27 June 2010

Josiah Royce again

Another Josiah Royce quote worth blogging, from the same book that I cited last week. Here, he is talking about different forms of Realism -- by which he means, roughly, epistemological dualism -- the view that the known (especially when it is a material something in the "external world") is utterly independent of, but causes ideas in, the knower.

His broad point is that although Realism sounds like common sense, when pressed and when a persistent mind tries to expound it systematically, it ends up someplace offensive to the very common sense that gave it birth -- it ends up giving us Leibniz' monads, or the Parmenidean One, or something else outrageous.

One of his examples of Realism/duaism comes from the Indian/Hindu philosophic tradition, the Sankhya, who appear to have been philosophic foes of the early Buddhists. But their insistence that the material objects that we sense are utterly independent of our minds led to the view that minds are utterly independent of matter, even unaffected thereby.

This, then, leads to a problem. In Western philosophy, it is a famous post-Cartesian quandry. How do we perceive anything external unless, in the act of perceiving, we are affected by what we perceive? If we are affected, dualism can't be as sharp as Royce says the Sankhya would like to make it. And if we are not affected, what does it mean to perceive or to know at all?

Royce said that the Sankhyas contend that "the soul is not only separated by a chasm from matter; it is even really unaffected by matter," and they expressed this in a favorite simile of "the red Hibiscus flower [that] is reflected in a crystal that all the while remains inwardly unaltered by the presence of the flower. The result is a theory of a sort of psycho-physical parallelism, founded, to be sure, according to the Sankhya, upon an illusion." (p. 103).

All this comes as new to me.

26 June 2010

Victory for a Loophole

Capital Gains treatment for "carried interest" now seems likely to survive this session of Congress.

As regular readers of this blog know, I am against cap gains treatment in this area. It is a paradigm of a an inequitable tax loophole.

There is room for reasonable argument about what exactly ought to be done to close this loophole, but that it ought to be closed, nobody who has viewed the situation in a dispassionate way seems to doubt.

Yet year after year, Congress has proven incapable of acting.

As to this year specifically: under the bill approved by the House of Representatives on May 28, 2010, the American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213), 75 percent of carried interest will be taxed as ordinary income beginning in 2013. The remaining 25 percent will continue to be taxed as capital gains. During the transition period until 2013, under this bill, 50 percent will be taxed as capital gains, 50 percent as ordinary income.

That was a detail within a big bill with other motives. The overriding purpose of the bill was to extend unemployment benefits further. Republicans didn't like that and demanded budget neutrality -- i.e. assurances the bill would not contribute to the deficit. That set off the search for loopholes to close and, in fixing upon the cap gains treatment of carried interest, the legislative draftsmen found a good one.

On Tuesday, June 8, the Senate Finance Committee, chaired by Max Baucus (D-Mont.) amended the House bill in the form of a substitute. There were some important changes, including some in the provisions dealing with carried interest, but nothing a conference committee couldn't have patched up.

It now appears that there won't be a conference, because the bill can't get through the Senate. The Republicans (with just one Democratic ally, and one Independent ally) have successfully filibustered the unemployment extension there. The provisions closing the loophole weren't the reason for the filibuster, so far as I can tell, but they are casulaties nonetheless.

25 June 2010

Science and the Missing Energy

Does the first law of thermodynamics need revision? That was the question at the heart of a recent article in Scientific American.

I believe the author ends up answering "no," but it is an intriguingly tentative "no."

The first law is that "energy can be neither created nor destroyed." This law had to be modified back when scientists first realized that energy can be created with the loss of mass/matter (as at Hiroshima). But if we think of mass as stored energy, then the law holds.

Or does it? Here's the money quote from Tamara Davis' story. "Almost all of our information about outer space comes in the form of light, and one of light's key features is that it gets redshifted -- its electromagnetic waves get stretched -- as it travels from distant galaxies through our ever expanding universe....But the longer the wavelength, the lower the energy. Thus, inquisitive minds ask: When light is redshifted by the expansion of the universe, where does its energy go?" If the energy is simply lost, then the first law has been violated.

The author, Ms Davis, is a research fellow at the University of Queensland, in Australia, and an associate professor at the University of Copenhagen, in Denmark.

She seems to be saying that there are two ways to interpret the expansion and the resulting redshift, one involving the expansion of space itself, the other involving the movement of objects away from each other. In the later case, the redshift is a relatively straightforward matter of the workings of the Doppler effect, and doesn't imply any loss of energy. In the former case, if we think of space as an expanding balloon, it is more difficult to make the energy "accounting" work.

