It’s your BATNA too

As an attorney who spends his days drafting and negotiating contracts (I am not a litigator), one thing I have to keep in mind at all times are my and my counterparty’s BATNAs (Best Alternative To a Negotiated Agreement). I and my counterpart to a negotiation (usually we’re two lawyers) are trying to get the best deal we can for our client, but we are also trying to make sure the other side doesn’t walk away from the table, as the prospect of a deal has become worse for them than no deal at all.

In a sense, I own both BATNAs. I have to, as a matter of professionalism. If my client would prefer a deal, but my counterpart ends up preferring their BATNA, my client loses the deal and gets his own BATNA, even if that makes him worse off. I have to consider that, or I’d be a bad negotiator. I also counsel my clients on this, as a reminder to them to not be too greedy, and instead by creative about finding deals that work for everyone.

That’s why I have zero patience with complaints from Verizon and Comcast about the new Net Neutrality rules promulgated by the FCC. The internet carriers the United States have today had, by global regulatory standards, unprecedented free reign to invest in their networks, manage them for growth, and innovate on services and delivery. A few of them, such as Google Fiber and Chatanooga, TN’s municipal ISP, used it to deliver real value to consumers – but most did not. The majority of American ISP’s wasted that opportunity thoroughly, by taking the maximum amount of profit for the minimum amount of service, while stifling competition at every opportunity. They worked tirelessly to see to it that the people of America preferred their BATNA to a deal. Now the government, as the agent of the people’s will, have chosen that BATNA, and Verizon, Comcast, and the like own that BATNA just as completely as FCC Commissioner Tom Wheeler.

There are no short-cuts here

Most of us who have spent some time online are at least passably familiar with the protocols that allow the Internet to function. HTML and CSS for web pages, SMTP for email, FTP and Bittorrent for files, and so forth. Recently a new protocol has been proposed by Juan Benet called IPFS, which rather grandiosely means InterPlanetary File System.

IPFS can be thought of as using Bittorrent (and a couple other things) to eradicate the distinction between web clients and web servers. Instead of a web client downloading a Wikipedia article from a server owned and operated by Wikipedia, your computer simply asks “Hey, I want this webpage”, and whichever other computer on the network is closest and had the page in cache provides it. Or a swarm of peers on the network each provide parts of it. Web pages, files, and data are all downloaded like a torrent and assembled for viewing and interacting with in the browser.

The above is a very different model from how the client/server model used by the web now, and there are upsides and downsides. One downside is that a publisher loses control of its data as soon as it is released to the IPFS network, just as surely as a musician loses distribution control over a pirated song, and it’s not clear to me how this would would work with websites like Wikipedia that try to stay current through edits. But the upsides include “broken links” being eliminated as long as one peer somewhere on the network has a copy of the file in cache, denial-of-service attacks becoming impossible, and censorship take-downs are very difficult. The internet would be transformed from a transitory web of links to a more permanent archive of data. As long as you know what you want, and someone on the web has it, you can easily get a copy of the original data long after the original publisher has ceased to provide for its existence.

Socially this has upsides and downsides as well. It’s already difficult to remove information from the web once people have it, but data distributed via IPFS would be nearly impossible to remove. That’s probably bad, in situations where someone stole your personal and private information, or spread harmful misinformation. It would also be hard to remedy any cases of libel and slander. And it’s also hard on anyone who makes a living from control over copyrighted works. But the benefits are of course immense, as information will not get lost, web pages won’t die, and maybe Vint Cerf’s concerns will start be mitigated.

Despite these upsides, I suspect that the copyright industries (music, movies, and television in particular) will bring out the heavy guns to fight the deployment of IPFS. The payoffs of IPFS being successful are too asymmetric for it to be otherwise – archival benefits accrue to society, and the loss of control costs accrue to them. In in response to this concern, Juan Benet has given probably the most cogent defense of personal responsibility I have seen from a technology developer:

That’s how the internet works. If people are doing illegal things (like standing up to a totalitarian regime), they take on the risk of repercussion. (We can’t tell a-priori what the information content is reliably).

People shouldn’t accidentally store illegal things they don’t mean to (hence blacklists) but you also don’t want to snuff out freedom of speech of those who understand + are willing to take the risk. The issue is routing access to it is also considered hosting it (dcma takedowns for links on the web).

I think that the best thing is to have the default [Distributed Hash Table] include blacklists that can be updated to handle DMCA requests. Sort of like [the Domain Name System] works today. Definitely something that we’ll have to figure out as time goes on.

