17 June 2012

"Pragmatism Refreshed" ends: so does Lane Pryce

Final entry for this blog. From this day forward, I'll be blogging at Jamesian Philosophy Refreshed, and the URL will be http://jamesian58.blogspot.com/ So for now, let's say something about Mad Men, which has also of late been about endings!

Episode 12 will be dominated in the mind of most viewers by the death of a character who has been a mainstay of the show since the beginning of the third season, Lane Pryce, as played with uniform greatness, by Jared Harris.

This death, a suicide, happens as most of the office continues to float on a sense of elation about landing a big automotive account: Jaguar.
The writers bring these two facts: Lane’s despair and his co-workers’ elation, into several layers of collision. We see for example that the Jaguar of the time was mechanically a rather shoddy piece of work, and this in fact dooms Lane’s first effort to kill himself, by asphyxiation. He can’t get the ignition to work when he needs it to!      

When Lane does manage to kill himself, it is with a noose, in his office, and after typing out what should have been a suicide note but was in fact just a “boilerplate” letter of resignation.

Why not pills, Lane? The thing about pills is: they leave some room for doubt. The coroner may call it an accidental overdose rather than a suicide, which may make a difference to grieving relations and their insurers.  A noose, though, doesn’t leave any doubt. So does that mean that a real suicide note would have been, in methodical Lane’s eyes, redundant?
Also, the events leading up to the suicide are designed to leave Don feeling as guilty as possible. Don demanded that resignation, after discovering Lane’s embezzlement. He thought that Lane would and could recover from this and make a new life for himself back in England. Indeed, he said as much. “I’d had to start over a couple of times in my life. This is the worst part,” he assured Lane.
Well, no. Don is not Lane and neither of his start-overs seems analogous. Don learns how badly he had misjudged the matter with that chipper assurance only when he sees the body.
Likewise episode 13, the season finale, will likely be dominated in many minds by one scene – that in which Don encounters Lane’s widow, Rebecca. Indeed, the title of this episode is “The Phantom,” indicting I think that the writers meant for Lane to hang over the whole of it. Except of course there is another “phantom” involved. The titles always have multiple meanings. Don thinks he sees his dead brother.   
But let’s get back to Don and Rebecca. He gives her a check meant in effect to buy out Lane’s share of the partnership. She accepts it, but wants Don to know that however this may alleviate his own sense of guilt, it does nothing to make matters square between them. She blames the agency for giving her husband “ambition.” She appears to see him as always having been a frail reed, always best shielded from ambition and other potentially sharp things.
Also, it is in the course of this confrontation that Rebecca discloses she found the photo of a mystery woman in Lane’s wallet.  The photo brings us back to the start of the season.
I’ve wondered through this season why the writers would introduce that photo (and the trouble to which Lane went to keep it, and the single phone call he made to the woman it represents) without doing more with it than they have. I still wonder.  Will Rebecca start looking for her? Is that one respect in which Lane’s phantom will continue to hover next season?
Strong season over-all. The series' best since but not inclusive of its first.  

16 June 2012

New Lions for the Chariot

Starting next week, this blog will have a new name and URL.

I believe I know why it has become so difficult to post on this blog in recent weeks. I've just been doing it too long.

My new blog will have the name, "Jamesian Philosophy Refreshed." That's a better name: it is the philosophy of William James I most admire, not "pragmatism" in the broader and narrower sense. Aspects of James' philosophy that don't come under that label do come within the scope of my admiration, and various pragmatists who had views at odds with James' -- less so.

I hope and expect to see you all on the other side.

I'll try to leave one final blog at this dysfunctional site, tomorrow.  I may need some lions to pull my chariot forward, though.

15 June 2012

Not the O.K. Corral

My recent reading includes THE LAST GUNFIGHT by Jeff Guinn.

This is a 2011 publication, from Simon & Schuster, about the showdown popularly known as the Gunfight at the OK Corral. More broadly the book is about Tombstone AZ and its surroundings in its heyday as a mining town.

And a mining town is what it was. Its brief golden age began with a major strike in 1878 of so-called “horn silver”  in the San Pedro Valley. The location of the strike was too far away from Tucson for that town to serve as a home base for the wave of prospectors who inevitably followed the first strike. So Tombstone grew up -- impression one gets from this book is that it almost immediately sprouted up out of the Arizona Territory desert floor!  and fulfilled just that function.

At its height it was important enough that when a San Francisco based acting troupe did a tour of the southwest, bringing a performance of the hot new comic opera “HMS Pinafore” to the unwashed – Tombstone was inevitably one of its stops.

But nowadays we only remember Tombstone for the confrontation on October 26, 1881, when seven men faced off, four to three, separated by only six feet of air, and fired about thirty shots at one another over the course of about as many seconds. It would have been four against four except that Ike Clanton, who had been very busy for hours provoking this confrontation, actually fled the scene just as guns were being drawn, or perhaps even five to four had not another of their companions likewise made himself scarce.

