Smart people saying smart things

Smart people saying smart things May 14, 2013

Warren Buffett on Gold

Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.

What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth — for a while.

Adam Smith, in The Wealth of Nations

Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconvenience to the society? The answer seems at first sight abundantly plain. Servants, laborers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.

The liberal reward of labor, as it encourages the propagation, so it increases the industry of the common people. The wages of labor are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives. A plentiful subsistence increases the bodily strength of the laborer, and the comfortable hope of bettering his condition, and of ending his days perhaps in ease and plenty, animates him to exert that strength to the utmost. Where wages are high, accordingly, we shall always find the workmen more active, diligent, and expeditious than where they are low.

Alisa Harris: “No, Kathryn Joyce Is Not Attacking Good Christian Parents”

Nowhere does Joyce claim that the extreme cases, particularly those involving child abuse, are representative of evangelical adoptions. She is consistently at pains, in both the book and her interviews, to stress that the people she’s writing about are almost all good people with admirable intentions. She does point to a well-documented trend, that spans from fundamentalist evangelical groups all the way to major organizations like Focus on the Family and the Southern Baptist Convention, in evangelicals advocating international adoption as a kind of acceptable social charity work that doesn’t compromise fundamentalist positions on sexual ethics. It changes nothing that Merritt has never heard of some of the adoption organizations involved; anyone who has actually been through the process certainly has. In both her book and her Mother Jones story, Joyce charts the history of this rising phenomenon without overstating its size or influence.

As is often the case when mainstream reporters present portraits of evangelical behavior that cut through their own self-justifications, Merritt tries to sidetrack the story with detailed assessments of the exact size and influence of certain books and organizations Joyce mentions and claim she has attributed some sort of outsize influence to them. The goal seem so be help evangelicals circle the wagons, not to consider that some in their tent — almost all very good people — are participating in what has become a global network of child trafficking to serve the desires of Western parents.

The Rev. Phil Jackson: “God is pissed off and so am I”

There is a passage in Luke 7:11-16 in which Jesus stops a funeral and heals a child from death, brings him back to life, and gives him back to his mother. How I dream of that moment. But, I also believe I can work to stop the funerals in the first place and bring our young men and women back to Christ, back to their families, and back to their communities. This means working for personal transformation of young people’s lives. But it also means looking at the structures we live in and asking how they can change to make our streets a safer place to grow up.

Steve Benen: “Senate easily approves fix for flight delays”

When the sequester started kicking children out of pre-K, Congress did nothing. When this stupid policy denied low-income seniors the benefits of Meals on Wheels, Congress barely noticed. When sequestration cuts put new burdens on cancer patients and cut housing aid to struggling families, most of Congress shrugged its shoulders.

But when business travelers ran into flight delays on Monday, a unanimous Senate approved a fix without breaking a sweat on Thursday.


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  • “The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful).”

    from that article

    He’s correct that millions of acres of farmland will yield much more interesting results and will in fact GROW into something larger. That is true, gold will not expand into something else. It’s a different sort of investment and one that would make little sense in Berkshire Hathaways portfolio of preferred stock of A list companies.

    The rush to buy gold generally returns to Nixons decision to close the gold window. Once gold was no longer nailed to 35 dollars an ounce it was inevitable that it would move and move up.

  • Magic_Cracker

    Au contraire, mon communiste! Ayn Rand proved that gold is the only thing that can objectively represent value because shiny!

  • JustoneK

    srsly? Rand liked the gold standard thing?

  • NarcissusThespiae

    “”The public’s going to be furious when they find out that this could have been
    prevented,” Republican Senator Dan Coats complained to the [Wall Street Journal]. Exactly. And it was only then that they would have had the moral standing to judge the rest of the sequester.”


    “So why did Democrats go along? Because they were just looking to solve this problem quickly, and this was the path of least resistance.”

    This is the system. The aggregate sum of all our choices. Without a change to the system. Expect more of the same.

  • Magic_Cracker
  • Carstonio

    “the troubling theology that God has ordained another family to suffer the loss of a child so that you can adopt one” – I wouldn’t have guessed that such a belief was common. I know someone who was pressured by her family to give up her baby for adoption, and many years later, she still believes that the loss was punishment from her god for the sin of getting pregnant while unmarried. But I had thought that beliefs like hers were relatively rare.

  • Monala

    Adam Smith is such a contrast to many of today’s right-wing. Imagine arguing that well-being, rather than deprivation, is the encouragement that the poor and working class need to be productive.

  • flat

    I do know that a pile of gold is just a pile of yellow colored metal, and I agree with Buffet’s opinion of the value of it.

    So I wouldn’t say that it would safeguard my future against everything.
    But I will admit that having a huge pile of gold hidden somewhere might be useful to me some day as long as I keep it as one of my back-up plans for later if something unexpected happens.

