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Don’t label me, man.

September 19, 2017
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I have good news and bad news for lovers of fermented tea, aka kombucha. First, the good:

If you purchased GT’s kombucha products between March 11, 2011 and Feb. 27, 2017, you may be entitled to benefits from the kombucha class action settlement.

Sweet! Now the bad: the GT’s and Whole Foods are being sued by a competing purveyor of probiotic beverages, KeVita, for underreporting their drinks’ sugar content. I knew something about their Trilogy flavor seemed too good to be true.

In related news, Glenn Greenwald’s The Intercept reports on a Whole Foods supplier – Pitman Family Farms – that is accused of falling short of standards for the humane, “free-range” label they use on their Mary’s Free Range Chicken product. It’s unclear from the story whether Pitman raises chickens from separate substandard facilities and labels them as such, but it doesn’t look good for either company.

As someone who may spend $8 for a dozen eggs on occasion, I want to know that what I’m buying is the real thing. One solution is better labeling. The same health food newsletter that recently extolled voting with your dollars ended with a plea for activism, in the form of support for the National Organic Standards Board, a federal advisory board of dedicated volunteers. But the inspectors seem to not be doing their jobs, and who could blame them? There are thousands of small organic farms and only a handful of bureaucrats, who prefer air-conditioned offices to smelly hen houses. Industry probably sets up their facilities in a way that makes it easiest for inspectors to check the right boxes, not engage a thoroughgoing search for truth. This is not to impugn anyone’s motives, just speculate on how I might act if I were in the inspector’s shoes.

In the case of GT’s kombucha, it took a rival producer to discover the “”error”” in GT’s nutritional facts. In the mysterious case of the “”free””-range chickens, it was the private news outlet that brought you Snowden’s leaks on drone strikes and the NSA that shined a light in the chicken coop. Even public goods like transparency and accuracy in labeling can come from competition. The mistake is thinking that the label, the standards, or the legislation are what create accountability.

Good Earthlings Vote with Their $$

September 18, 2017

Fairfax, California (population: 7,598) straddles the cosmopolitan haven of San Rafael and the more rural West Marin. It’s a town where everybody seems to know everybody – where town drunks rub elbows with local police, bikers with cyclists, hippies with yuppies, rednecks with tattoo freaks, and pot farmers with cowherds. These charming contradictions have earned Fairfax the nickname of “Mayberry on Acid.”

Good Earth Natural Foods, in the heart of downtown Fairfax, sells groceries to customers who care about recycling post-consumer waste. I had the pleasure of shopping at Good Earth yesterday, and picked up their latest newsletter, The Good Earthling. This issue was promoting organic food as the foundation of good health, and organic soil as the foundation of organic food. The back-page article, titled “Vote with your Dollar!”, says:

The simplest and most poignant form of food activism is voting with your dollar; making every place or way you buy your food a conscious decision about who you support, and who you do not. Your monetary choices combine with the monetary choices of likeminded individuals to make waves, and have significant effects on whether or not certain entities are allowed to thrive, and grow.

Once again, progressive values are suddenly being expressed in terms of decentralization and individual choice. Could the 2016 election have permanently de-romanticized politics for a certain segment of the population? Let us hope.

Good-Earthling-Sept-Oct-2017-1

Be a good earthling. Vote with your dollars and buy good grass-fed meats. It’s good for the soil, good for the animals, and good for you.

Michael Strong on SF Bay/Seattle Radio

September 16, 2017
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Update: The show is now available as a podcast/mp3.

This Sunday (9/17, 8-9am PACIFIC) I will have the privilege of interviewing Michael Strong, alongside guest host and Seasteading author Joe Quirk. The topics are startup cities, education, entrepreneurship, and human flourishing. You can listen online here, or on 860 AM in the SF Bay.

Michael Strong is a contributor to this blog, founder of multiple charter schools,  author of BE THE SOLUTION:  HOW ENTREPRENEURS AND CONSCIOUS CAPITALISTS CAN SOLVE ALL THE WORLD’S PROBLEMS, and co-founder (with Whole Foods CEO John Mackey) of Conscious Capitalism, Inc.

