 

This is the incentive to keep all property money as an up-to-date estimate of the liquidation value of the economy.

This is what keeps property money, hence liquidity, soundly distributed across the "banks".



How Property Money Meets the Demand for Liquidity


Recall to the statement:
The lending institution's demand for liquidity, associated with that mortgage, is the lending institution's demand for mortgage payments.
First we have to clear out some confusion about "demand" in the vernacular vs "demand" in the economics argot.  In the vernacular, when I "demand" something, it implies an "or else" enforcement of my "demand".  In "The Law of Supply and Demand", on the other hand, "demand" is merely my willingness and ability to pay some amount of money in exchange for some product or service at that price.  There is no notion of "force".  

So, which of these senses of "demand" applies in the phrase "demand for liquidity"?

Is it my willingness and ability to:


  • take something by force?
  • pay for something I wish to take?


The phrase "demand for liquidity" has the form of someone being willing and able to pay some amount of money to obtain some amount of  "liquidity".  However, this nonsense.  Money is liquidity so it is as though one is saying "I'm willing to pay you $1 of liquidity for $1 of liquidity."


No, what the lending institution is doing when its "demand for liquidity" is a "demand for mortgage payments" is threatening to use force to extract that payment.  

For instance, Shays's Rebellion resulted when lenders demanded payment on debts held by Revolutionary War veterans who, themselves, had not yet been paid for their service in the armed force .  Being unable to pay in the form of money demanded, the lenders sent the sheriffs out to, by force take the farms of the veterans.  This not only deprived veterans them of their ability to provide for their children, it deprived them of the vote since one had to own property to vote!

Since it was such men as Shays who had, by force, provided lenders access to the civil infrastructure, hence the very legal recourse they relied upon in calling in their debts by force, the structural absurdity is grotesquely apparent.  The response was to call forth greater force with which to quash Shays's Rebellion.  George Washington, military leader responsible to the military veterans, and others saw the need for a Federal government capable of paying its military veterans in money acceptable to lenders and quashing all rebellions such as Shays's.  The result was the US Constitution.

So, let's clear up this confusion about "demand" once and for all:

Without those who place their flesh, blood and bone between chaos and civilization, no one is in any position to "demand" anything but them.  All "demand" originates with them.  Any pretense otherwise is an arrogation of power that is ultimately as doomed as is a merchant wielding a piece of paper in a duel with a swordsman.   

With that in mind, let's talk about what such men "demand" of civilization as the only sound basis for talking about the demand for liquidity.

The government then monitors the cost of replacement reproduction (CORR).  Nowadays, CORR is dominated by the amount of money a woman can make by exchanging her most fertile years for gainful employment with the help of birth control and abortion.   The more valuable her characteristics to the economy, the higher the CORR associated with her socioeconomic cohort.  To sustain intergenerational value, CORR must be account for the fact that the economy has a structural bias toward removing from the next generation the characteristics it values in this generation.

Any lesser definition of "cost of living" is a de facto act of genocide by the government against its own people. 

We are now at the crucial issue of the delivery of social goods, so viciously inverted during the so-called "bail-out" of financial institutions by the government.  Families, deprived of jobs during the downturn, were unable to make mortgage payments.  Many were driven to bankruptcy and eviction from their homesteads -- homesteads that those institutions confiscated with government's help.  Many of these held prime mortgages, but were lumped in with irresponsible subprime homeowners by the vicious narrative of conventional wisdom.

In a well-functioning property money regime:

A monthly dividend is unconditionally and equally sent to those citizens who are responsible for placing their flesh, blood and bone between chaos and civilization.

Such citizens are "sovereigns" as they embody the force inherent in any society.


Sovereigns are responsible for the support of all social goods delivered to the society, starting with their own replacement reproduction.


Sovereigns possess the liquidity not only to meet their own mortgage payments, but to "bail-out" their fellow citizens via their donations to the civic culture that once was the backbone of charity in the United States of America:

Fraternal organizations and churches.

In a liquidity crisis sovereigns will indirectly "bail-out" financial institutions according to the degree to which those institutions match the values of the civic culture of community charities.

The supply of liquidity adjusts to keep CORR (cost of replacement reproduction) constant as follows;

When the CORR increases, the government increases the demurrage charges, thus taking property money out of circulation via property owners.