Ultimately, it is only our own responsibility to behave virtuously, and distinguish virtue from the law. We cannot rely on technology to a priori know this for us. The world is too messy for that, and ultimately its a judgement call as to whether a particular action should be pursued. Anyone who tells you otherwise is looking for the easy way out and, in their attempts to ban all instances of the illegal, inevitably over-reach and ban much virtue we’d prefer not to live without.

A Farewell to Conspiracies

At common law, a conspiracy is an agreement between two or more people to commit a crime. I would add in many secretive government activities too, such as spying, which are crimes as far as the victims are concerned. We won’t be seeing them very often in the near future. In fact, that future is already here – just not evenly distributed.

Last month a new software program was uploaded to Github called Darkleaks. It’s billed as a decentralized auction for information. What that means in practice is that someone with access to information (such as the Pentagon Papers, a movie script, or the NOC List) can sell that information without meeting the buyer or revealing their identity. The sale is handled entirely online in a trustless manner. And the auction is distributed – it cannot be shut down any more than Bittorrent or Tor can be.

And the first auction is now underway, as I first learned from Andrea Castillo at Mercatus. The Silk Road 2.0 website was shut down by law enforcement, but now one of the administrators of the website (or so they claim to be) has popped up offering server data for sale. Transaction histories, user names, passwords, and source code are for sale. To the extent any of this information can be traced back to real world identities, it offers the possibility of exposing the buyers and sellers that participated in that dark market.

The technical details of how the auction works are interesting, but Andrea explains them well enough. I suggest reading her piece for details on how trust is established between buyer and seller under such unusual circumstances. What’s more interesting to me is how this technical innovation will affect society.

Lets examine the characteristics of this seller, and think about what it means going forward. This person is not authorized by any entity (certainly not the bosses of the Silk Road 2.0 website, or its users) to divulge this information. They simply have access to it, and are willing to trade that access (in the form of an upload) for money. And they are doing it in such a way they can deny they’re the ones providing the access. This auction could be initiated by anyone with the appropriate server access (including unauthorized hackers).

Think of all the organizations in the world that depend on secrecy to function, and use fear and force (whether legal or illegal) to make non-ideological members keep the secrets. Mafia families have accountants and secretaries (and also unreliable family members). Spy agencies and large corporations have many thousands of employees. Even ideological organizations like ISIS or Al Qaeda will have to deal with alienated members looking to get out and make a couple bucks doing it.

Further, the software used to list an auction runs on regular personal computers. Anyone with the technical skill to collect useful information in the first place will have the skill necessary to list an auction. The primary barrier to entry is that only those with decent operational security (using one-time email addresses and such) will be able to use this system with a low risk of getting caught. But with the financial incentive the auction provides, many can acquire these skills.

In essence, there’s no real barrier to auctions such as this from becoming a widespread practice. And there are a number of uses I can foresee immediately. Governments around the world are known to hoard zero-day vulnerabilities in major software (that is, methods of hacking in software systems that aren’t generally known to the security profession). These same governments also create hacking tools. Knowledge of both of these is very commercially valuable and would likely produce “good” auction results. So would lists of spies in foreign jurisdictions.

Criminal organizations depend heavily on their activities remaining secret, or at least keeping law enforcement divided and disorganized. If interested and wealthy members of a society made a practice of buying this information and releasing it to public news agencies (so that political organization could rally to defeat the criminals), this could make it very hard to organize crime. It would also be hard on the politicians and members of the judiciary who may have abetted the criminal organization’s activities.

Corporate whistleblowers will also now have a means of releasing information, making some money, and not losing their jobs. (Unless the whistle-blow causes their corporate employers to be shut down entirely I suppose) This will prove very tempting to many people who might feel their employers are up to no good, and for whom the money is just the kick in the pants they need to ‘do something’.

The list goes on, and readers should feel welcome to add more ideas in the comments.

Andrea makes the argument in her post that “defensive purchasing” of the information might be something that some governments or criminal organizations might engage in, but she misses the point that defensive purchasing will be totally ineffective. There’s nothing that prevents the information from being sold a second time. After all, information can be copied an infinite number of times. The seller doesn’t “lose” his copy when he makes a copy for the buyer. If Monsanto buys an auction that claims to divulge some ugly corporate practice, they’ll make the seller some money and then the seller can just re-auction the same information next week. Defensive purchasing just makes the seller richer while buying the target of the leak no additional security. If a seller is determined to maximize their own income, they’ll keep selling the same information over and over until someone makes it public (making future auctions pointless). And so every auction game ends eventually in total transparency.

