We are having a big battle politically in our country. Superficially it is about "big government" and "big spending" versus "smaller government." Supposedly "big government" and the "nanny state" are "conspiring" to deal a blow to "liberty." On a political level the lines are drawn between the "collective" versus "individual freedom." Conceptually the battle is claimed to be between the notion of "private property" versus "commons."
But actually, all that is packaging, and doesn't hold water. The battle is between rich and poor. Not whether there will be a rich or a poor, but whether the rich will continue to run this country without the consent of the governed. the principle of democracy is on the side of the rest of us having as much rights as the very rich and on the side of the common good.
Those championing "private property" have a point until they start championing economic and virtual royalty versus the common man. The original arguments of John Locke to establish the right of people owning pieces of the commons were aimed at establishing common rights for common people. He was arguing against the Notion that the royalist should own everything by positing the right of people to own their labor, to own the things they remove from the commons by that labor. If Locke made those arguments today he'd be called a Marxist. Yet the idea of property rights was never framed to justify the creation of a class of economic barons with unchecked power. It was framed because we had class of economic barons and kings with unchecked power.
Listen to the issues the right gets upset about. They claim "card check" is a violation of liberty because it lets "union bosses" and "union thugs" "coerce workers", when in the average workplace a "union boss" wouldn't even be allowed in the place until not only after all the cards had been signed, but after a secret ballot election had been held following the card check. Unions are democratic organization. Anyone experiencing democracy in the workplace is pretty darn lucky. The issue is whether people working in an office have any rights at all. Only if they have the right to petition the government and organize can they get those rights even considered. By framing the issues in a deceptive and devious way the anti-unionists have the propaganda upper hand. They'll tell you that employers won't be able to hire workers if they have to pay them. They'll sell you a bridge they don't own...
And they get upset about providing common services to common people Actually this argument is really old. I mean really. This guy named Herbert Spencer made similar arguments way back at the end of the 19th century. He too didn't want the Government providing health care, or welfare, or even public education. He talked a lot about darwinism, which talks about collective over the individual, and then somehow connected that to the notion of individualism. If the individual is supreme what good does that do? If the issue is survival of humanity not of individuals, what does survival of the nastiest have to do with survival of the fittest. We evolved because we could cooperate.
The fact is that the main reason they oppose socialism is that they feel it might give ordinary folks the kinds of things that they feel they had to work for. In other words its a kind of jealousy. They claim that it might bankrupt the country, that is a kind of fear they never expressed when claiming tax cuts would benefit the economy. In short, it's all politics.
When I hear a guy like Roger Simon tell why he became a Conservative -- "Because of O.J" -- I want to shout at the TV screen "you idiot!;" Tell me you became a liberal because you embraced some moral and philosophical convictions. Now you tell me you became a Conservative out of the same level of emotionalism that caused you to march shouting "Ho, Ho, Ho Chi Ming!" and wanting the North Vietnamese to win. "Idiot." Principles do count, but they have to count for the right reasons.
We either champion a concept or we don't. However, all concepts revolve around the general good and our own good in perfect balance -- or they go awry.
Chris
> Dear Chris:
> Would you agree the specific is more important than the general
> though both must be taken into account? Specifically Nichiren was
> confronting the government who embraced and supported the Nembutsu.
> Generally, of course, without benevolence towards the people how
> could True Buddhism ever spread?
Both are important. Specifics that betray general principles are evil. General assumptions passed off as principles that can't be supported by specific examples, argumentation, proof of actual fact, or consequences aren't valid principles. You need both. Nichiren emphasized both. He said "so long as I'm not refuted" not "I'm right and no matter how logical your argument I'll stand by it." He didn't recommend blind faith. This is something he criticized in Honen and Honen's followers, yet we turn Nichirenism into a form of Jodo by emphasizing blind faith.
Ends and Means are "two but not two." Those who justify their means by appeals to their ends, can be observed in most cases, to never accomplish all their ends. The means they use to attain their ends sabotage their own integrity.
The following is my own explanation (and a legitimate 'Holteism') based on the structure of English and experience; but it helps illustrate the point; Your Soul is the Integral (sum) of the whole Of yoUr Life, and when you lose your integrity you are losing your soul.
We live in a topsy turvy time when people claim that maximum utility can be found in employing bad means supposedly to achieve good ends. Yet when ever is such a goal achieved?
This is what I think Nichiren was talking about. In dialogue between a Sage and a Fool, he talks about Ryokan, and how Ryokan had such a huge reputation for charity, yet his roads charged tolls that made him rich, and his other charities were equally money makers. He taught Precepts for commoners, but himself practiced and initiated people into an esoteric Shingon not all that different from Masonry, Gnosticism or other esoteric traditions. Nichiren talks about that in that (and other Gosho). Look carefully at such people and you see the means is self serving, and the ends are never achieved. Worse esotericism usually becomes associated with Antinomianism, where the people gaining the great and secret wisdom, also get the idea that they no longer need to follow the laws of society. Hence the accusations of cannibalism, if not literal.