When CORR decreases, the government decreases demurrage, thus putting money into circulation via the sovereigns.


What About Financial Weapons of Mass Destruction Called "Derivatives" ?


Before the "liquidity crisis", Warren Buffet said "... derivatives are financial weapons of mass destruction..."  Then they exploded, devastating families.

The substance of Buffet's comment boils down to the fact that mark-to-market accounting is not structural as it is would be with property money.

Derivatives "bundle" other assets together.  Sometimes, the way they are bundled is too opaque for proper estimation of their liquid value.  This is particularly true when debt (or other liability) is bundled together with wealth to form derivative property rights.

Returning to our simple exemplar of home ownership, let's create a "derivative" that "bundles" title to the home together with liability for a home equity loan.  In other words, there are two "titles" bundled together:



  1. a positive value to the owner of the home title.
  2. a negative value to the owner of the liability for the home equity loan.

The new "property" has a liquid value that is derived by subtracting the liquid value, to the lender, of the home equity loan, from the liquid value of the home.

Under the current system, if someone wants to purchase this derivative, they must apply their own mark-to-market accounting to both underlying assets to estimate its liquid value.   Now, imagine a deregulated banking industry that can bundle huge numbers of houses and home equity loans into a single "property" derived from them.  These are called "mortgage-backed derivatives".  Being deregulated, banks play fast and loose with mark-to-market accounting estimates of their real liquid value.

And this is just the start...

Mortgage insurance properties derive from mortgage-backed derivatives.  Insurance of mortgage insurance (mortgage reinsurance) derives from mortgage insurance.

High atop this pyramid of derived property rights, it becomes virtually impossible to see all the way down to the bottom to the underlying, wealth in the economy so as to come up with an accurate liquid value.

Property money solves this by declaring any property that is protected by law to have a liquid value determined by its high bid in escrow.


Monopolies


Finally a word about how property money deals with private monopolies, since they are increasingly privatizing tyranny:  censorship if not punishment of individuals not compliant with orthodoxy.

Property money, by using the liquid value of title to a business, in assessing its demurrage, burdens monopolies with financial support of social goods via sovereigns.  This is because as the monopoly profits become apparent to all, the high bid in escrow (hence liquid value) goes up.  If any mindless investor could make the same level of profit as the current owners of the business, the high bid in escrow increases to the point that those profits are siphoned off into demurrage.

Bringing this down to earth:

The demand for the most primitive property, land that provides food and materials to house and clothe a family -- enabling Replacement Reproduction -- increases with the size of the economy.  The more ways in which land can be put to use by a civilization's economy, the more demand will exist for it.  "They aren't making anymore of it," as the land speculator, correctly, believes.

This is the most primitive example of civilization's so-called "network effect" giving rise to monopoly rents.   The connections between businesses in the economy form a network.  The number of potential connections goes up as the square of the number of businesses:  1000 businesses?  1 million potential connections.  Each connection adds to the aggregate demand for vital assets like land.

The phrase "land speculator" has a bad connotation for a good reason:  By purchasing a piece of land, he is enjoying the protection of that property right even though its value is increasing due to others' investments in growing the civilization's economy.  He can sit on vacant land and do nothing with it but reap the increase in its liquid value as civilization grows.  If he puts that wealth to influencing government, he can even shift taxes off of land and onto the income of young couples trying to have children.  They may be unable to afford to responsibly raise a family due to the cost of land.  If that young couple represents the kind of responsible people required to protect property rights, there comes a point when they will cease respecting land owners.  At that point the top heavy civilization crushes its weakened foundation.  

Civilization collapses.

I used land as an exemplar but there are many such "network effects" at work in civilization and it is from these that civilization's power derives.  Today's Internet giants all rely heavily on capturing the value of network effects, just as did the original telephone network monopolies:

Every new customer adds to the value of the network in approximate proportion to the number of other customers because that is the number of potentially valuable connections.  If a private entity owns a network of customers, as do, for example, Facebook, Twitter, Youtube, Paypal, Ebay, etc., the larger their customer base, the more unrealistic it is for any competitors to discipline them.  

As Lilly Tomlin's character Ernestine the phone operator like to tell customers:  "We don't care.  We don't have to.  We're The Phone Company."