Ike Clanton’s brother and two of his friends were killed in that exchange. Among the party opposing, Doc Holliday and two of the Earps were seriously injured. Only Wyatt Earp walked away unscathed.

The fight was not literally at the OK Corral, although it is known as the “Gunfight at the OK Corral” because that became the title of a movie in 1957, which was still the golden age for westerns.  John Sturges’ movie made no pretense of historical accuracy.

Nonetheless, the connection between this confrontation (a block away) and that particular corral is not entirely accidental.  At one point in the crowded timeline leading to those terrible 30 seconds, the Clantons and their allies postured in that corral, in what Guinn calls “the worst tradition of overweening male pride” they were there “boasting loudly about what they would do if the Earps were foolish enough to bother them any further.”

There are a lot of reasons to recommend this book. I won’t recite them now, though. I’ll simply say that it inspires thought not only about what happened, but about how we know what happened, about the epistemological troubles in sorting through the conflicting accounts.

14 June 2012

Classic Johnny Carson

Two jokes from Junes long gone.

On June 14, 1985, Johnny asked the Tonight Show audience whether they had ever been to a barbecue in Beverly Hills? It's a little different from a barbecue elsewhere. "What your chauffeur does, he drives the hamburger patties over to a tanning salon."

On June 8, 1989, Johnny helpfully pointed out that the Census Bureau had taken to using combo forms for city names to describe metropolitan areas. Thus, there was the area between Chicago and Pittsburgh, known as Chipitts. "I'm not making all this up. Now, if you live exactly midway between Burbank, Gardena, Dublin, Cheeseborough, Smolensk, and Freiburg, Germany, you are in Burger-Double-Cheese-Small-Fries."

And here is a photo of Johnny in Carnac regalia, just for the heck of it.

10 June 2012

Schopenhauer on Music

"For music everywhere expresses only the quintessence of life and of the events taking place in it, never these themselves, and so distinctions within these do not always influence it. Precisely this universality, exclusive as it is to music, together with the most exact precision gives music its high value as the panacea for all our suffering. Thus if music ties itself too closely to words or tries to model itself on events, it is tryingf to speak a language that is not its own. Nobody has avoided this error as completely as Rossini; which is why his music speaks its own language so clearly and purely that it has no need of words at all and retains its full effect when performed in instruments alone." That sounds rather equivocal praise for Rossini, who composed for opera, i.e. specifically for words and a stage set, not the concert halls Schopenhauer seems to have in mind here.

09 June 2012

In Defense of GwBC: Conclusion

I am confident I have accomplished all I meant to accomplish with this series of posts, stimulated as they were by Gravelle's critique of my book, GwBC. In conclusion, I will speak to the notion, widespread today, and present in Gravelle's review, that a moderate and non-accelerating level of inflation is a good thing, in that it is predictable on the one hand and it accomodates the growing demand for money that comes with a growing population and economy on the other. This notion is presumably why Gravelle instructed me that only an "accelerating" rate of inflation should be considered "easy money."

This underlying idea is a fallacy. Price level unpredictability is one of the kinds of harm that inflation can do, but not the whole of it by any means. Yes, if every price and every wage reliably increases at, say, 2 percent a year every year: buyers, sellers, lenders, investors and so forth can all quickly become accustomed to this, draft contracts that presume it, etc. The predictability would be a positive thing, and the debasement of the currency would be merely a matter of form, not something that ought to bug anyone. That is what many economists (and Gravelle) seem to presume actually happens in real-world inflation when they write as if a “non-accelerating” rate is benign.

But in the real world, the average price levels measured by consumer prices indexes and so forth are just that, averages. If we know that the CPI has increased 2% over the last year we have no reason to believe that every good – even every good and service explicitly included in the CPI – even any respectably large number of those goods for that matter -- has increased by that benign-seeming amount. Nor do we know that there is some narrow range of possibility around 2% where most price changes comfortably reside. You can of course quickly get in over your head trying to wade a stream with an “average” depth of only half a foot.

A related point: new money infused into the economy doesn’t come into it all at once. It isn’t as if helicopters have dropped it evenly over the whole landscape, or as if we could all wake up one random morning with more money in our bank accounts than we had thought we had the day before.

No … money enters the economy because the Federal Reserve buys assets. If you’re one of the lucky few who get to sell assets to the Fed then, poof!, the new money suddenly appears in your bank account first. The new money in time radiates outward from the first recipients to those with whom they do business, and so forth, out to ‘the economy at large’ if we may. But the process is a sloppy one, and it does in the nature of things create winners and well as losers. It redistributes real wealth and creates perverse incentives, even if it is kept at a slow and non-accelerating rate over time.

A related fallacy is the notion that inflation is a good thing because a growing economy needs a growing money supply. Why? In a free market the prices will automatically adjust should the economy grow more rapidly than the money supply. Suppose the money supply is linked to gold, and privately held gold supplies are freely convertible into paper notes. If the supply of gold falls beneath demand, gold becomes more valuable. This means that gold in jewelry is converted into monetary use, and gold coins that had been hoarded, stashed away in a safe, are brought out and put back into circulation. Also, promising gold mining operations become more valuable and people line up to invest in mining technologies.

