On Usury

Charging interest is essential to guiding the investment process, which cannot be sustained by charity even it were forthcoming due to the economic calculation problem. (In other words, interest rates are required to direct investments to their most productive use.) Interest-driven investment is essential to economic growth, and therefore to the very existence of industrial civilization. If charging interest were outlawed, industrial societies would quickly collapse due to the inability to efficiently allocate savings.

Loan-sharking (charging high interest rates backed up by the threat of violence) reflects the fact that the loans are being given to creditors with a high risk of default. The need for violence is due to the failure of governments to see this fact, or to adequately enforce the loan contracts (such as with overly lax bankruptcy laws), rather than any immorality inherent in moneylenders. There is no such thing as a single “just” interest rate because interest rates in a free market move towards an equilibrium determined by the time-preferences of individual debtors and lenders.

See Also

On Environmental Pollution

Pollution is a byproduct of production, which is a byproduct of civilization. Life without civilization would to the death of the vast majority people on earth, and life without production means certain death for all men. The proper balance between death from lack of production and death from excess pollution should be determined by an objective judicial process which conclusively proves cause and effect.

If a court can make a definitive causal connection between an injured party and a party responsible for a pollutant, it should demand compensation of harms. If it cannot find a responsible party guilty, but punishes an innocent party, it punishes man for his nature as a productive, industrial being and thus makes human life impossible.

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Socialists, Capitalists and Moderates on the Facts

(Reposted from my Facebook.)

Fact: There are poor people.

Socialist: Give me all your money, I will take care of them. Or else.

Capitalist: I can make lots of money from them because they’ll work for less.

Moderate: Give me half your money, so I can pay them not to work, then hire anyone who doesn’t want your money for free. If you make a profit, I’ll take it to pay more poor people to not work.

Fact: People lie.

Socialist: The government ought to teach people how to think and decide who is allowed to say what because people can’t tell lies from truth.

Capitalist: Honesty is just good business. Suing frauds for everything they’ve got is also good business.

Moderate: Say whatever you want, as long as no one is offended. But just in case, a “truth board” will censor anything anyone might find objectionable.

Fact: Some people are more successful than others.

Socialist: Since men are all equal, differences must be due to education and inheritance. We must seize inheritance and other gifts, and replace education with standard government schools. If anyone is still more successful than anyone else in school or in their career, they must have cheated, so we must punish them until they are equal.

Capitalist: Let’s find out what makes people successful so we can make a fortune doing or selling it.

Moderate: It’s OK to be successful as long as you don’t make anyone jealous. You must make those who envy you feel better about their failures by sharing your success with them. Or else.

Fact: Some people don’t like each other.

Socialist: Since men are equal, they must all love each other equally. We must take away anything that make them different or special away from them so that they cannot tell any group apart.

Capitalist: More customers is always good for business. If someone doesn’t want to work with someone for irrational reasons, I will happily take their customers and employees.

Moderate: People ought to learn to get along. Therefore, I will force people who hate each other to live and work together so they can learn to appreciate their differences.

The case for evidence-based medicine

Few people would openly admit that they prefer irrational treatments and doctors. But most people do in fact advocate irrational health practices – using pseudonyms for “irrational” as “holistic,” “alternative,” “homeopathic” and the deadly “natural.”

Medicine requires reason

The human body operates according to certain causal principles. If we wish to make a change in our health, we must understand some of those causal principles and act according to our understanding. To act without a rational basis is to disconnect our goals from their achievement. Irrationality does not guarantee failure — it just means that success, to the extent that it happens, will be due to other factors that our goals.