Indeed, Davis thinks it may be impossible to save the first law from that point of view, but she also seems to conclude that we simply shouldn't try. The loss of energy on the cosmic scale isn't so much a violation of the first law, in her view, as a category mistake.

24 June 2010

Human evolution

I saw a documentary recently about paleontological work on "Ardipithecus Ramidus,"
and a skeleton of a particular female of that species found on a hill called Aramis.

The documentary was not at all well constructed -- it repeated its points endlessly -- still, it did challenge two conceptions I have long held about human evolution.

First, I have long bought into the idea that humans walk upright because of the grasslands of Africa. Quadrupeds in anything like our size would often have their faces buried in the tall grasses, unable to get a clear view of potential predators, or potential prey. Bipedelism, in that environment, would seem a real plus in the Darwinian competition for survival.

That was my idea, and the idea of a lot of other people too, it seems. But this documentary indicated that we were all wrong. Ardi walked upright in a forest setting, where there aren't long convenient sightlines anyway so the advantages of bipedalism aren't at all as obvious.

Another challenge: I have long believed that the opposable thumb was crucial to the separation of hominids from other primates. Our thumb makes us tool-users, which in turn presumably spurred the expansion of the brain, the development of complicated social groups, and so forth. Right? Well, maybe in some later era the opposable thunb played the sort of important causative role that has been attributed to it. But bipedalism and other changes underway in Ardi's day would have preceded all that. Her thumb looks distinctly unimpressive.

20 June 2010

Josiah Royce

Two brief quotes from my reading in the early pages of THE WORLD AND THE INDIVIDUAL.

1. "You may in these region" [discussions of Being] "either think or not think the truth; but you cannot think the truth without loving it; and the dreariness which men often impute to Metaphysics, is merely the dreariness of not understanding the subject, -- a sort of dreariness for which indeed there is no help except learning to understand. In fact, no one can ever regret seeing ultimate truth. That we shall hereafter find to be, so to speak, one of the immediate implications of our very definition of Being. When people complain of philosophy as a dreary enterprise, they are then merely complaining of their own lack of philosophical insight." (pages 8-9).

2. "The difference between merely seeing your friend, or hearing his voice, and consciously or actively regarding him as your friend, and behaving toward him in a friendly way, is a difference obvious to consciousness, whatever your theory of the sources of mental activity. Now this difference between outer sense impressions, or images derived from such impressions, and active responses to sense impressions, or ideas founded upon such responses, is not merely a difference bvetween what is sometimes called the intellect, and what is called the will. For, as a fact, the intellectual life is as much bound up with our consciousness of our act as is the will." (p. 21).

The first of those points shows the difference between Royce and his mentor/friend, William James. James would have agreed, did agree, with those who thought that metaphysics -- as traditionally practiced and as practiced by Royce -- is a drary business, and he sought to build upon the human intuitions that deem it so.

The second of those points, though, shows the profound influence that the two men had upon one another, for here Royce is insisting on a characteristically Jamesian psychological observation.

19 June 2010

The Subjective Side of Integrity

A friend of mine recently quoted Ayn Rand (From "The Virtue of Selfishness") on her facebook page: "Integrity does not consist of loyalty to one’s subjective whims, but of loyalty to rational principles."

I would like to take up that thought here, because as is the case with much that Rand wrote, it is resonant, memorable, and misguided.

I will give my own reasons for holding that any sensible conception of integrity does contain a subjective component. It is a matter of loyalty to what one believes, even if one should be so unfortunate as to believe something non-rational, or "whimsical."

Let us make the traditional point involving a cliff. If I am walking along with a precipice to my left, it is of the greatest importance that I recognize that there is a precipice there. Should I by some odd "whim" decide that there is solid ground to my left, I might walk leftward, and so terminate my deluded existence.

But surely we don't need the word "integrity" to describe the virtue of knowing where the edge of the solid ground is and staying on it. There are plenty of other good English-language words for that, including "prudence"!

"Integrity" comes from the Latin for "whole" and its ethical use is closely related to that. If someone acts and speaks as a whole, he does not fragment himself into, say, the at-work character and the at-home character. Nor does he divide himself by the income he admits receiving and the cash payments he takes under the table.

To use integrity as an ethical term at all we must recognize that people often believe wrong things. They never believe that they believe wrong things. [Or do they? we are in the terrain of the paradox of the preface here. I'll send you elsewhere for more.]