The long term effects of this new reality are not certain. On the one hand, criminal and abusive conspiracies will never get very large or old. Each additional person who knows the secret is an increased risk of betrayal, and the knowledge end-game will drive rational actors to betray first and at least make a buck off it. This will reduce crime and also (hopefully) corruption in government.

The “downside” of this change is that all enforceable contracts will have to rely on the public courts, which means that the government will suddenly have a really big advantage in stomping out any sort of activity it doesn’t like. You may think that sounds generally like a good thing, but imagine a government that decided to outlaw things we today consider legal and safe activities (and ones you enjoy). If criminal organizations are so beset by internal betrayals that they cannot function, then even black markets won’t be an option for you. The government, as long as it retains the support of the voters and maintains the monopoly of legitimate police and Courts, will have a lot more power to regulate our lives.

Somehow I don’t think that’s the end result the anarchists that programmed Darkleaks were planning on, but then, they’re good coders, not good political scientists. And this is how I see it playing out.

The Miracle of Comparative Advantage

My co-blogger Boatfloating makes the point that excellence in one field does not necessarily mean that excellence in other fields, and this is a good thing! Who among us is world-class at everything? Certainly not I. I don’t have an NFL physique or Pavarotti’s pipes.

This reminds me of the miracle of comparative advantage and trade. It makes me profoundly grateful to be alive in this era when I think about how we are really no better, in terms of raw human potential, than the ancient men and women that first planted fields in the Fertile Crescent, or crossed the land bridge from Siberia into the North America, and yet we are so much wealthier and live lives of such greater ease than they. Isn’t it amazing that from such crooked timber a society as ours has been fashioned? It’s a miracle is what it is, and we should all be thankful that there are opportunities for us to live better than the Kings of old even with the limits we all have.

Robot Jobs, a Series

From Inc., a new company Harvest Automation is building a robot that does one job very well: moving planting pots. Aside from the improved economics of planting in pots and having robots manage the “fields”, there’s this comment from the unskilled laborers that used to move thousands of pots by hand:

Currently, growers have a shortage of workers, so they plan to keep [all current employees] on and give them higher-value tasks. And the workers [Harvest Automation is] training tell us they would much rather supervise robots than move pots around by hand.

The robots are coming. There really can be no dispute about this. Even in China, where labor costs are lower than the United States, the roll-out of robots continues (even if not on the original schedule). Millions of jobs are going to disappear.

Whether this is a good thing or not is besides the point. I, personally, don’t mourn the loss of dull, repetitive work like moving plant pots. I think these unskilled laborers will be much happier and healthier in their new role. But that’s just me; maybe you disagree. Doesn’t matter. The robots are coming. The only question is how we are going to respond. And since the beginning of the industrial revolution in England, there have been generally three response: sabotage (King Ludd), stepping up the human effort of competition (John Henry), and working with the new technology (John C.).

Of course the Luddites failed to stop progress and John Henry died trying to keep up with that steam-shovel, but who’s John C? He’s my grandfather. He was no Henry Ford or John D. Rockefeller, taking the technology of automation out to the limit, but he was an engineer and he owned a farm. Comparing the average worker to some industrial titan wouldn’t be fair, but everyone can do what my grandfather did. He approached the technology of his era with an open mind, and used it to make his own job better, and make himself more effective at doing it.

The robots are coming. Maybe they aren’t coming for your job this year or next, but keep an eye out for them. If you see them coming, I have only this advice – embrace them quickly and learn to use them before your customers do. Then figure out how to add value on top. As an early adopter you’ll be creating more value than any of your competitors, and when your customers finally do wise up to how the robots work you’ll already have a plan for still making a living.

Low-cost access to space is a game-changer

In my previous post on SpaceX and its rocket ambitions, I argued that low-cost access to space would be revolutionary in the same manner that ocean navigation or rail roads were revolutionary, giving the global economy a broader scope of activity and greater access to resources. I intended to leave it at that, but recent new is just too topical to pass up.

A few days ago Elon Musk announced that SpaceX will start building satellites in house, and their first project is to build a constellation of satellites orbiting at 750 miles altitude (which is fairly low, for a satellite) to provide broadband internet access to the entire globe, and also serve as an internet backbone. Many satellites just communicate with ground stations, bouncing messages back and forth between the Earth. If I understand Musk’s comments correctly, it seems like these satellites will communicate with each other in orbit too, passing signals among themselves as an internet relay competing with the undersea fiber optic network. The benefits of such a system over the current fiber networks are: global coverage, that signals travel faster through space than through fiber, and satellites are less likely to get hit by fishing trawlers or attacked by sharks.