So, if an investor doesn't have to care about his monopoly because he reaps the rewards of civilization anyway, other investors will merely "park" their property money in the high bid in escrow for for that monopoly.  Eventually, someone will come along who has a better use for the monopoly -- meaning he thinks he can turn a higher profit with it by, say, firing Ernestine and providing better customer service.  He'll bid higher than other investors and thereby impose a higher demurrage rate on the current owner who will be motivated to get out of that business, and turn it over to the entrepreneur who, unlike "The Phone Company", does "care".

The impact on Internet monopolies would be to clean out the political animals who have latched their suckers onto those companies, there to indulge their whims regarding politics at the expense of the general public.

Meanwhile, the young men who place their flesh, blood and bone between chaos and civilization, will be reaping the network effects of civilization in the form of outbidding the economy for the fertile years of young women, thereby preserving for future generations the very characteristics demanded by the civilization.

Tuesday, December 24, 2019

Chisala Helps HBDers Walk Back the Sale

The virtue of Chanda Chisala's response to Lance Welton is that by knocking down the minor fallacies of the Human BioDiversity (HBD) brain-trust, he relies on major fallacies they've been sold.

Why is this virtuous?

HBDers might, finally, question these major fallacies.

Ever hear the phrase "talking past the sale"?  It's a salesman's gimmick.  Prior to closing the sale, the salesman asks his customer:  "What color car would you like?"  In so doing, he enlists the customer in subverting his own decision-making process.  In the customer's mind, he has accepted the premise that he bought the car.

What major fallacies did HBDers buy?  

From most, these major fallacies are:
  1. Consensus can precede consent.
  2. Popper's "falsification" criterion is the gold standard of science.
  3. Nurture can't be 100% determinative.
We'll take these in reverse order and, hopefully, end up walking back the fallacious premises HBDers bought.

Major Fallacy #3

Nurture Can't Be 100% Determinative  


For example, I recently laid the following rhetorical trap for a Swede who, in the presence of wealthy associates, piously asserted the genetic equality of intelligence between races.

I laid the trap by amplifying his piety with, "Intelligence is 100% a product of nurture."
"THAT'S ABSOLUTELY RIGHT!", thundered the gelded Thor.

At which point I further amplified, "Yes, if I put a bullet through your head, your IQ will decrease by 100%!"  He abruptly switched to another topic.

For relevance, contrast Chanda Chisala's own words he quotes in establishing his race-realist credentials:

The average (genetic) potentials [emphasis JAB] of intelligence could indeed be as varied as the heights of different populations.

Do you see it?

Here "it" is:  

100% destruction of potential is something environments are fully capable of achieving -- and cheaply at that.  A .22 bullet costs a nickle.  Since wealthy individuals are known for a keen appreciation of costs -- the gelding was wise to quickly change the subject.  Indeed, destruction of potential is the central thesis of "anti-racism" but only when the potential being destroyed is that of non-whites.  If only the decades of programs and preferences had cost a nickle per supposed beneficiary of "anti-racism"!  We can see why HBDers are loathe to legitimize an argument so-abused as to impose such costly, an actually destructive, projects.  

But why didn't Chisala propose this destruction of potential in the case of UK white youths?  Does he really believe that decades of government-imposed racial preferences for non-whites throughout the West have had insignificant deleterious impact on white youths?

Perhaps.  But surely Chisala might have anticipated that HBDers would, in his words, "change the goalpost" once again:  Use the most popular argument among social scientists to explain differential outcomes.  After all,  HBDers, in Chisala's words "exude the obstinate fervor of pseudoscience" by "changing the goalposts" despite having their hypotheses "falsified".  So why not?


Major Fallacy #2

Popper's "Falsification" Criterion is the Gold Standard of Science



For example, we have Chisala quoting someone of Richard Lynn's stature, who sets the ultimate "goalpost" in the statement:

If a multiracial society is found where these race differences in intelligence are absent, the evolutionary and genetic theory of these differences would be falsified [emphasis JAB]. Those who maintain that there are no genetic differences in intelligence between the races are urged to attempt this task.  