But let us flip past the hypothetical preface. For most purposes, it is redundant to speak of "my belief that X is true." My belief that X simply is the belief that X is true, so the period to the sentence could come after the X. Now: why is it good for someone who has a false belief to act and spoeak with loyalty toward that belief?

It is good for that person, because he opens himself up to correction. If someone who thinks that two plus two equals five stays silent about it due, say, to peer group pressure, if he never speaks up, he is less likely to receive corrective explanations of basic arithmetic. He will divide himself into the conformist fellow who claims to believe that 2 + 2 = 4, and the secret rebel hiding a heresy. This is by definition a loss of integrity. The person with integrity who is open to such corrections will benefit by them, will learn that 2 + 2 = 4. Then, once the error is removed and replaced by rational awareness that twice two is four, he can happily display his integrity about that! It will be the same virtue, for the erroneous as for the accurate thinkers, with different manifestations.

But what (you might ask) should we think about people who hold some objectively absurd belief and are closed-minded about it, who will not benefit from correction? Should we praise their integrity, too?

Even here, I would say, integrity has some benefits, and deserves to be called by that name. After all, someone who really believes there is no cliff to his left, and acts with integrity in walking that way, will remove himself from the gene pool. The rest of us will benefit.

18 June 2010

Book Note: Henry Clay

David S. and Jeanne T. Heidler have written a new biography of Henry Clay, the man who coined the phrase "I had rather be right than President."

David Heidler is a scholar who has been associated with Colorado State University since 1994. Here is his resume. Here is hers. Jeanne Heidler teaches at the Air Force Academy.

And here is a review of the new book, by a blogger who cautions that at 624 pages, "it's a long haul." But Larry Co, writing for Florida Weekly, is considerably more enthusiastic.

The authors have a joint facebook page here.

17 June 2010

Worcester, Mass.

I had a very enjoyable Bloomsday, and I'd like to thank the Worcester County Poetry Association for arranging the events that made yesterday memorable. Thank you.

For those not in the know: June 16, 1904 is the day immortalized by James Joyce in the novel Ulysses, perhaps the greatest novel of the stream-of-consciousness school.

Joyce appears to have chosen that particular date because it was then that he met Nora Barnacle, who became THE woman in his life, and in 1934 his wife. Allegedly Joyce's father, upon learning of Nora's surname, said, "she'll stick with him," a wonderful Joycean pun.

Since my own stream of consciousness decides upon its own twists and turns, let me close this brief entry out by noting that in 2004, Sotheby's auctioned off a letter JJ wrote to Nora in 1909, a sexually explicit letter, that sold for 240,800 pounds, pulverizing the estimated value which had been just 60,000.

I think Joyce would have been happy about that.

13 June 2010

Aiding and Abetting

I've recently received the latest copy of the Western New England Law Review, a publication that I helped to edit back in the distant days of the early Reagan years.

The latest issue contains some fine material, including a note addressing the question "what is the required mens rea for an aider and abettor of a felon in possession of a firearm?"

For the non-lawyers and non-Latin speakers among my readers, "mens rea" means guilty mind. A criminal offense at common law must have both a physical and a mental component -- the mental component is the mens rea. This can, but need not be, "intent." (It might be recklessness.)

As to aiding and abetting, the US code says, "Whoever commits an offense against the United States or aids, abets, counsels, commands, induces, or procures in commission, is punishable as a principal."

Certain crimes are defined in part by whether the person committing them is a felon. For example, a convicted felon is forever after prohibited from lawfully owning a firearm. Hence the question above. What if you are the one who gave a firearm to a convicted felon? What if you shipped it to him across state lines?

He clearly is guilty of a crime by virtue of possessing it. Have you aided and abetted that crime? What if you had no knowledge of his being a felon? Is there a "mens rea" requirement that the prosecutors seeking your conviction must meet and, if so, what is it?

I admit I had never given any thought to this query. It turns (WNEC School of Law student James O'Connor tells us) that there is a split among the federal courts of appeal on this point. For example, United States v. Canon, 993 F.2d 1439 (9th Cir. 1993) takes one view and United States v. Xavier, 2 F.3d 1281 (3d Cir. 1993) takes another.

The first circuit court of appeals -- where Springfield, Mass., and thus the WNEC School of Law is located -- has so far not addressed the matter.