A reasonable skeptic would ask at this juncture though whether anyone has tried this before, and what their success was like. The answers to those questions are “Quite a few”, and “Total failure”. The Iridium constellation cost over $5 billion and went through bankruptcy. Today the satellites are still in orbit but provide mostly just expensive cellular phone and paging services. The Teledisc constellation (which sounds very similar to the proposed SpaceX plan) failed before even getting off the ground, despite funding from Bill Gates and a Saudi prince. Globalstar went bankrupt shortly after launching its constellation, and the successor entity continues to downsize and cut costs. SkyBridge LLC failed so completely it doesn’t even warrant a Wikipedia entry, and its spectrum allocation was sold to WorldVu which hopes to launch satellites in 2019. (Hope springs eternal)

So given that every previous attempt has gone bankrupt, why should we get excited about this one? Well, the answer returns to the economics. The physics of bouncing signals between satellites is well understood – everyone loves their GPS network and DISH Television has may fans. It’s the economics of providing the very large constellation necessary to power high-bandwidth, low-latency data coverage to the entire globe that’s been the problem to date. Specifically, the launch costs of reaching orbit are ridiculous. As I mentioned previously, the Space Shuttle cost between $1-2 billion per launch, and the expendable rockets offered by Boeing, Lockheed Martin, and Arianespace cost hundreds of millions per launch too. Each of the above failed ventures represents billions of dollars in launch costs.

SpaceX meanwhile has brought launch costs down significantly, even before achieving reusability. The Falcon 9 costs $61 million per launch, and the Falcon Heavy when it goes operational later this year will be only (“only” is a relative term in space flight) $85 million per flight for the most capable rocket launched from the United States since the Saturn V was retired. The next biggest rocket, the Delta IV Heavy from Boeing, costs 900% more per pound – $375 million for half the cargo. If SpaceX does achieve reusability later this year, costs should drop by another 50% immediately, and eventually as much as 90%. Furthermore, it’s very likely that conservative commercial and military satellite customers will not want to take a chance on a “used” rocket immediately, and will continue to pay full price for a couple years to get new ones, letting SpaceX fully pay off their rocket on the first launch and then launch their own satellites on the following flights for just the cost of fuel and operations. Combined with the constantly falling costs of electronics (Thanks Moore’s Law!), SpaceX’s venture should have a much lower cost basis than any previous attempt.

This new satellite venture is just the first taste of what low-cost access to space will bring. In the years to come, especially as SpaceX solidifies what its pricing will be post-reusability, you should expect more announcements of companies and projects that finally deliver the thriving space economy that in the 50s and 60s was expected to be just around the corner. Now I think it finally is.


This post is a brief interlude from our normal discussions on virtue, ethics, and community. For a moment, let’s talk about rockets. They’re really big, and really cool, and they’re about to change human history forever.

Check out this Vine:

What you’re looking at is the first stage of a Falcon 9 rocket failing to land perfectly on an autonomous spaceport drone-barge in the Atlantic Ocean. Let me break that down for you and give you a bit of background just in case you don’t follow developments in rocketry.

Who is SpaceX, and a bit of history

SpaceX is an American aerospace company based out of California, founded in 2002 by Elon Musk (previously a co-founder of PayPal) with the stated goal of lowering the cost of access to space, and in the long term, colonizing Mars. They have several future rockets in development, but their current work-horse rocket is the Falcon 9. It’s the first and largest of the Falcon 9’s two stages you see crashing in the above Vine. Since the Falcon 9 was introduced to the market in 2010 it has filled its launch manifest with contracts from both NASA and the private sector, business that came at the expense of existing rocket companies like Boeing and Arianespace, by offering access to Low Earth Orbit (LEO) and Geosynchronous Earth Orbit (GEO) for substantially lower prices than the competition.

The Falcon 9 however  is an “expendable launch vehicle”, or ELV, which means that each rocket launch is a one-use event. The rocket is not recoverable, and a new one is built each time. Needless to say, this is a very expensive way to do business. Imagine what airline tickets would cost if they threw away the plane after each flight.