Lynn, long ago bought the pop philosophy of science called "naïve falsificationism".  Popper muddied scientific philosophy.  He did so by introducing a qualitative "falsification" criterion so as to obscure the prior, and superior, quantitative criterion of simplicity:  Ockham's Razor.  Ockham's Razor has long been the Gold Standard in the philosophy of science.  Unlike "falsification" it is quantitative: Choosing the simplest of proposed theories.  Moreover, Ockham's Razor has been rendered measurable in Algorithmic Information Theory.  AIT posits when theories are presented with a dataset of observations, the most informative theory best-compresses the dataset.  Fewer bits means better predictions.  The theoretic maximum compression is called the dataset's Kolmogorov Complexity, measured in bits of information.  AIT is now applied as the universal measure in artificial general intelligence.

Remember that phrase -- "general intelligence".  

Popper's popularization of a qualitative Fool's Gold Standard in the pop philosophy of science did untold damage to Western Civilization.  He performed this feat at the very same instant in history that Algorithmic Information Theory rigorously formalized Ockham's Razor.  In AIT a so-called "falsification" merely increases the number of bits in the theory -- its approximation of the dataset's Kolmogorov Complexity.  Oh, to be sure, Popper gestured toward a more quantitative, less naive "falsification" standard, but that was merely a backhanded recasting of Ockham's Razor, rendering his entire project an obscuration.

Popper obscured AIT for a half century.  But worse, he did so at the dawn of the computer age when AIT should have revolutionized the social sciences as the Gold Standard criterion.  It is only now that AIT's superiority as model selection criterion is starting to be recognized by a few with deep theoretic understanding of universal "general intelligence".   General intelligence is at the heart of science.  Aided by Popper's obscurationist rhetoric, the social pseudosciences have obscured social causality even as they imposed, on vast populations, experimental treatments with no experimental controls, such as mass immigration.  This they achieved in large measure by eliding the rigorous, universal model selection criterion of social causality afforded by AIT.  This is the kind of damage Popper did to Western Civilization's intelligence, in theory, practice and consequence.  This damage is, by the way, evident in continued attempts to statistically refute pseudoscientific models of social causality without a model selection criterion that avoids specious "information criteria" typically utilized by social scientists, such as BIC, AIC, etc. which, unlike AIT, fail to bring, both, errors in prediction and model complexity into the same, commensurable definition of "bits" so that adding them together makes sense.

We should not, therefore, be surprised when someone of Chisala's rhetorical excellence amplifies Lynn's quote with, "I expected the HBDers to at least admit, by their own standard, that this simple unambiguous falsification standard had apparently been met."  Chisala performs a Popperian obscuration when he touches on, but doesn't own, Ockham's Razor in his quantitative statement, "Remember, the more [emphasis JAB] universal your claim, the more [emphasis JAB] it can potentially be falsified by a simple singular unambiguous event, which is why Lynn was right to give such a simple falsifying standard."  

Chisala's proportional phrase "the more" demonstrates that he, unlike Lynn, is aware of "naïve falsificationism", even as he bases his argument on Lynn's fallacious use of it.  In so doing, Chisala captures The Ultimate Prize -- a prize offered by Lynn in desperation to have anyone correspond on anything remotely resembling a collegial basis.  Lynn should not have been so desperate as to think past the sale of Popper's "contribution" to Western Civilization.  Both of these errors are understandable given the desperate straits of Western Civilization's academy due to 20th century intellectual movements, as evidenced by Brimelow's introduction welcoming Chisala's correspondence.

Major Fallacy #1

Consensus can precede consent. 


Consensus reached under duress is a false consensus.

The context of discourse with rhetoricians like Chisala is a regime that violates the consent of those that dissent from the prevailing, anti-HBD, orthodoxy.  The HBDers have bought the unstated premise that scientific consensus can be reached while violating consent of the participants. 

Proponents of government enforced anti-HBD orthodoxy bear far more than a mere burden of proof in any discourse toward a consensus.  They bear an ethical responsibility to abjure such force, and do so as a prerequisite to entering into scientific discourse with their non-consenting colleagues.  I am speaking here not of consent to entering into scientific discourse, but government imposition of social theories on entire populations against their will.  The majority of HBDers do not consent to their communities being subjected to experimental treatments based on anti-HBD theories.  Chisala, as among the most ethical of all social scientists, must own up, with due prominence, to the illegitimate advantage he, and they, enjoy.  But he and they, must do more than that.

They must prominently and persistently advocate for the societal investment required to sort proponents of social theories into governments that test them.

Can HBDers do as much for themselves?

Only if they can walk-back the sale.