The study of human health is especially difficult

In the field of health, especially rigorous rationality is necessary for at least five reasons:

  1. The human body will solve, or at least try to solve most problems on its own. This makes establishing causality due external factors quite difficult and introduces biases such as the placebo effect and the regression fallacy.
  2. The body is very complex! Because it evolved over billions of years, the causal relationships in the body are extremely complex and interdependent.
  3. For example, even if we know that the body has too little of a certain substance, taking that substance may: a: not do anything b: cause the body to produce even less of the substance or c: cause an unpredictable side effect. On the other hand, if the body has too much of something, then the solution may be to a: consume less of that substance b: consume more of that substance or c: the consumption has no relationship at all to the level of that substance.
  4. It can be difficult to measure the extent to which medical problems are solved. While some things can be measured, many things, such as pain levels are very difficult to quantify.
  5. It is difficult to isolate causal factors in human beings since changes in health take time to develop and we can’t control every factor during an experiment or dissect human subjects when it is over.
  6. Humans tend to be irrational when it comes to their own mortality! We fear death, leading us to irrational over or under spending on health as well as being especially vulnerable to all the logical fallacies.

In medicine, rationality requires quality science research

There is a name for the field that applies rigor to the discovery of facts about nature: science. Science has been so successful in improving the state of human knowledge that many irrational, anti-scientific quacks have begun to use the term “scientific” to describe anti-scientific practices and ideas. In response to this, the medical community has come up with a term which identifiers the distinguishing aspect of rationality: “evidence based medicine.” This phrase is a necessary redundancy that identifies the essential characteristic of science: that it is based on sensory evidence. The alternative to non-evidence based science is not science at all, but emotionalism – “I feel it is true, so it must be.”

In the last hundred years, we have discovered certain practices for ensuring the conclusions of our medical experiments are valid. We know experimentally that observing these practices leads to more accurate conclusions. Let me emphasize that: the truth of medical claims is strongly correlated with the degree to which experiments follow accepted scientific standards. There are a number of objective scales for measuring the quality of an experiment.

Five characteristics of quality medical studies

Here is the essence of quality medical studies:

  1. The experiment and its results are fully described in enough detail to reproduce and compare the results
  2. There is a randomized control group
  3. The selection of control subjects is double blind
  4. The methods of randomization and blinding are accurately described and appropriate
  5. There is a description of withdrawals and dropouts.

How to judge health claims

Unfortunately, it is difficult to design good experiments and more difficult still to reach firm conclusions from most experiments. In the legitimate (“evidence-based”) medical community, the degree to which practitioners adhere to the principles varies greatly – but they at least try. Fortunately, in the “quack community,” while there is sometimes the pretense of evidence, basic scientific principles are so grossly violated and ignored that is becomes easy to distinguish fraud from legitimate science.

Here is an important point: it is difficult to make firm conclusions in medicine. But when valid scientific principles are not followed, it is easy to conclude that no valid conclusion can be reached. In other words, you can’t always be sure what’s good for you, but you can be sure when someone is talking nonsense.

Another important point: When someone makes irrational health claims, it does not mean that those claims are false. It just means those claims were not derived by rational (scientific) principles, and so we cannot say anything about their truth – we can only ignore them as arbitrary. It is as if someone claimed an invisible, undetectable pink unicorn in the sky – that which cannot be proven or disproved can only be dismissed.

How can we apply these ideas? It so happens that most health claims in the non-scientific media and many health “practitioners” are unscientific. This does not mean that they are wrong, or that people don’t feel helped by them. It means that their claims have no connection to reality.

 

In some cases, the practices that quacks suggest are helpful — but not for the reasons they identify. More importantly, in all cases following rational, scientific principles leads increases the likely hood of successful outcomes over quackery (aka emotionalism).

To conclude, to judge whether a medical claim is legitimate or arbitrary nonsense, check whether:

  1. It is based on quality experiments
  2. It is consistent with medical consensus (of evidence-based medicine)
  3. The certainty of the claim is well-established (by numerous studies, systematic reviews, etc

 

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Thoughts upon the death of Steve Jobs

To put my view of Steve Jobs in Objectivist terms, I see him as a real-life Howard Roark. Even if he had never been successful, his strength of vision, his uncompromising principles, and his confidence in the power of his ideas make him a hero in my book. But of course it is precisely because of those principles that he became the most successful CEO ever. He is truly my personal hero and an inspiration for the life choices I have and will make.

I am writing these words on my first computer designed under Steve Job’s watch, and unfortunately, my last. Even though computers are my career and passion, I have never been attached to them as individual objects, only as an idea. I feel like using this computer for the last three years has been kind of like living in a building designed by Howard Roark, and knowing that I can never have another products created by him (even if Apple continues to be inspired by his vision), I feel far more reluctant to sell it when it is time for the inevitable upgrade.