Of course the problem of expendable launch vehicles being wasteful and expensive has been known for a long time. This was obvious during even the dawn of the rocket age immediately after World War II. There was some work done on reusability back then, but those projects were quickly scrapped and the funding was moved to expendable design. The reasons for this were two-fold: (1) the military needed rockets to deliver nuclear payloads, and those sorts of rockets are a one-way trip. Reusability is a wasted feature on an ICBM. And (2), President Kennedy wanted to reach the Moon on an incredibly ambitious time schedule in order to beat the USSR at something. Expendable rockets are simpler to build and fly, and the technology easier to develop, so they could meet the politically imposed schedule that reusable rockets could not. To the extent the Apollo program intimidated the Russians and helped prevent the Cold War from escalating into a hot one, it was probably worth it, but rocket reusability was lost for a generation.

The next attempt to build a reusable system was the Space Shuttle, and it was a partial success, but mostly a failure. The Space Shuttle Orbiter (the white quasi-plane looking part) was partially reusable, but not rapidly so. It required significant refurbishment between each mission (especially on the heat-absorbing tiles), which was very expensive. Further the solid rocket boosters on each side basically had to be rebuilt each time they were used (a bit like rebuilding the engine of you car between each trip to the grocery store), and the big orange external fuel tank was lost entirely. The end result is that the Space Shuttle flew infrequently and cost between $1 and $2 billion per launch, depending on how you chose to do the accounting. Not very frequent, and not cheap. (By comparison, Falcon 9 may have a smaller capacity than the Shuttle, but a new one can fly every month and for only $65 million per launch).

NASA fiddled around a bit more with reusability in the 90’s by experimenting with the DC-X and VentureStar concepts, but both of these projects were eventually abandoned by NASA despite their technical merits and NASA has not done anything significant in the RLV space since. Ever since that time NASA has (in my opinion) been fatally captured by the special interests in Congress more interested in funneling government money into local-district jobs than reaching space, and the Constellation-come-SLS programs have been a sinkhole of money and engineering talent from which no useful rocket will ever fly.

SpaceX picks up where NASA left off

Now it’s precisely into this morass of despair that mankind will never develop cheap access to space that Elon Musk ventured when founding SpaceX. We know from interviewing engineers who started the company with him that Elon demanded that reusability be built into the Falcon’s Merlin engines from the very beginning, even if the rockets themselves weren’t reusable yet. Elon had learned the lesson of the Space Shuttle – it wasn’t enough for a rocket system to be “sort of reusable”. If access to space was going to be cheap, reusability had to be rapidly reusable, or RRLV. Basically – fly, land, refill the tank, and fly again within a day or so. No six-month refurbishment cycle, no strap-on boosters that need replacing.

SpaceX is advancing quickly towards that goal, and has already made more progress than NASA ever did. As I mentioned earlier, the Falcon 9 only flew for the first time in 2010. The “Grasshopper”, a modified Falcon 9 used in Texas to test reusability, was built only a year later in 2011 and flown between 2012 and 2014. Here’s some videos of those test flights. In 2014, following an ordinary rocket launch (if any of them are ordinary yet), SpaceX caused the Falcon 9’s (since upgraded to v. 1.1) first stage to decelerate and briefly hover over the Atlantic Ocean before landing in the water. The stage wasn’t recovered but it proved deceleration to a controlled landing was possible. And so it was that last November SpaceX revealed its autonomous spaceport drone-ship, a football field-sized drone-ship that a rocket could conceivably land on.

(As a side note, the ship itself is really cool. You think remote-controlled drones that Amazon sells are cool? Or that Google’s self-driving cars are the bees knees? Well this is a drone ship the size of an oil rig that can hold position in stormy seas and a rocket can land on. What a great synthesis of recent innovations in offshore platforms, sensors, and drone technology.)

Now as you saw in the above Vine, the landing was not a success. That’s shame, but I bet the folks at SpaceX are really happy with it anyway. For one thing, this wasn’t an expensive test-flight rocket built just to land on the barge. This was a fully functional (and paid for) Falcon 9 that had already delivered a Dragon cargo spacecraft into its docking orbit with the International Space Station. This flight had paying customers satisfied with the performance; SpaceX is basically having NASA pay for its test flights.

More importantly though, this was only the first attempt to land on an free-floating platform at sea that’s ever been attempted by a vertically-landing rocket (or any kind of rocket, that I know of). It’s amazing to me that the rocket even hit the barge at all. For a rocket coming in from 80 km up and traveling at Mach 10, finding a 100′ by 300′ target in the middle of the Atlantic Ocean and landing on it even as gently as was seen is incredible.