    (I also make sure I have other options than only a huge pile of gold)

  • Baby_Raptor

    Mr. Jackson is worried about gun violence in his neighborhood…So he wants to convert people to Jesus. A God that, no offense meant to all here who worship him, takes a “sit back and do nothing” approach to actually helping his beloved creation. No. No, no no. That’s not going to help at all.

    Fix the problems the kids are facing. Fix education, make sure the families have enough money to live on, sort out the crime issues, make sure they all have health insurance, give the younger ones reliable child care and the older ones jobs…

    Create a stable environment for them. Give them a hope for a decent future. Once they actually have their feet on the ground, and have some security…THEN worry about racking up soul points!

  • Carstonio

    How silly of Smith to imagine that economies exist to benefit people and not the other way around. Deprivation as encouragement is the mentality of oligarchy.

  • Fusina

    Gold. Oooh, shiny. Like paper money though, you can’t eat it, you can’t, except in some circumstances, wear it (as clothing, not jewelry. Cloth of gold anyone? Stuff is bloody heavy and not terribly comfy). Except for jewelry and electronics, oh, okay, and some really pretty embroidery threads, not terribly useful. And what is the deal with putting gold flakes in otherwise meh liquor and on brownies?

    I will admit that I do have some real gold wrapped thread and sequins, but quite frankly, the gold colored mylar sequins look just as pretty and are much less expensive to stitch with. And they make fake gold wrapped thread that is likewise. It is like the lab created gemstones, or even cut glass beads. I am just as happy with “fake” bling as with the real thing. And, I can afford to really glitter stuff up with the fakes, for a lot less.

    Sometimes I think that the desire for the hard to get and rare can be a very bad thing. And, I’m not sorry about this opinion, but I like to read the fashion pages to see just how stupid the designers actually think rich people are.

  • Magic_Cracker

    Unlike with paper money, you can use gold to disable a Cyberman.

  • general_apathy

    Hm, I think that explains why the Wikipedia article for “Objectivity” has a little note saying “not to be confused with Objectivism“.

  • Not any more. They upgraded themselves to have a defense against that last Saturday.

  • Sixwing

    If you can’t disable a Cyberman with paper money, maybe you just need a different way to use it. Paper’s awful on precise joints and delicate surfaces.

  • Magic_Cracker

    Sure, those particular Cybermen in that particular time and place, but don’t forget: timeywhimey.

  • Magic_Cracker

    The entry on Objectivist poets has a similar note.

  • Magic_Cracker

    What Adam Smith clearly didn’t understand is that only the already-rich are motivated by reward (even when they fail), and the currently-poor can only be motivated by privation.

  • Reminds me of someone I know. Her son died inexplicably (SIDS) and she now rationalizes it as “God took my son so that I could have a daughter instead.”

    She keeps a family photo album with a blank space for every photo she would have taken of him if he were at the chronologically-categorized events. That… does not speak to me of having accepted the theological explanation for SIDS.

  • I think his motivation is more like “Real True Christians never do evil, so if everyone were a Real True Christian, there would be no evil!”

    Makes me wonder what he’s going to do with that pile of discarded Scotsmen.

  • JustoneK

    convert them to merican christianity.

  • Christy

    Actually, if you read his whole article, his point is that he wants
    better gun control laws, and he makes some specific suggestions for what he would like to see happen – all of which I agree with. (and yes, he
    also wants to convert people to Jesus.) I used to live in Phil Jackson’s neighborhood, and I used to know the guy (although not terribly well), and while he is most certainly into Jesus, he is also into working on all of the other issues you name.

    While a number of black churches have unfortunately abandoned working
    for tangible social change for a “Love God and He’ll give you lots of
    money” approach, there is still a deep social justice tradition in black churches and many of them are doing excellent work in their communities, working for both systemic and local change. Anyone who is really interested in tackling the problems that black and Latino youth face in low-income urban areas would be wise to have churches be a part of the equation. They can be a powerful force in community organizing – but they’re not going to tack on the faith stuff later. Activism and faith is a package deal.

  • guest

    Smith has got an undeserved bad rap as the philosopher of the neoliberal Right. Here are a few more quotes from Wealth of Nations:

    ‘those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as or the most despotical.’

    ‘Our merchants…complain of the extravagant gain of other people; but they say nothing of their own.’

    ‘In consequence of the representations of Columbus, the council of Castile determined to take possession of the countries of which the inhabitants were plainly incapable of defending themselves. The pious purpose of converting them to Christianity sanctified the injustice of the project.’

    ‘It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.’