A certain amount of antinomianism has prevailed among Nichiren followers too. So caught up in the mission that they forget that the Lotus Sutra has its own precepts. It does little good to talk about "love" and "peace", and high ideals, if those high ideals aren't turned into a list of methods and approaches for achieving them. Principles are about turning high level goals into actual peace, actual lovely relationships, and people who aren't starving and who aren't fighting one another. I think Nichiren understood this. I'm not sure how much we've understood it.
Even antinomianism can be appropriate if it means dumping the dead hand of oppressive rules for ones that embody experienced wisdom and common sense. The point is that when we discard precepts, it isn't because they aren't teaching something important, but because we should have grasped the principles behind those precepts and come to better ways to apply them. When I think it was Isaiah contrasted the unkosher deeds of the Jews of his day, with their adherence to those laws of Moses that had come to be mere ceremonies, this was a form of antinomianism that presaged Christianity, but also presaged modern Judaism. Antinomianism is presaged on the notion that all dharmas are empty of fixed characteristics. We have to find ways to apply the precepts of old to our times without violating their integrity while keeping their letter. We do that by turning them into principles that can be applied intelligently to new circumstances.
Chris
In "Nationalize the Banks! We're all Swedes Now" By Matthew Richardson and Nouriel Roubini, Sunday, February 15, 2009; Page B03
"The U.S. banking system is close to being insolvent, and unless we want to become like Japan in the 1990s -- or the United States in the 1930s -- the only way to save it is to nationalize it."
Obama tries to practice bi-partisanship. But with the bank situation we need to change course, and the only thing we can do with these irresponsible banks is to do what one does with a dog with an incurable case of rabies -- put it to death.
Here is what the authors say:
"As free-market economists teaching at a business school in the heart of the world's financial capital, we feel downright blasphemous proposing an all-out government takeover of the banking system. But the U.S. financial system has reached such a dangerous tipping point that little choice remains. And while Treasury Secretary Timothy Geithner's recent plan to save it has many of the right elements, it's basically too late."
"The subprime mortgage mess alone does not force our hand; the $1.2 trillion it involves is just the beginning of the problem. Another $7 trillion -- including commercial real estate loans, consumer credit-card debt and high-yield bonds and leveraged loans -- is at risk of losing much of its value. Then there are trillions more in high-grade corporate bonds and loans and jumbo prime mortgages, whose worth will also drop precipitously as the recession deepens and more firms and households default on their loans and mortgages."
If we follow the Geitner/Paulson direction the USA will fail rather than the banks.
"Last year we predicted that losses by U.S. financial institutions would hit $1 trillion and possibly go as high as $2 trillion. We were accused of exaggerating. But since then, write-downs by U.S. banks have passed the $1 trillion mark, and now institutions such as the International Monetary Fund and Goldman Sachs predict losses of more than $2 trillion."
"But if you think that $2 trillion is high, consider our latest estimates at the financial Web site RGE Monitor: They suggest that total losses on loans made by U.S. banks and the fall in the market value of the assets they are holding will reach about $3.6 trillion. The U.S. banking sector is exposed to half that figure, or $1.8 trillion. Even with the original federal bailout funds from last fall, the capital backing the banks' assets was only $1.4 trillion, leaving the U.S. banking system about $400 billion in the hole."
"Two important parts of Geithner's plan are "stress testing" banks by poring over their books to separate viable institutions from bankrupt ones and establishing an investment fund with private and public money to purchase bad assets. These are necessary steps toward a healthy financial sector."
And we should also be having the Justice department look at these transactions to see if there is any chance of litigating fraud and recovering money lost in ill gotten gains or downright theft.
"But unfortunately, the plan won't solve our financial woes, because it assumes that the system is solvent. If implemented fairly for current taxpayers (i.e., no more freebies in the form of underpriced equity, preferred shares, loan guarantees or insurance on assets), it will just confirm how bad things really are."
And of course that assumption is false.
"Nationalization is the only option that would permit us to solve the problem of toxic assets in an orderly fashion and finally allow lending to resume. Of course, the economy would still stink, but the death spiral we are in would end."
"Nationalization -- call it "receivership" if that sounds more palatable -- won't be easy, but here is a set of principles for the government to go by:
"First -- and this is by far the toughest step -- determine which banks are insolvent. Geithner's stress test would be helpful here. The government should start with the big banks that have outside debt, and it should determine which are solvent and which aren't in one fell swoop, to avoid panic. Otherwise, bringing down one big bank will start an immediate run on the equity and long-term debt of the others. It will be a rough ride, but the regulators must stay strong."
Personally I think that if a bank is too big, it should be nationalized even if it solvent...
"Second, immediately nationalize insolvent institutions. The equity holders will be wiped out, and long-term debt holders will have claims only after the depositors and other short-term creditors are paid off."
And preserve records and fire the present management team, anyone who was engaged in risky or shady dealings -- without golden parachutes.
"Third, once an institution is taken over, separate its assets into good ones and bad ones. The bad assets would be valued at current (albeit depressed) values. Again, as in Geithner's plan, private capital could purchase a fraction of those bad assets. As for the good assets, they would go private again, either through an IPO or a sale to a strategic buyer. "
"The proceeds from both these bad and good assets would first go to depositors and then to debt-holders, with some possible sharing with the government to cover administrative costs. If the depositors are paid off in full, then the government actually breaks even."