Sunday, May 05, 2019

A Practical Theory of Equality Is Relative

"Equality" is a "problematic" concept due to a lack of nuance when applied to practical matters such as human affairs.

Take, for example, the standard axioms of equality theory:

x=x
if x=y then y=x
if x=y and y=z then x=z

In human affairs, many people extend equality theory with one more axiom:

∀x,y(x=y)

That is, everyone is equal to everyone else.

This doesn't get one very far in practice.

Now does it?

On the other hand, let's talk about relative equality theory with a new notation:

"x(y=z)" which means  "x regards y as the same as z".

Reformulating the standard axioms of equality theory:

x(y=y)
if x(y=z) then x(z=y)
if x(y=z) and x(z=w) then x(y=w)

Now, we're in a far more interesting domain of discourse, aren't we?

For example, let:

x = "US Constitution"
y = "Some White Guy"
z = "Some Black Guy"

We have:

US Constitution(Some White Guy = Some Black Guy)

In contrast, if we let:

x = "Race"
y = "Some White Guy"
z = "Some Black Guy"

We have:

Race(Some White Guy ≠ Some Black Guy)

(Yes, I know, I didn't introduce the axioms for "≠" yet... so ban me from Facebook.)

PS: I can't claim credit for this, very powerful, notion of equality. See Tom Etter's paper, "Three-place Identity".

Saturday, April 27, 2019

Ockham's Guillotine: Minimizing the Argument Surface of the Social Sciences

Established interests view "Trumpism" as foreboding a modern "storming of the Bastille".  They wonder, "What form of guillotine will populists roll out this time?  Will my head lop in a bucket?"

This article suggests rolling out an inherently judicious "guillotine":

Ockham's Guillotine

Ockham's Guillotine lops only the metaphorical heads of the social pseudoscience Bastille.  It precisely guides Ockham's Razor down the grooves spanning only those necks.

This it does by selecting the best unified model of society, based on a single number:

The model's size, measured in bits of information.

Deprived of "wiggle room" for their "lies, damn lies and statistics", social pseudoscientists will be helpless as the Razor slips, the buckets receive and the crowds roar.

The science for Ockham's Guillotine is here; its mechanisms driven by one of the most powerful forces in history:

The explosion of computation and social data detonated by Moore's Law.

Harnessing this raw power in the design of Ockham's Guillotine requires a theory equal to the task:

Algorithmic Information Theory

Algorithmic Information Theory (AIT) is the computational form of Ockham's Razor:

The Algorithmic Information content of any data, including social data, is the size of the smallest program (algorithm) that outputs that data.  That program necessarily embodies the smallest model of the data.

AIT founds the exploding field of Artificial General Intelligence (AGI).  AIT is sometimes called "Algorithmic Probability Theory" or "Solomonoff Induction".

The final advice given by seminal artificial intelligence figure, the late Marvin Minsky:
"The most important discovery since Godel is Algorithmic Probability which is a fundamental new theory of how to make predictions given a collection of experiences... This is a beautiful theory... that will make better predictions than anything we have today and everybody should learn all about that and spend the rest of their lives working on it."
By "experiences" Minsky meant observations/measurements in the form of data, such as social measurements.

Minimizing the Argument Surface

In cybersecurity, the concept of "attack surface" is the number of ways that an external actor can interact with the system.  Each way in which there is an interaction presents a potential vulnerability to attack.  These interactions can be viewed as "dialogues" based on the communications protocols so, in that sense, they can also be viewed as "issues" over which "arguments" can obtain.

Human conversations between potential adversaries are similar in that the more ways an issue presents itself, the more ways in which sophistic arguments can exploit the social contract upon which civil discourse obtains.  The social sciences are particularly problematic in this respect, involving a myriad of "issues" over which arguments may turn into sophistic exploits.

Ockham's Guillotine reduces the argument surface of the social sciences to just two issues:

1) Is the basis of the artificial intelligence industry valid?
2) What data is relevant to social policy decisions?

#1 is supported by the most powerful modern force as previously described:  The explosion of data, computation and economic incentives behind AGI.

#2 can be dealt with by the simple expedient of not arguing about it:  If the sophists demand that their data be included in the corpus, then let it be included.  This is enabled by the explosion of computation capacity on the one hand, and the ruthless nature of AIT on the other.  AIT is ruthless in the sense that any biased data will best be modeled by algorithmic explication of said bias that corrects the data accordingly.  Then the corrected data will be brought into consilience with the larger body of knowledge/data rather than standing alone, which requires more bits of information.