    The actual 18th century root of the ‘greed is good, fuck the poor’ school of economic thought is Edmund Burke, whose Thoughts and Details on Scarcity could have been written by Gingrich or Romney.

  • mouseodoom

    “The wages of labor are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives.”

    This is an excellent example of elenchus that isn’t true. Human motivation is more complicated than “offer them more things and they will do more things”. Offering compensation for certain tasks – such as digging ditches quickly does work. The same compensation does not work with motivating programmers (or other producers of creative materials). Offer too little money and they won’t want to produce, offer too much and their products will be sparse and of a poor quality.

    Creatives need autonomy, mastery and purpose in order to be motivated. Too little money will demotivate them, but so will too much.

  • P J Evans

    Wages don’t have to be all money. Vacation is compensation, too.

  • JustoneK

    so the next cybermen will get rid of the handlehead?

  • Monala

    “industry… improves in proportion to the encouragement it receives.” This is a true statement. Compensation, however, is only one form of encouragement for industry – you mention others, such as autonomy, mastery and purpose.

    However, without compensation, most people won’t be very productive simply because they can’t afford to live. This goes back to Fred’s recent post noting that money isn’t sufficient for happiness, but it is necessary to prevent many significant forms of unhappiness.

  • Jeff

    “Nowhere does Joyce claim that the extreme cases, particularly those involving child abuse, are representative of evangelical adoptions.”
    Of course she does; Joyce chose the conduct of an adoptive family that behaved egregiously as the example par excellence of evangelical adoptions for her Mother Jones article. She wouldn’t have done that if she was genuinely concerned to provide a balanced, careful view.
    Jacobs, in her article, at least, is conflating several issues: bad behavior on the part of adoptive parents, bad behavior on the part of adoption agencies, and bad behavior on the part of local organizations and governments in the countries in which adoptions are taking place. These three issues are quite separate and separable, and need to be treated as such. And more importantly, the question needs to be asked as to how /pervasive/ such bad behavior is at each level in the system. Harris appears not to know, which, to me, makes her article irresponsible. You must not know either, if you’ve linked to her article, in which case you’re not really helping get to the bottom of these troubling questions.

  • hidden_urchin

    Have you seen this video?

    It is entirely worth the ten minutes and, IMHO, should be required viewing for anyone who supervises other people in the workplace.

  • David S.

    So any story that studies the bad cases is irresponsible? I haven’t seen any sources that go on about the good contributions of Chechens to our society recently.

  • Jeff

    No, David, and that’s clearly not what I said. But look at the title of Joyce’s book and some of her articles. The Mother Jones article in question is entitled “Orphan Fever: The Evangelical Movement’s Adoption Obsession”. (Yes, I know she may not have chosen the title, but many of her articles, and her book itself, have titles like that). She’s implying that the bad behavior she documents is /representative/.

  • Carstonio

    That’s exactly the wagon-circling that Harris is criticizing. Whatever the merits or flaws of Joyce’s reporting, it shouldn’t be misinterpreted as an attack on evangelicalism.

  • Carstonio

    That’s exactly the wagon-circling that Harris is criticizing. Whatever the merits or flaws of Joyce’s reporting, it shouldn’t be misinterpreted as an attack on evangelicalism.

  • Jeff

    You’re wrong. I want to see bad behavior come to light as much as anyone else. The question is whether these isolated incidents that Joyce documents add up to, as Harris says, “a global network of child trafficking to serve the desires of Western parents”, or are they isolated instances of bad behavior? (And the reason the question matters is because the answer influences how we should respond).
    Harris, and Joyce, appear to be insinuating that it’s more like the former than the latter, and that /is/ an attack on evangelicism (or at least, evangelical international adoption). If there is indeed a larger pattern, then this attack is justified; if not, then it’s scurrilous. Again, my impression is that Ms. Harris doesn’t know either way, and that Fred is probably just linking to the story because the possibility of evangelicals being involved in child trafficking is simply too delicious to ignore.

  • EllieMurasaki

    You…do realize that Fred is an evangelical.

  • mouseodoom

    I agree that minimum remuneration is desirable to encourage “industry”. I don’t like that word. The video linked by Hidden_urchin shows the nuance here.

    For some tasks fiduciary remuneration has a direct relationship to the work produced. Most of these tasks are of the physical form: dig a hole, build a house, sink X balls in baskets for a year.

    For other tasks, the relationship between compensation and production is not as clear and is not a direct one. In effect, the relationship becomes an inverse one for a large enough reward. These tasks tend to be of a certain form: creative tasks, problem solving tasks, etc.

    Some research has shown that in order to maximize production you must pay your problem solver “enough” money (that varies depending on circumstances) but not so much that they focus on the money instead of the product. After that, you have to supply autonomy, mastery and purpose.