In the meantime, since gold is becoming more valuable, in such an economy, prices of all non-monetary goods are falling. We’ve just conjured up a deflationary scenario. A lot of energy has gone into persuading people that deflation is necessarily disastrous, but there is no evidence it needs to be.

My final thought in this connection is the eminently pragmatic one, that we shall all have to do a lot of new thinking, in matters economic and financial, in order to get ourselves out of the mess in which through the old thinking, still the mainstream thinking, we have gotten ourselves.

08 June 2012

In Defense of Gambling with Borrowed Chips, Part V

My book, Gambling with Borrowed Chips, calls for the abolition of legal tender laws.
For a sense of what that means, dear (American) reader, please take a dollar out of your wallet. Above and to the left of George Washington’s head, you’ll see in small print the words, “The Note is legal tender for all debts, public and private.”

Once upon a time, not too long ago, the words in that spot offered the prospect of redemption of the dollar bill in specie, gold or silver.
Between the one sort of engraved bill and the other, the notion of a “legal tender” stipulated by law has replaced the idea of redemption by a backed currency. The system of fiat money, then, is one in which legal tender laws require people to accept unbacked paper that they might not otherwise take, arbitrarily forcing a medium of exchange upon the populace. For those who like the particulars of codification: the “legal tender” status of these bits of paper is secured at 31 USC §5103.

Those of us who speak of repealing legal tender laws, are, then, in effect proposing a return to commodity backed money. We speak this way not for the delight of talking in codes, but simply as a way of focusing on the difficulty: not so much what the government isn’t doing, but what it is doing (installing its paper by fiat as the Ur-money).    
I don’t really feel like a “gold bug.” I do believe there are lots of ways of hardening a money supply, as I mentioned in yesterday’s entry. Still, for the remainder of our discussion (and we near its end), I will accept the shorthand account of what I am proposing here. I am advocating a gold standard as a geology-backed medium of exchange.

When Gravelle writes: “In fact, most economics textbooks, for good reason, devote no more than a page or two to explaining the gold standard and how the U.S. and other countries’ economies moved away from commodity money to fiat money….” she merely confirms my own pessimistic assessment of the textbook publishing industry.
She then adds her own definition of “fiat money” in a parenthetical comment. She calls it “money backed by the promises of the government.” Sorry but, no. This is not what it is! The promise of the government to do …? Fiat money is backed only by the demands of the government, as expressed 31 USC §5103. There is no “promise” involved. That word suggests the long-discontinued redemptions.
But then say: for purposes of discussion, let us make this about gold.

Gravelle writes: “Faille seems to believe that the gold standard was restored after World War II, but that standard only applied to international transactions and even then only in a limited fashion.”

She suggests here that I am confused about the nature of the Bretton Woods monetary system. In fact, I explain explicitly that “U.S. citizens were not allowed to convert their dollars into gold” during the Bretton Woods period. I also say, though, that through the Bretton Woods accords the U.S. “committed itself to tying the value of its dollar to the price of gold.” Both assertions are true. Yes, the tie in question was not what it had been before 1933, or before the creation of the Federal Reserve twenty years before that, but all that establishes is that there is more than one way to harden the money supply, even more than one way to alloy it with gold.   

Indeed, in December 2011 (too late, alas, for mention in Gambling with Borrowed Chips) the Bank of England issued a white paper, its “Financial Stability Paper No. 13,” that reviews the global financial crisis from a monetary perspective and that confirms many of my book’s points.

The authors of this paper – Oliver Bush, Katie Farrant, and Michelle Wright –list three objectives for an international monetary and financial system: internal balance, allocative efficiency, and financial stability. They conclude that the system now in place “has performed poorly against each of its three objectives, at least compared with the Bretton Woods System.”

The key fact about gold is that its supply is limited by the nature of the planet we’re on, and that adding new gold supplies to the world system will always require investment, risk, and expenditure. Such additions cannot be accomplished by fiat. This is why Robert Zoellick, former president of the World Bank, said recently, “The system should … consider employing gold as an international reference point of market expectations about inflation, deflation, and future currency values.”  Indeed it should.

The problem, finally, is that the "business cycle" is not really a circle. The turns don't leave us where they found us. The business cycle is in many respects a downward spiral. So long as we grease up the money making machinery each timne around to save us from each bust, we preserve old inefficiencies and create new ones. In the best of times they are hidden, in the worst of times they are obvious. We should take advantage of that obviousness to address them head on.

That is my point, and I am happy -- or at least content -- to have gone outside of the mainstream to make it.

There is just one final point I need to make, and this arises from Gravelle's casual observation in her review that the only worrisome symptom of "easy money" would be "accelerating inflation while at full employment." I passed that remark by rather lightly in an earlier entry in this series. Tomorrow I hope to come back to it. It gives us a bang-up close.

Pragmatism Refreshed

Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.