Steve Jobs was an intensely personal man – his means of expressing his values was almost purely through the products of his work. Unlike most other tech companies, prototypes and discarded ideas rarely leaked out of his laboratories. He only announced new products when he was sure that they could be made. I think he wanted to be known and judged solely by the things he could mass produce, as the “Apple product” included everything for him – the supply chain, production process, company campus, storefront, even the carefully orchestrated box opening ceremony. Still, I think he was able to communicate his basic sense of life in his one public speech. I strongly recommend that everyone watch it and take its ideas to heart.

My introduction to the “Apple experience” came from folklore.org – a collection of stories about the creation of the Macintosh computer. Because he was so private, I eagerly anticipate his upcoming authorized biography. But ultimately, I think his products speak for themselves. They are the concrete (or rather aluminum and glass) embodiment of the values that made Apple successful – and changed the world for the better.

Steve Jobs, you were insanely great.

Why is there no mass transit in socialist states?

Today Sarah asked me why China is only now building subway systems in all its major cities. I pointed out that non-local mass transit is a capitalist phenomena: totally aside from the fact that you need the wealth generated by capitalism to pay for such systems, there is no need to travel in a socialist economy. I think it´s just that many people forge that they can get their own Turkish Visa from www.evisa-turkey.biz.tr/.

Under socialism, the work unit is the basic unit of social structure. The vast majority of people are born, educated, work, live, and die under a single work unit (a city block, village, or factory). One cannot buy or rent a dwelling (that requires property rights) so one cannot move away from work: the State assigns nearby housing. One cannot change chose or change jobs, so one cannot move work away from home. Housing assignments are hereditary and based on local connections, so it is impossible to move away from relatives: thus no need to travel to see family.

Furthermore, there is no need to travel in order to shop: since all goods are identical commodities sold by identical state-owned stores. There is little demand to travel for tourism either, since all monuments are variations on the same state-promulgated patriotic themes. There is no incentive for entrepreneurs to promote any non-approved attractions – in fact, such activities can be quite dangerous.

Neither is it practical to marry someone across town: the work unit either regulates marriage directly (the work unit leader must approve the marriage) or indirectly: since permission is required to live together and often to have children as well.

Thus, even in places where the State created subway systems prior to the introduction of capitalist elements, they were/are vastly under utilized. In fact, their primary purpose was military defense, not transportation.

Re-evaluating the value of religion

This essay was written on August 13th, 2003 and edited slightly for this post:

Is religion a value to mankind? Some alleged benefits which have been attributed to religion include: scientific and philosophical principles, technologies such as the printing press, the colonization of the new world, great works of art such as Michelangelo’s David and the Sistine Chapel, monasteries that preserved and carried on knowledge during the Middle Ages, social institutions such as charities, schools, and universities. It’s undeniable that all these things have benefited mankind and that religion played a part in them.

On a personal note, I have  benefited greatly from the Judaism. A Jewish organization helped my parents come to America, placed me in private school so I could learn English and Hebrew, sent me to summer camp, paid for my trip to Israel, and even helped fund my college tuition. In addition to these material benefits, I learned a lot about history, philosophy, ethics, Hebrew, and social interaction while attending Sunday school and then helping to teach it for three years. Many of my religious teachers were intelligent and inspirational people who taught me many things in the classroom and by example.

So, it is indisputable that religion has done many good things for man. Is this sufficient evidence to conclude that religion is a value to man? The fact that an institution does good is not sufficient evidence that it is good overall. Consider a profession which is not considered desirable despite doing some good for people: medical quackery. A quack who sells a fake remedy for all ailments provides some benefit to people: the placebo effect often makes people feel better, and the alcohol, cocaine, and other drugs contained in remedies were often effective and making their users feel better. However, despite the benefit he provides, the quack also defrauds people, does not fix underlying health problems, and often addicts his patients to his “medicine.” Even though the quack provides a benefit, a real doctor could provide a greater benefit to people without the accompanying harm. Thus, when evaluating religion, we must consider the total effect, not just isolated benefits, and evaluate whether the benefits religion provides are essential to its nature.