I’m fascinated by startup cities for all of the obvious reasons, but I’m especially interested in Michael’s perspective as an entrepreneur and defender of capitalism who also speaks disparagingly of materialism, and owns very few things. He heralds a shift in the things people value, from “stuff” to meaningful experience. Our conversation will look at whether the imperatives for the under-developed world, where material scarcity is still a reality, are different from those in the developed world, where people are drowning in worthless possessions, and where infrastructure seems better suited to a bygone era. We’ll also discuss the relationship intellectuals have to capitalism, and why they have historically been hostile to the system that made them wealthy. Do they have some good points? How can we incorporate the best critiques into the foundations of the new forms of government we want to build?

It ‘s also worth mentioning that Michael is about to move from Austin to the San Francisco Bay Area to start a new school, and that Conscious Capitalism has a (dormant) Bay Area Chapter. From the website:

If there’s one place that positive change is alive and well, it’s the San Francisco Bay Area.

In the comments, I’d like to hear whether Bay Area-ites agree with this statement.

I am grateful to Bob Zadek (whose weekly show I produce) for the opportunity to sub for him this weekend. Joe and I welcome your calls at any time during the show, at (424) BOB – SHOW. Let’s give Michael a warm welcome to the Bay Area.

California Wakes Up to State Sovereignty; Still Dreaming

September 13, 2017
Panorama of Golden Gate Bridge, taken from Angel Island, the West Coast's original naturalization site.

It was only a matter of time before progressives caught on to states rights. Or, rather, it was only a matter of time, plus a Donald Trump presidency and Republican majorities in Congress. Zócalo Public Square columnist Joe Mathews recently penned an op-ed in the SF Chronicle titled, “In great American tradition, let California take undocumented immigrants.” I won’t assume he speaks for all Californians when he refers to federalism as a “great American tradition,” but this is still a welcome turn of events.

The debate over ending Deferred Action (read: deportation) for Childhood Arrivals could hasten a political realignment that bends California majorities towards support for local, or at least regional, solutions. Mathews proposes an alternative “California resident” status – not quite U.S. citizenship (which California can’t grant), but a step towards integration for immigrant children, raised in California, whose national identity and true citizenship differ. Maybe, Mathews suggests, the best way to resolve the discrepancy is to make “Californian” into something more like a nationality – a legal relationship between non-citizen residents and state government. This would imply greater sovereignty for California and, in turn, for other states seeking to reclaim powers delegated to them by the 10th amendment.

Mathews favorably quotes a researcher with the California Freedom Coalition, whose goal is a nothing short of a new nation of California. CFC might not be proposing the right route, or the right coalition, but Californians are clearly eager to lead on climate change, health care, education and technology. They rightly (in my view) consider immigrants to be assets, and are willing to invest in helping them belong here, “with the rights and responsibilities that entails.” More direct leadership would likely humble some progressive pipe dreams, like the transition to an all-renewable economy, or universal health care and higher ed. But maybe – just maybe – Californians could rise to the challenge if they temper their faith in human progress with realism, and their realism with faith.

Although our original naturalization policy was surprisingly liberal [1], there are good reasons to preserve a national identity through uniform citizenship requirements. Free movement of people among states is one of the reasons that the Constitution grants Congress authority over naturalization policy. Mathews deals with the potential spillover effects of California’s residency experiment by suggesting that Federal Government be required to deport undocumented residents arrested outside of California back to the Golden State. And indeed, the Constitution does not grant federal government authority over resident aliens in the states. This became a source of heated disagreement between President John Adams and James Madison. [2] Madison argued that the Adams’ Alien Act (allowing imprisonment and deportation of non-citizens deemed dangerous) violated due process rights of “alien friends.” Thus, Mathews’ idea sounds good in theory, and may have backing from the Father of the Constitution himself.

However, in a world governed by political compromise, states in stricter compliance with federal immigration law would need to be appeased on some dimension. Here, I wonder whether progressives could stomach the political price of federalism – namely, letting other states do as they please, even when it goes against our “”Enlightened Californian Sensibilities.”” If Mathews and the rest of us Californios could humble ourselves just a bit, we might be able to make some real progress.


[1] The Founders’ Immigration Policy, by Alex Nowrasteh, The Huffington Post Blog, 3/28/2012

[2] James Madison and the First American Immigration Crisis, by Mike Maharrey, The Tenth Amendment Center


P.S. I welcome your feedback in the comments. This is the first post to this blog in almost a year, and my first post in more than three years. I’m curious to get a sense of who is still reading.