And of course this isn’t where the story of SpaceX’s reusability program ends. The reason this rocket crashed is already known (it ran 10% short of the necessary working fluid in the hydraulic system controlling its wings). A bit more hydraulic fluid will be added to the next attempt (in just three weeks!), and maybe this time the Falcon 9 will stick the landing. Or, as Elon admitted on Twitter today, maybe the rocket will blow up for another reason entirely. But the point is they keep learning and trying. Eventually I have faith they’re going to get this, and the Falcon 9 will become the first rapidly reusable space transport system the world has ever seen – and probably some time this year, as they have twelve flights on their manifest to keep trying with.

But why should anyone besides a rocket nerd care? 

Okay, so possibly some time this year SpaceX may land a rocket, fill the tanks back up, and fly again. What’s this mean in practice to the average Joe?

This is where economics comes in. Currently, a Falcon 9 costs $65 million / flight and puts 28,000 lbs of cargo into Low Earth Orbit; that’s about $2,100 per pound. The Falcon Heavy (the next generation SpaceX rocket to fly for the first time this year, but using mostly proven Falcon 9 technology) should bring the price per pound down to around $1,000. Not bad at all, compared to contemporary and historical examples. But that’s based on the ELV design where the rocket is thrown away. What happens when we reuse the rockets? Well, prices come down – a lot.

Rocket fuel is pretty cheap. According to Elon, the fuel bill is less than 2% of the cost of a launch, or about $20/lb for the Falcon Heavy. If the cost of the rocket can be amortized over 20 flights or more, you’re looking at costs to reach orbit down around $100/lb or less. Assuming a human and all his luggage weighs 500 lbs, that’s a mere $50,000 to reach orbit. Compare that to the $70 million per person that NASA is currently paying Russia to reach the ISS. Quite a savings.

Further, consider that SpaceX is currently building (and throwing away) a new Falcon 9 every month. Imagine if instead of throwing them away, they flew them again the next month (or week (or day)). Within a year SpaceX could have a fleet of rockets making daily trips to orbit. Currently there isn’t even demand for that level of space access, but that’s because the current market is built around paying Boeing $50,000 per lb instead of paying SpaceX $500 per lb or less. When price falls, demand rises.

Once space access is cheap, what happens? Here’s some ideas-

  • You think the Hubble telescope is cool? With cheap space access, private Universities or smaller national programs could put multiple Hubble telescopes in orbit each. And bigger, too.
  • Private robotics teams could afford to send rovers to the Moon, Mars, Venus, or, who knows- Ganymede.
  • CubeSats, already cheap, could become college-project cheap.
  • Bigelow Aerospace could put inflatable space stations in orbit larger than the ISS, for much less money, and lease the space to national space programs and corporations.
  • A private company could send men back to the Moon.
  • Communication and weather satellites could be larger, and more numerous, improving life on Earth in numerous ways.
  • We could mine the asteroids for precious metals such as gold and platinum. These metals aren’t just for jewelry, but have useful industrial purposes too (like being used in fuel cells). One large asteroid can have more platinum-group metals than have been mined in Earth’s entire history. We could see within 10-15 years these metals be demoted from precious to bulk commodity, just as aluminum was a little over a century ago. The consequences of such a price change is hard to predict, but you know engineers and entrepreneurs will come up with something.
  • We could go to Mars.

And those are just the near-term ideas that people are already working on. Ultimately what’s worth noting is that Earth is only a small part of the solar system. There’s more of everything in space. Most of the Sun’s solar energy does not hit Earth. There’s hundreds of times more physical resources available in the asteroid belt than we have ever used on Earth. There’s 200 million cubic km of water just on Ceres, and then there’s the rest of the asteroid belt and all the comets. Habitable real estate is not so common, but you can make it if necessary.

Previous technologies I would compare this to would be the advances in navigation and ship design that propelled European explorers, settlers, and colonizers to every corner of the globe in the 1500-1700s, the invention of the rail roads connecting the American continent and the Russian frontiers, and the advent of container shipping which really globalized the world economy. Each of these inventions made what had been previously unreachable, available and cheap. The European settlement of the Americas essentially quintupled the physical resources available to Western civilization, a fact that we are still in the process of developing. The containerization of trade (along with a steadily improving regulatory climate in East Asia) made Japan, Taiwan, South Korea and China into economic dynamos. And so giving humanity access to 1000x more energy and physical resources that it previously had will have … unknown effects. But you can bet they’ll be big. Get ready. We’re about to see an expansion of human economic activity that only comes along every few centuries. It’s going to be awesome.