12 June 2010

James' thought for today

"Ordinary epistemology contents itself with the vague statement that the ideas must 'correspond' or 'agree' [with reality]; the pragmatist insists on being more concrete, and asks what such 'agreement' may mean in detail. He finds first that the ideas must point to or lead towards that reality and no other, and then that the pointings and leadings must yield satisfaction as their result. So far the pragmatist is hardly less abstract than the ordinary slouchy epistemologist; but as he defines himself farther, he grows more concrete."

"The Pragmatist Account of Truth and its Misunderstanders," PHILOSOPHICAL REVIEW (Jan. 1908).

11 June 2010

Christine Richard's book

I've recently read CONFIDENCE GAME, the Richard book on Bill Ackman's daring, risky, but ultimately successful bet against the bond insurers' business model. One of the neat revelations in this book is telegraphed in the title of chapter 14, "When Crack Houses Become Collateral."

In 1998, it seems, MBIA, the bond insurance company at the center of Richard's story, bought out Capital Asset Research Management, a company that was in the business of buying "past-due tax bills from cities and counties at a discount and then [trying] to collect on the debts. These tax certificates also gave holders the right to collect interest and penalties and, if the debt went unpaid, to foreclose on the property."

Unfortunately, it soon became clear that Capital Asset had overpaid for the tax certificates. To pretty up the books, rather than writing these assets down and taking a loss, MBIA sold the tax liens to a special purpose vehicle (SPV)'s. The SPV paid MBIA an inflated price for them, having raised that money through the sale of bonds. What was the name of this vehicle? Caulis Negris: somebody's inaccurate and jokey attempt to render the phrase "black hole" into Latin.

Caulis Negris was a shell, it was still MBIA that was on the hook for payments to the bondholders. It turned out that most of the properties on which MBIA, through Black Hole, held tax liens were in the City of Pittsburgh. Richard got a list of all the properties in that city with Caulis Negris liens and looked them over, with the aid of a cabbie. "Almost invariably," she says, "we stopped at the worst property on the block, though sometimes that was a hard call." Some of them had clearly become magnets for drug abusers -- hence the title.

MBIA wanted to write down the value of its Black Hole slowly, so as to avoid any investor apprehension such as might have been instigated by a big single-shot write down. But that was no mere book-keeper's quirk. Its unwillingness to recognize losses "could hold up the redevelopment of entire neighborhoods." Not just one or two isolated blocks either -- Black Hole owned liens on 11,000 Pittsburgh properties.

Her story on this subject ran through Bloomberg News in November 2006. I'll give you a link to it.

10 June 2010

A Revival of "Evita"

This might be worth seeing.

Alas, these things are never known until they happen -- until opening night! And in this case, Opening Night on Broadway for the show "Evita," which was such a hit in London from the late 1970s through the first half of the 1980s, will take place in 2012 at the earliest.

Tim Rice lent his words to Andrew Lloyd Webber's music. In London, Elaine Paige was the title character, Joss Ackland was Juan Peron, and David Essex was Che.

"Che" was originally conceived as a generic Greek chorus type figure. Though the choice of name was not accidental, he was not supposewd to be too tightly linked to the historical Che Guevara. Nonetheless, that is how Essex chose to play him.

Fans of Second City Television will remember this parody.

God bless Andrea Martin.

06 June 2010

Chesterton on the egg (which is an egg).

More on Chesterton. One passage often cited by his admirers comes from his book on Thomas Aquinas:

"Against all this the philosophy of St. Thomas stands founded on the universal common conviction that eggs are eggs. The Hegelian may say that an egg is really a hen, because it is a part of an endless process of Becoming; the Berkeleian may hold that poached eggs only exist as a dream exists; since it is quite as easy to call the dream the cause of the eggs as the eggs the cause of the dream; the Pragmatist may believe that we get the best out of scrambled eggs by forgetting that they ever were eggs, and only remembering the scramble. But no pupil of St. Thomas needs to addle his brains in order adequately to addle his eggs; to put his head at any peculiar angle in looking at eggs, or squinting at eggs, or winking the other
eye in order to see a new simplification of eggs. The Thomist stands in the broad daylight of the brotherhood of men, in their common consciousness that eggs are not hens or dreams or mere practical assumptions; but things attested by the Authority of the Senses, which is from God."