Competitive Governance, Seasteading and Free Private Cities For Dummies

October 19, 2016

(This is a guest post by Below Potential – ed)

If you are interested in economics and/or political thought, you may have come across the following three terms:

  • Competitive Governance
  • Seasteading
  • Free Private Cities

The purpose of this post is to explain in a clear and concise manner the economic and political thought behind each of these terms. Of particular importance is to understand how these terms, respectively, the ideas behind them relate to each other.

The Market for Governance

In contrast to other markets, the market for governance has been producing meagre results. Products (the bundle of rules and public goods provided by governments) are low-quality, prices (taxes) are high and the customers (the citizens) are generally unsatisfied.

The reason for this is lack of competition. In a competitive market producers of bad products are weeded out by natural selection. In the governance industry, producers (governments) are not subject to this selection mechanism. Instead, the market for governance is dominated by a series of large geographic monopolies.

There are two reasons for the lack of competition in the governance industry:

On the supply-side there are high barriers of entry. Imagine you have a new idea that would revolutionise the governance industry. In any other industry you would have to convince some investors to give you the necessary capital. Then you could start producing and selling to customers. As things stand today, market entry into the governance industry would be significantly more difficult. You would have to win either an election or a revolution.

On the demand-side there are high barriers of switching. Switching your internet provider means something like having to send an email to customer service. Switching governance providers means either emigration or the election of a new government within your current jurisdiction.

Obtaining permission to immigrate into a country can take years. On top of that, since today’s governments often cover a whole language area, emigration may well entail having to learn a new language. The problem with elections, on the other hand, is that neither you nor anybody else has an incentive to put any effort in making a good choice – as illustrated by David D. Friedman in The Machinery of Freedom:

Imagine buying cars the way we buy governments. Ten thousand people would get together and agree to vote, each for the car he preferred. Whichever car won, each of the ten thousand would have to buy it. It would not pay any of us to make any serious effort to find out which car was best; whatever I decide, my car is being picked for me by other members of the group. Under such institutions, the quality of cars would quickly decline.

If high barriers of entry for producers and high barriers of switching for consumers are causes for the dysfunctionality observed in the market for governance, then it becomes clear that there cannot exist a solution that does not tackle at least one of these causes.

Competitive Governance

The idea underlying Competitive Governance is to minimise the cost of switching governance providers by switching between geographic jurisdictions.

This is to be achieved by geographically decentralizing political power, i.e. increasing the number (decreasing the size) of units of governance among which people could move. Low barriers of exit would mean higher competitive pressure for governments and therefore better governance.

Seasteading

While the focus of Competitive Governance is on the demand-side of the market for governance (the high barriers of switching faced by consumers), the focus of Seasteading is on the high barriers of entry, i.e. on the supply-side of the market for governance.

In contrast to the earth’s land, the ocean is largely unclaimed by states. Seasteaders want to develop the technology to create permanent, autonomous communities on the ocean, arguing that the creation of ocean platforms constitutes a much lower barrier to entry for forming a new government than winning an election or a revolution – or a war. And with technology advancing, the barriers of entry to the market of governance will decline year by year.

By opening up the vast space of the ocean for experimentation with new institutions, an evolutionary process will be started that will led to new and better products in the market for governance.

Proponents of Competitive Governance have argued for more competition in the governance industry, but traditionally they did not provide an explanation for how to effectuate this change. Seasteading can be considered as a a route for getting from here to there, i.e. as a proposal for implementing Competitive Governance.

Free Private Cities

Competitive Governance and Seasteading refer to the level of the governance industry and are agnostic with respect to the shape and form of the units of governance within the governance industry. Put differently: the question of how governance is to be provided is out of scope.

Titus Gebel’s proposal for the foundation of so-called Free Private Cities, on the other hand, provides one answer to this question. Gebel, a German entrepreneur, argues for private, for-profit companies to act as governance providers in defined territories (Free Private Cities) and he has started such a company: Free Private Cities Ltd.

Citizens/customers in a Free Private City would pay a fee for the governance services provided by the company. Each customer’s rights and duties would be laid down in a written agreement between the customer and the governance provider of the respective Free Private City.