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Are philosophical claims scientifically provable?

This question makes the logical fallacy of the stolen concept.  The question of what is “scientifically provable” is derived from our metaphysics and epistemology.  We use our basic philosophy to derive the epistemological standard by which to investigate the specific aspects of reality (e.g. physics, chemistry, mathematics, and economics).  To demand that philosophical statements be scientifically validated is to demand that a derivative which depends on philosophy be used to prove philosophy.  This is like trying to build a house by assembling the roof, walls, and windows before the foundation.  It is fine to examine the whole structure of knowledge to verify that it is internal consistent and sound.  But we cannot use a higher-level deduction to prove the premise that it depends on.   The only way to validate philosophical claims is to use reason: to use logic to validate abstract ideas by reducing them to sensory evidence.

What is the difference between science and philosophy?

Science is distinguished from philosophy by subject matter: science studies the specific nature of the universe, and philosophy (of which religion is a primitive form) studies the fundamental and universal of the universe and man’s relationship to it.  Both are concerned with facts, but they differ in subject matter and the standard of evidence.  In the field of philosophy, we must be logically rigorous, but we cannot, and need not measure the physical evidence quantitatively as in the subject-specific sciences.

Science is made possible by the acceptance of certain philosophical axioms in metaphysics and epistemology. In metaphysics, science requires recognizing that all entities behave in a causal manner according to their nature. In epistemology, it recognizes that man is capable of perceiving and understanding reality by the use of his senses, and because his consciousness is fallible and not automatic, he needs to actively adhere to reason and logic to reach the right conclusions.  Science requires a systematic method to collect evidence and correctly interpret it because knowledge of how nature works is not self-evident.

Science is different in degree from informal empirical methods such as “trial and error” and in kind from non-empirical methods such as revelation, astrology, or emotionalism.   But the basic method – of rational investigation based on the evidence of reality must be used in all fields, whether philosophy, law, chemistry, mathematic, or cooking.

More:

The One Minute Case for Science.

What if we took religion seriously?

Virtually no one in the West takes religion seriously.  This is fortunate, because if people did, there could be no such thing as “Western civilization.”  With 82% of Americans professing a belief in God, does this sound like a silly statement?  Let me explain.

The Origin of Religion

The definition of “religion” varies between cultures and scholars, but generally speaking, it originated in pre-history as a solution to a problem:

At some point at the dawn of history, men discovered themselves to be in possession of powerful mental abilities able to perceive the events around them and communicate them to others, but they lacked an explanation for most of the cause of these events.  These men needed to know how to act in response to these events, both social and natural.  Instinct and imitation no longer sufficed in complex social structures and dynamic environments.  Men responded to the challenge by inventing religion.  Religion provided both an explanation of natural phenomena and a set of rules for social behavior.  It was a primitive form of philosophy — a set of beliefs about the fundamental nature of existence and man’s relationship to it.  The nature of these beliefs evolved dramatically over time:

1. The Animism of Primitive Man

Primitive pre-literate man dealt with the chaos of nature by creating animistic spirits which he begged to improve his condition.  Since his prayers and offerings were no better than chance, he led an unpredictable existence dominated by fear.  Nevertheless, a philosophy of existence, crude as it was, was an important survival asset to the first human settlements.  Many thousands of years of pre-history passed in this state.

2. Technological Priesthood & Early Civilization

The first civilizations organized spirits in polytheistic anthropomorphic cults, which held centralized political and religious power.  The technological priesthood was an elite which was either closely related to or was ruling elite and monopolized the dissemination of both practical knowledge and supernatural doctrines (there was little distinction between the two), and was thus able to control the peasant masses which it taxed and enslaved to remain in power.  Their monopoly of technical knowledge was the cause of their eventual downfall:  Egypt, Mesopotamia, Minoa, the Indus valley civilization, the cults organized around the Hebrew temple in Palestine, and the native New World empires successfully kept their secrets from the masses, but were all destroyed by innovative external invaders.

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