Leading By Example

In my previous post, I criticized Nathaniel’s ethic of unilateral charity as being ineffective or even perverse under certain institutional arrangements. An abolitionist who merely bought slaves to free them would only cause the evils of the slave trade to increase while enriching the slavers. However, I don’t want to be seen as being overly critical of Nathaniel’s ethic, because it’s truly beautiful. In fact, I should say that it should be the default ethic. We should always strive to act unilaterally and directly first, and only fall back to collective action when it’s obvious an institutional failure prevents our unilateral action from having positive effects.

Again, to keep things concrete, I will use the example of chattel slavery in the American South. This institution was obviously evil in pretty much every way, so there can be no reasonable debate as to whether a virtuous actor should strive to end it. The question is: how? My contention was that Nathaniel’s strategy of simply buying them and setting them free is naive, and probably harmful.

My suggestion, were I to travel back in time and find my opinion on the matter requested for some reason, would be to work on improving the white culture in the South, and their perception of blacks as people. Cultural and legal change would then flow from the majority’s view that “Hey, blacks are people too.”. Of course this process eventually did happen in America, over a hundred years or more, but there might be opportunity to speed that along. This task would not be Sisyphean (there’s an end goal that’s possible to reach), but it was indeed Herculean and required much charitable effort. And notably, the laws that eventually made a real difference in improving black lives (such as the Civil Rights Act, and ending the poll taxes and literacy tests) did not happen until after this process had reached a critical mass of American voters.

How would I have speed up this process? This is where Nathaniel’s ethic of using sympathy to end the cycles of injustice comes into play, but we apply it slightly differently. Rather than buying up all the slaves, I would pass the hat around at the local Abolition society in order to buy a few dozen slaves. Of course I would offer these slaves their manumission and the choice to simply walk away (otherwise, what sort of abolitionist would I be?), but I would make the argument to them that they can best help their own situation, and their children’s situation, and the culture at large the most by becoming a champion of black dignity and charity. Notably, by helping whites. Yes, whites.

Slavery is was a problem for blacks, but was a problem of whites. Slavery was a white problem, and its ending is a sign of white progress. It was the English communities that legalized, condoned, and practiced slavery that bear the flaw. You have to fix that flaw, and the only way to really fix it is encourage brotherly love from whites to blacks. To end slavery most effectively, whites have to love blacks; which is to say, blacks must make whites love them.

Does this sound fair? It’s not fair. Life ain’t fair. Get over it.

Imagine, if you will, if the Abolition Society took it upon itself to teach a freed black slave a trade such that he was able to provide for himself in early 1800s America. Maybe he’s a carpenter. And every couple years this carpenter takes on a white (yes, white) apprentice. This youth, raised in a racist culture, probably doesn’t have a high opinion of the black carpenter, but he needs a job and this one is on offer. Over the course of several years, no matter how derogatory the apprentice may behave, the black master treats him with dignity, pays him fairly, and makes an effort to teach the young man the ways of carpentry. After a few years, the master lends the young man a bit of money if necessary for him to get started with his own tools and business.

Now imagine that happening with dozens, or hundreds, of black professionals every year turning out many young whites on the world that see them as fair and dignified people. In this way I think the process of love between the races could be speed up quite a bit.

You’ll notice that the path I have described (based on Nathaniel’s ethic of redeeming the sinners) is very different than what actually happened, which is why our poor nation has had such a hard time of it on race relations. The Abolitionists seemed more concerned with using legislative tactics and war (but I repeat myself, as law is force too) to simply compel the rest of white America to comply with the Abolitionist view of the world. Even if the Abolitionists were morally right on slavery, they caused unnecessary loss and strife in their impatience and desire to achieve ends rather than change hearts. Further, the black community has often taken a view of having “black institutions” like Howard University or the NAACP help black people, feeding into the “us vs them” atmosphere that has poisoned race relations all these years. More action by both parties at the local and personal level, and with a goal of changing the heart of the racist rather than forcing his lips to comply, would, I think, have helped a great deal. It certainly would have set a great example.

They Can March With Me

In Greek mythology King Sisyphus was punished for deceitfulness by being compelled to roll a boulder up a hill, only to watch it roll back down, and to repeat this action forever. Upon hearing this story, everyone I’ve ever met have agreed this would be a fairly frustrating way to spend eternity.