Perhaps the most ruthless approach to "nuking the social pseudosciences" would be a monetary prize for improvements in the unified model of society.  An exemplar of this kind of prize is The Hutter Prize for Lossless Compression of Human Knowledge, which targets natural language modeling based on Wikipedia's corpus.  Prize awards are paid out for each incremental improvement in the compression of Wikipedia.

A prize of this sort, targeting a unified model of society could trigger an avalanche of activity resulting from the social pseudoscientists attempting to take on the juggernaut of industrial artificial intelligence at the same time that hundreds or thousands of young people, eager to prove their chops (and earn money) increasingly embarrass the corrupt authorities of academia.

A preliminary data set of a wide range of longitudinal social measures for Ockham's Guillotine is available as an example at github.

Thursday, April 04, 2019

Chlorine Sequestration During Exponential Remediation of Civilization's Footprint

UPDATE: The research below exposed a possible new way of synthesizing EdenCrete from in situ resources -- one that bypasses the Calera process hence obviates the chlorine disposal problem.  It may also reduce the energy per mass.  This would reduce the doubling time and simplify the process.  A future article will discuss the implications.  For now, this article remains the best approach to balancing the geochemistry of the reference proposal.

The greatest challenge of the proposed "Exponential Remediation of Civilization's Footprint" is the necessary sequestration of chlorine evolved during the production of concrete, from oceanic salt ions (Ca++, Na+, Cl- and CO3--), for 70,000 Bowery Atolls.  The cited Calera process concrete produces 71% of its weight in chlorine (see "Comparison With Land Based Geologic Sequestration of CO2" below) while sequestering CO2 in the atoll concrete.

Geologic Sequestration


Later, we'll compare the magnitude of chlorine to the magnitude of land-based geologic sequestration of CO2, which can support many times the CO2 projected to be sequestered in the Bowery Atolls. But that requires transportation of evolved chlorine to those sites.  So first, we'll look at the in situ potential for geologic sequestration.

In situ resource utilization is highly desirable in an exponentially growing system.  The civil engineering sense of "in situ" is applicable:  "construction which is carried out at the building site using raw materials... which are present at or near a project site".  In situ resources obviate their transportation cost which, in exponential growth, can represent a severe constraint.  In the present case, resources include not only those that go into the atoll concrete, but also the resources to dispose of waste: geologic formations under the tropical doldrums suitable for chlorine sequestration.

Look at this map of deep sea marine sediments.

Map showing distribution of marine sediments.
  • Gray: land.
  • White: Sediments of the continental margin.
  • Blue: glacial sediments.
  • Orange: land-formed sediments.
  • Brown: pelagic clay.
  • Green: siliceous sediments.
  • Yellow: calcareous sediments.
Notice the eastern equatorial Pacific (doldrums) sediments are yellow, with green just to the north.  Underlying the construction site are "siliceous" and "calcareous" sediments.  There are sand (very fine grained, suitable for EveCrete binding) and calcium carbonate sediments, respectively, available in situ.

Another map disagrees somewhat but substantially supports the general point:



Sand is used in the concrete.  Calcium carbonate sediments lying about 1000ft beneath the ocean floor, offer virtually ideal chlorine sequestration via the reaction:

CaCO3 + 2HCl => CaCl2 + H2CO3 + heat

Chlorine sequestration is thereby turned into H2CO3 (carbonic acid) sequestration, 1000ft beneath the already several-kilometer deep ocean floor.  The H2CO3 will act as a connate fluid that is gradually expressed from the sediment, upward toward the ocean floor 1000ft above, over geologic time during lithification:  the process turning sediments to sedimentary rock.  Unlike water, the usual connate fluid, this particular connate fluid chemically interacts with the CaCO3 sediments via carbonate buffering.  This provides additional environmental protections in the form of pH stabilization and slowing of the already geologic time rate of reentry to the biosphere.

Is There Enough Sediment To Contain All That H2CO3?


In a word: Yes.

The volume of in situ calcareous sediments is on the order of 10,000 times greater than the total volume of H2CO3 evolved (which is comparable to the volume of Cl2 evolved from the 70,000 Bowery Atolls).  If only 1% of that volume is utilized for geologic sequestration, the volumetric concentration would still be only 1% of that reduced volume.