Free Private Cities may be established within the territory of an existing state, whereby the parent state (hoping to reap benefits from a potential hub of growth and prosperity) grants the operator the right to set its own rules within a defined territory. Most likely though, the first Free Private City is going to be established via Seasteading on the ocean.

The Paradox of Revolution

September 9, 2015

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A buddy of mine coined the term “underthrow the state.” I use it all the time. What the hell does it mean? Shouldn’t we overthrow bad governance? Revolutions are bad for all sorts of reasons, but one under-appreciated reason we shouldn’t try to overthrow anything is because it’s not practical–too many free riders and bad incentives. Philosopher Gregory Kavka via Gordon Tullock:

Imagine a small country in which a small elite rules over and exploits the vast majority of the citizens. All the members of the exploited group know that if they acted together, they could easily overthrow the present regime and set up a new and just government that would better serve their interests. Furthermore, the elite regime has not rendered the exploited so fearful that they fail to communicate their dissatisfaction to one another. Initially, it seems obvious that, if the members of the exploited group are rational, they will pursue their common interests by revolting against the regime, toppling it, and establishing a new government in its place. But now consider the question of participation in the revolution from the point of view of an individual member of the exploited group. It would appear that, for him, the substantial costs of participation–the risk of being punished by the regime for participating or at worst dying in the fighting–will greatly exceed the expected benefits. For, in the first place, it is highly unlikely that his participation would significantly increase the chances of revolution succeeding. And, in the second place, the benefits of better government that would follow from a revolution are essentially public goods, i.e. the average individual would receive the benefits even without being an active participant in the revolution. Hence, if he maximizes expected utility, our potential revolutionary will not join in the revolt. Nor, for like reasons, will his fellows; and as a result, there would not be a revolution.

Enter the Delaware C-Corp, one of the greatest innovations ever created by a state. Equity aligns interests and rewards a company’s founders and employees; free riders are fired; and revenue received in exchange from customers only skims the top of the total social value created. Exit technologies developed by startups flip Tullock’s collective action problem by internalizing the benefits to a small cadre who can build better options for people to escape bad rules and legacy systems. To underthrow a bad rule set is to hollow it out on one dimension. It’s a piece by piece revolution, not wholesale.

Boundaries and anti-entryism over anti-exclusion

May 2, 2015

Reader’s of this blog are, likely, fans of political and ideological diversity: numerous co-existing and varying opinions, political systems, and schools of thought which serve as multiple parallel experiments to advance our shared knowledge. (Which may, over time, decrease diversity by increasing the number of high-certainty objective truths; but that’s another topic).

Diversity requires boundaries; not only in abstract; but existing because of local differences. Without boundaries, all mixes and becomes homogeneous (The Heat Death of Humanity). Without local differences (ie cells separated by boundaries), then all is already homogeneous. In either case, there is no diversity.

Most of the fringe groups I have known in the past were explicitly anti-exclusion – welcoming any new members – which seemed like a positive thing to me at the time after having the typical excluded nerd experience in middle & high school. It also seems like a natural policy for a small group looking to expand. Yet now I see the downside of this lack of boundaries: it decreased diversity and cohesiveness.

One of NRx’s most basic principles is “anti-entryism”: the importance of excluding those who do not fully agree with them. In the past I would have seen this as needlessly limiting their audience and growth. However, I now see it’s importance for cohesion and maintaining ideological diversity rather than being diluted by the mainstream ideas they seek to be an alternative for. So when some NRXers consider me exactly the type they wish to exclude (an “entryist”); rather than feeling butthurt by the ghosts of teenagerdom past, I now see this as a positive. I agree with some of their oddball beliefs; disagree with others; naturally a cohesive movement will exclude people such as myself.

Similarly, my natural reaction to some of their more controversial ideas is “omg, why would you say something so extreme that 95% of those who hear it will stick their fingers in their ears and run away, when you could have convinced them of some more moderate versions of your ideas?”. Yet I can see how, from the cohesion perspective, alienating potential entryists is actually a positive. The more restrictive the filter and the stronger the antipathy generated in those who only partially agree, the more cohesive the resulting movement.

Since one of NRx’s other tenets is the importance of cohesiveness over broad appeal, it is natural that they choose to prioritize the former in forming their own group. In this context, expressing their most controversial beliefs first, loudest, and in an extreme form is actually a positive. Only Gnon can judge if the anti-entryist approach is more right than the anti-exclusionary alternative.