I can’t help but think of Sisyphus when reading about the ethic of my new co-blogger Nathaniel Snow. I find Nathaniel’s deep commitment to personally fixing the problems around him (rather than waiting for government to do it) to be very inspiring, and indescribably admirable in their charity, but also a bit short-sighted. (Sorry!) The issue I see is that there are circumstances where his strategy of unilateral charity brings lasting change, and circumstances where it does not. In this latter situation, the ethic leads to a Sisyphean task.

To keep things concrete, I will use the example of ending slavery and manumission. Nathaniel has made the case (and sensibly) that it would have been a lot more straightforward (and perhaps even cheaper) for abolitionists to have simply bought chattel slaves from their owners and set them free, rather than to organize politically to have the law changed in the face of stiff opposition. I can see the logic in one sense, but in other this view ignores that slaves (until the law was changed to end the slave trade) were a renewable resource. If one were to raise charitable money to buy all the slaves in Savannah (and the owners were willing to sell, which is another issue we’ll ignore for now), there’s nothing to stop the former owners to take you money, walk down to the port, and buy the next shipment of slaves coming in from West Africa.

In the above situation, the unilateral actor has actually made the situation worse. Now instead of there being a single African abducted from his or her home and shipped overseas, there’s two. The slave-owner is no less worse off (assuming slaves of equal quality), the charitable actor is poorer, and the scallywags involved in the slave trade have made twice as much profit on their endeavors.

Furthermore, there’s no obvious point at which this cycle stops short of the entire population of Africa being forceably moved overseas. From the point of view of the market, the charitable actor is just another source of “demand” for slaves.

Where I think Nathaniel’s ethic works best is illustrated by the example of his previous post, where he makes the point of knowing the people in his community and helping them. In his example community there is no obvious institutional failure. Parenting often involves personal failures (as I will be the first to admit), but it takes place within a good system. Inside that good system, good people are empowered to help each other effectively, and a few kind words and deeds go a long way to Pareto-improving everyone’s situation. This is the admirable and inspiring part of Nathaniel’s ethic of individual action.

So that’s the difference I think that illustrates when individual action is positive, versus when collective action is necessary. Inside a good system, individual action produces Pareto-improvements. (In fact, we could define “good” systems that ones that allow Pareto improvements from individual action) In bad systems, individual actions produce perversity, and collective action is necessary to change the system (because only a tyrant can change a system unilaterally). Note, however, that I’m not arguing against charity and personal sacrifice, those will be required in either case. In the collective action cases, charity is not only possible but required; write a check to your local Abolition Society, and volunteer your time.

Scientific Government

What would it mean to have a “scientific” government? Does it mean that you rely on the government to make scientific determinations on matters not related to governance? That would be a mistake. Science is a process that only incrementally crawls towards truth, and at given times is (later revealed to be) frequently wrong on matters of consensus opinion. Add the distortions that political incentives introduce to reasoned decision-making, and you’ll often get dogmatic pronouncements without the necessary caveats and disclosures of unknowns.

However, part of my support for Ordoliberalism is based on the idea of scientific governance in the sense of “let’s do experimental governing and see what happens.” In my previous post I alluded to governing “not always without missteps or uncertain outcomes”. What I was trying to pack into this little parenthetical was a disclaimer regarding the limits of knowledge, but also the willingness to proceed anyway with humility, tolerance for risk, and willingness to change our minds (and policies) in the future. At one time there was widespread belief that communism was a more efficient means of running an economy than the combination of free markets and rule of law that you see in Common Law jurisdictions. And some countries ran a large (and terribly horrible) experiment based on that hypothesis. The hypothesis proved to be wrong.

When I say that Ordoliberalism holds the promise of better government, I don’t mean that I (or anyone else) knows what the optimal policy mix is with a great deal of certainty (if such a thing can even be said to exist). What I mean is that we can approach governance the same way we approach chemistry or any other science. Government should be seen as a field of social science, one with discipline, humility, admission of ignorance, and the willingness to be wrong on occasion. Because government effects the real lives and property of real people, we should of course try to keep these experiments as small and local as possible, and correctly quickly when (not if) people start getting hurt.

Is this ideal achievable? I think it is, on a small scale. Getting a population of people to volunteer to be guinea pigs will always be hard, but it’s a lot easier on the scale of towns and counties than States and Federal Republics. This is one of the reasons I agree with the teachings of subsidiarity – the more laboratories of democracy we have running experiments concurrently, the more quickly we grow the public good of governing knowledge.