As usual, when someone intones a tautology, some form of "A is A," as if it is of tremendous significance, he or she is trying to sneak in a presumption. Here, Chesterton is being less sneaky than are some who use this ploy. For he's been quite open with us, earlier, about the presumption. By "egg" he means a common-sense egg, the egg that an untutored individual who isn't too much concerned about the "particular go of it" will understand to be an egg. When Chesterton says "eggs are eggs" he means that we can't or shouldn't try to get further in than that in our understanding of them. Addling one's brains in an effort to get behind the obviousness of egghood is a bad thing. That's the message here.

IMHO, that message is exactly wrong, and wisdom consists precisely of trying to go further than "an egg is an egg." To consider any more sustained inquiry a matter of "addling one's brains" is to ask that one's brains be perpetually chained by this "authority of the sense." Although we do need the sense to get started, we also need as humans to remember that the reports of the senses are seldom the end.

05 June 2010

Chesterton on the landlady and the lodger

Ciceronianus posted some fascinating thoughts on Wednesday regarding G.K. Chesterton, an author he finds clever, witty, and unprofound.

Chesterton first got onto my personal radar because William James quotes him right at the start of Pragmatism. Chesterton wrote thus: "There are some people -- and I am one of them -- who think that the most practical and important thing about a man is still his view of the universe. We think that for a landlady considering a lodger, it is important to know his income, but still more important to know his philosophy. We think that for a general about to fight an enemy, it is important to know the enemy's numbers, but still more important to know the enemy's philosophy. We think the question is not whether the theory of the cosmos affects matters, but whether in the long run anything else affects them."

James professes himself on Chesterton's side in this belief, yet he immediately gives it a more Jamesian twist. Chesterton had spoken of a hypothetical landlady and her equally hypothetical lodger. James, giving a lecture, dispensed with hypothetical people and spoke of "you," the people in the audience before him.

"I know that you, ladies and gentlemen, have a philosophy, each and all of you, and that the most interesting and important thing about you is the way in which it determines the perspective in your several worlds."

That is a new twist not only because of the direct address to "you," but because of that reference to the "several worlds" of his audience, which seems to me a very un-Chestertonian turn of phrase. Chesterton was of the view that there is only one Orthodoxy and multiple heresies -- that confidence is itself a source of his charm. There is only one Objective world and several ways of getting it wrong. James was of a very different view. The landlady and her lodger may be residents, in an important sense, of different worlds, deternmined by their different perspectives, (although, yes, those worlds obviously overlap and produce disputes over rent and leaky pipes.)

At any rate, I recommend Ciceronianus on this, as on much else.

04 June 2010

Boyd's New Blog

Roddy Boyd has begun a new blog The Financial Investigator. I expect he will have much of interest to say there.

For the uninitiated, Boyd has written on business/financial issues for both the NEW YORK POST and FORTUNE.

On p. 169 of Sauer's recent book on short selling and the SEC, Boyd's name is misprinted. He becomes "Roddy Body." Misprint notwithstanding, I suggest people read the passage. Boyd made the phone call no one else would make, and added a piece to the puzzle of ongoing debate about short-and-distort tactics, etc.

Boyd's newest venture has already attracted a fair amount of attention. For example, here is the write up in Big Money.

Here it is in Business Insider.

And here is the 'talking' from Talking Biz News.

His first entry concerns SpongeTech Delivery Systems, who deserve to be remembered for a sexy-girl- washing-car video. God knows the world needs more of those. But, alas, they will probably be remembered for false SEC filings, fraudulent press releases, and such.

Good job, Mr. Boyd, and keep these stories coming.

03 June 2010

Sixty-six years ago today

On June 3, 1944, a full 66 years ago, Adolf Hitler ordered German forces to withdraw to positions north of Rome, Italy. Allied entry into the Eternal City would not be contested.

The Italians had surrendered the preceding September, so at this point the German forces were all that slowed the Allied movement up the boot. They had proven very good at slowing it, and that would remain the case, German troops still occupied some of northern Italy at the time of the Third Reich's surrender in May '45.

Anyway, back to June '44. As the German Tenth Army moved north to its new defensive positions, British and US forces -- and a variety of units under U.S. command -- engaged in an unseemy dispute over who would have the honor of entering Rome first.

According to historian Todd DePastino, it was actually a unit of the Free French who won the race, who "scampered first into the deserted city center," on June 4, but it had "failed to bring along a film crew to record the event."

The following day, General Mark Clark of the Fifth Army liberated the city in proper fashion, parading in triumph through the city that had invented the triumphal parade.

But as DePastino also notes, the news from beaches in France soon cut short any opportunity he might have had to bask in the glow of the world press. The long-awaited cross-channel invasion began on the morning of the 6th.

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.