  • Jeff

    Yes, Ellie.

  • Carstonio

    Delicious? Fred is an evangelical himself, so it’s very unlikely he sees Harris as attacking evangelicalism.

  • MaryKaye

    It really worries and disturbs me that so much of our economy is based on empty air: on doing things that do not produce anything, whether material or immaterial, but simply move money around. There was a story on the airport monitors (I don’t know the source–CNN, maybe?) about mechanized stock market trading that can take advantage of fluctuations in prices lasting for, literally, a couple of seconds. Catch those fluctuations right, you make money. Huge amounts of hardware and software are dedicated to this. But it produces nothing.

    Contrast that with the cropland Buffett wrote about. Farmers don’t make so much money (though Monsanto does, somehow). But they are making something and it’s genuinely useful. I’m not trying to praise tangibles here, either–the people who wrote _Halo_ also made something genuinely useful, in that it has made a lot of players happy.

    I feel that at some point we need to rearrange society to kill incentives for non-productive work. But I don’t know where you’d begin. The stock market started, as best as I understand it, as a means to raise capital for businesses. How could it have been prevented from becoming, as it increasingly is, a pure money-moving exercise?

  • EllieMurasaki

    I’m not sure how well this would work, but:

    In any transaction involving ABC Company’s stock, ABC Company must be involved. If one is buying ABC stock, it’s from ABC; if one is selling ABC stock, it’s to ABC. The only way to get ABC stock from Alex to Chris is if Alex dies owning ABC stock and Chris is the heir.

  • Monala

    I sympathize with what you’re saying somewhat. As an African-American, I am sometimes disturbed by the prevalence of negative stories about dysfunction in the Black community that are so common in our media – it’s to the extent that many people don’t realize that a sizable majority of African-Americans are not poor, not on welfare, not on drugs, not in and out of jail. And when I see yet another of such stories, I feel like shouting, “But what about all the good things going on in our community?”

    However, Ms. Joyce is addressing a problem, that of abuse and corruption in international adoptions, a lot of it fed by the pressures to adopt that evangelical Christians are putting on the system. This isn’t a story that has gotten a lot of play before now, hence the strong buzz the story is generating. To complain about a legitimate story getting attention, rather than seeing it as a call to action to reform a situation so that the good aspects of adoption can remain, is counterproductive. A comparable situation would be complaints by African-Americans about the stories that exposed the spread of HIV/AIDs in straight black women back in the ’90s, rather than responding to those stories as a call to action.

  • Cathy W

    Those fluctuations you talk about result in institutions buying and holding large numbers of shares of stock for fractions of a second before selling them again. It’s been suggested that a financial transaction tax of 0.1% would make that behavior unprofitable without the average investor even noticing it.

  • Monala

    Wouldn’t that eliminate mutual funds, which most people’s 401ks are, and therefore prevent the average person from being able to invest?

  • EllieMurasaki

    You assume the average person cannot buy individual shares from individual companies. I suspect this of being a false assumption.

    Though since 401(k)s are basically a means of moving money from the middle-class and fortunate poor to the wealthy, making them vanish doesn’t sound, on first hearing, like a bad idea.

  • Considering what we saw one Cyberman do in Nightmare in Silver, those handles could be useful.

  • Monala

    The idea behind mutual funds is keeping a balance of different types of investments together so that the overall fund grows, even if an individual stock drops. Most people don’t have the time or inclination to research all the various stocks and bonds to develop a similar portfolio (it’s not that most people cannot, but most people are unlikely to do so because of the time and effort it takes).

    Of course, that doesn’t mean that the people who are doing so as a career are doing so ethically. But that’s a reason why socially responsible mutual funds exist.

  • EllieMurasaki

    Okay, fair.

    So why would requiring the company whose stock it is to be party to all stock transactions do away with mutual funds? I may just not understand mutual funds very well, but if the fund owns the stock, why would it be unable to buy from and sell to the company whose stock it is?

  • Monala

    I’m curious about the research. Computer programming certainly isn’t a poorly-paid profession, and I imagine that other incentives contribute to increased productivity in all sorts of professions. Retail workers may be more productive when they are given more responsibility and they have considerate bosses, for example. I certainly don’t think compensation is the be all and end all of productivity, no matter what the job.

    But I’m skeptical that paying “too much” reduces productivity, unless other forms of incentives are non-existent. Think about creative people who sometimes become hugely successful in our society – writers, filmmakers, and musicians, for example. Does becoming rich mean they automatically become less productive? Or that their work automatically declines in quality?

  • But you can use paper gold.

  • It can be a global network without being an attack on evangelicals. Al Qaeda is a global terrorist network. Reporting on it is not necessarily an attack on Islam (or even fundamentalist Islam).