How Costly Is the Geologic Sequestration?


Existing deep sea drilling technology suffices as an economic existence proof.  A deep sea drilling platform costs about 10% of the net present value of an atoll.  Even if each atoll requires its own drilling platform, this is not blocking.  If chlorine is delivered to the sediment with ocean floor of about 12,000ft, liquid chlorine density of 1.5625gm/ml will provide about 8,000psi over-pressure at the ocean floor due to its higher density than water.

12000ft;1.5625g/ml?psi
(12000 * foot) * ([1.5625 * gramf] / [milli*liter]) ? psi
= 8128.6473 psi

This is well within the engineering limits of deep sea drilling.  Going 1000ft deep into CaCO3 sediments will subtract about 1,000psi from that injection pressure.

1000ft;2.7g/ml?psi
(1000 * foot) * ([2.7 * gramf] / [milli*liter]) ? psi
= 1170.5252 psi

The compressive strength of concrete is only about 5,000psi so even if the CaCO3 sediment is in the form of concrete, the injection pressure at that depth will combine with the corrosive nature of Cl2 will fracture the sediments, permitting the ingress of liquid chlorine.

The connate fluid already in the sediments will be dominated by H2O, thereby producing HCl via the reaction:

2Cl2 + 3H2O => 5HCl + HClO3 + heat

It is this HCl that will participate in the reaction already described that produces H2CO3.

Comparison With Land Based Geologic Sequestration of CO2


Land-based geologic sequestration capacity is known to be vastly greater than that required for sequestering the CO2 sequestered by 70,000 Bowery Atolls.

As it turns out, the liquid volume of CO2 sequestered in the concrete of the artificial atolls is significantly greater than the liquid volume of Cl2 produced.

100000people/atoll;7e9people;20km/atoll;(20/100)*2000tonne/m?tonne
 = 5.6E11 tonne
Total CaCO3 mass of atolls.

(12/100)*5.6E11 tonne?tonne (12 / 100) * (5.6E11 * ton_metric) ? ton_metric
 = 6.72E10 tonne
Total C mass of atolls.

(40/100)*5.6E11 tonne?tonne (40 / 100) * (5.6E11 * ton_metric) ? ton_metric
= 2.24E11 tonne
Total Ca mass of atolls.

321003271mi^3;0.04%*1020kg/m^3?tonne
= 5.45904E14 tonne
Total Ca mass in the entire ocean.

(2*35.45/100)*5.6E11 tonne?tonne
= 3.9704E11 tonne
Total Cl2 mass evolved during atoll construction from Calera process.

(44/100)*5.6E11 tonne?tonne
= 2.464E11 tonne
Total CO2 mass sequestered during atoll construction from Calera process.

1.5625g/cm^3;3.9704E11?m^3
= 2.541056E11 m^3
Total (liquid) Cl volume as geologically sequestered (prior to mineralization)

1101 kg/m^3;2.464E11 tonne?m^3
= 2.2E11 m^3
Total CO2 volume as it would have been geologically sequestered (prior to mineralization)







Friday, March 29, 2019

Now Amassing The Army aka #HighNoonPatriots

TL;DR

As many days as you can, at high noon central time,  do SOMETHING VISIBLE (and legal*) petition for redress of grievances.  Include the hashtag #highnoonpatriots to show solidarity with others.  Do it anonymously as appropriate.

END TL;DR


About 1 in 3 Americans believe that civil war will breakout in the near future.  Individuals are increasingly vulnerable to mobs, particularly as mobs capture American institutions established to protect the individual from mobs.  Individuals, powerless against and fearful of the growing power and virulence of mobs, seek safety in numbers by joining mobs.

First we must answer the question, "What happened?"

Next we must answer the question, "How can individuals protect themselves against institutionalize mobs?"


What Happened?


Centralization of power forces everyone, as a matter of self defense, to vie for the center of power.  This encourages mob mentality.  The centralization of power in America has gradually empowered mobs of all stripes.  The fatal blow was the The Immigration and Nationality Act of 1965 steadily increasing immigration decade after decade -- a policy overwhelmingly opposed by AmericansWhy was this the fatal blow against the individual?  Because about 80% of naturalized citizens vote for greater centralization of social policy in the Federal government.  

That's why.  

And that's what happened.


How Can Individuals Protect Themselves?


Act together or act individually and hang individually.  

First and foremost, this means synchronized action.


Why Synchronized Action?


Think about the public "shutting down the Congressional switchboard" in response to mass media inspired outrage.

Any synchronized action is vastly more effective than asynchronous action because of the effects of transients on networks upon which civilization depends

Start small and symbolic but synchronized. This will build a pattern of victory.


How Can Individuals Synchronize?


Do something visible to others at high noon central time.


Every Day?


As many days as you can.




*Prior versions of this article recommended less frequent but more targeted and even costly actions, as a way of providing quorum sensing in a decentralized manner impervious to managerial class censorship.  Daily and less targeted, but still synchronized, action will provide a bigger tent.

Monday, February 11, 2019

The Expropriation Condition For a Single Tax On Wealth

Perhaps the greatest fear of a wealth tax, more accurately called a tax on liquid value of net assets, is that it would expropriate liquidation value.  To calculate the level of expropriation it is helpful to assume a single tax on wealth and then measure the difference in liquidation value.  This can be done by subtracting the owner's original value under activity (income) taxation, from the prospective buyer's value under asset (wealth) taxation:

\[\frac{  \mathit{buyer\_ income}-\mathit{buyer\_ expense}}{\log{\left( \mathit{buyer\_ interest\_ rate}+\mathit{asset\_ tax\_ rate}+1\right) }}-\frac{\left( 1-\mathit{income\_ tax\_ rate}\right)  \left( \mathit{owner\_ income}-\mathit{owner\_ expense}\right) }{\log{\left( \mathit{owner\_ interest\_ rate}+1\right) }}\]

WHERE
income_tax_rate = the aggregate tax rate on economic activities, such as income, capital gains, value added, etc.
asset_tax_rate = the net asset tax rate (on liquid value)
owner_income = the owner's expected gross periodic income from the asset
buyer_income = the buyer's expected gross periodic income from the asset
owner_expense = the owner's expected periodic expenditure on the asset
buyer_expense = the buyer's expected periodic expenditure on the asset
owner_interest_rate = the periodic interest rate paid by the owner in borrowing to purchase the asset
buyer_interest_rate = the periodic interest rate paid by the buyer in borrowing to purchase the asset

The more negative this difference goes, the greater the expropriation of liquid value.

It is important to note that the above formula assumes the buyer does not enjoy a standard deduction -- for example a homestead deduction as normally protected under Chapter 7 bankruptcy.  Such a deduction is an ordinary feature of wealth tax proposals and would frequently come into play in a change to single tax on wealth as tenants  purchase their residences from landlords.

The derivation follows:

\[\tag{profit_stream}\frac{\left( \mathit{income}-\mathit{expense}\right) \, \left( 1-\mathit{income\_ tax\_ rate}\right) }{{{\left( \mathit{interest\_ rate}+\mathit{asset\_ tax\_ rate}+1\right) }^{t}}}\]

\[\tag{net_present_value}\frac{\left( \mathit{income}-\mathit{expense}\right) \, \left( 1-\mathit{income\_ tax\_ rate}\right) }{\log{\left( \mathit{interest\_ rate}+\mathit{asset\_ tax\_ rate}+1\right) }}\]

\[\tag{AT_ NPV}\frac{\mathit{income}-\mathit{expense}}{\log{\left( \mathit{interest\_ rate}+\mathit{asset\_ tax\_ rate}+1\right) }}\]

\[\tag{IT_ NPV}\frac{\left( \mathit{income}-\mathit{expense}\right) \, \left( 1-\mathit{income\_ tax\_ rate}\right) }{\log{\left( \mathit{interest\_ rate}+1\right) }}\]

\[\tag{Buyer_NPV}\frac{  \mathit{buyer\_ income}-\mathit{buyer\_ expense}}{\log{\left( \mathit{buyer\_ interest\_ rate}+\mathit{asset\_ tax\_ rate}+1\right) }}\]

\[\tag{Owner_NPV}\frac{\left( 1-\mathit{income\_ tax\_ rate}\right)  \left( \mathit{owner\_ income}-\mathit{owner\_ expense}\right) }{\log{\left( \mathit{owner\_ interest\_ rate}+1\right) }}\]