In the case of FDIC member banks, we need to make sure that remaining "TARP" type funds go to the FDIC not to the banks.
"Fourth, merge all the remaining bad assets into one enterprise. The assets could be held to maturity or eventually sold off with the gains and risks accruing to the taxpayers."
The bad assets need to be written down, written off, or liquidated. Folks who own toxic mortgages on devalued homes need to either have those mortgages written down to current values and the interest rates corrected to reflect reasonable rates, or they need to be converted into renters and partly foreclosed on until they can be sold to someone who can afford the home.
"The eventual outcome would be a healthy financial system with many new banks capitalized by good assets. Insolvent, too-big-to-fail banks would be broken up into smaller pieces less likely to threaten the whole financial system. Regulatory reforms would also be instituted to reduce the chances of costly future crises."
This is key. We'll need to spin off new banks. We need to create "Market Owner" banks that provide National and regional services and "Market member" banks that provide local and Statewide Services, and these need to be forbidden from owning each other, possibly by forbidding "market member" banks from buying and selling stocks.
"Nationalizing banks is not without precedent. In 1992, the Swedish government took over its insolvent banks, cleaned them up and reprivatized them. Obviously, the Swedish system was much smaller than the U.S. system. Moreover, some of the current U.S. financial institutions are significantly larger and more complex, making analysis difficult. And today's global capital markets make gaming the system easier than in 1992. But we believe that, if applied correctly, the Swedish solution will work here."
It is better than giving predatory banks like JP Morgan money to buy failed banks and then watch them play monopoly games.
"Sweden's restructuring agency was not an out-of-control bureaucracy; it delegated all the details of the cleanup to private bankers and managers hired by the government. The process was remarkably smooth."
"Basically, we're all Swedes now. We have used all our bullets, and the boogeyman is still coming. Let's pull out the bazooka and be done with it."
"Matthew Richardson and Nouriel Roubini, professors at New York University's Stern School of Business, contributed to the upcoming book "Restoring Financial Stability: How to Repair a Failed System."
Paul krugman writes:
Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash.
http://www.nytimes.com/2009/02/02/opinion/02krugman.html?_r=1&partner=permalink&exprod=permalink
Am I being unfair? I hope so. But right now that’s what seems to be happening.
Just to be clear, I’m not talking about the Obama administration’s plan to support jobs and output with a large, temporary rise in federal spending, which is very much the right thing to do. I’m talking, instead, about the administration’s plans for a banking system rescue — plans that are shaping up as a classic exercise in “lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.
When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp — as if it’s still 2005, Alan Greenspan is still the Maestro, and bankers are still heroes of capitalism.
“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” says Timothy Geithner, the Treasury secretary — as he prepares to put taxpayers on the hook for that system’s immense losses.
Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, “think governments make poor bank managers” — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.
And this prejudice in favor of private control, even when the government is putting up all the money, seems to be warping the administration’s response to the financial crisis.
Now, something must be done to shore up the financial system. The chaos after Lehman Brothers failed showed that letting major financial institutions collapse can be very bad for the economy’s health. And a number of major institutions are dangerously close to the edge.
So banks need more capital. In normal times, banks raise capital by selling stock to private investors, who receive a share in the bank’s ownership in return. You might think, then, that if banks currently can’t or won’t raise enough capital from private investors, the government should do what a private investor would: provide capital in return for partial ownership.
But bank stocks are worth so little these days — Citigroup and Bank of America have a combined market value of only $52 billion — that the ownership wouldn’t be partial: pumping in enough taxpayer money to make the banks sound would, in effect, turn them into publicly owned enterprises.
My response to this prospect is: so? If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found? But the Obama administration appears to be tying itself in knots to avoid this outcome.
If news reports are right, the bank rescue plan will contain two main elements: government purchases of some troubled bank assets and guarantees against losses on other assets. The guarantees would represent a big gift to bank stockholders; the purchases might not, if the price was fair — but prices would, The Financial Times reports, probably be based on “valuation models” rather than market prices, suggesting that the government would be making a big gift here, too.
And in return for what is likely to be a huge subsidy to stockholders, taxpayers will get, well, nothing.
Will there at least be limits on executive compensation, to prevent more of the rip-offs that have enraged the public? President Obama denounced Wall Street bonuses in his latest weekly address — but according to The Washington Post, “the administration is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid” because “harsh limits could discourage some firms from asking for aid.” This suggests that Mr. Obama’s tough talk is just for show.
Meanwhile, Wall Street’s culture of excess seems to have been barely dented by the crisis. “Say I’m a banker and I created $30 million. I should get a part of that,” one banker told The New York Times. And if you’re a banker and you destroyed $30 billion? Uncle Sam to the rescue!
There’s more at stake here than fairness, although that matters too. Saving the economy is going to be very expensive: that $800 billion stimulus plan is probably just a down payment, and rescuing the financial system, even if it’s done right, is going to cost hundreds of billions more. We can’t afford to squander money giving huge windfalls to banks and their executives, merely to preserve the illusion of private ownership.
http://www.nytimes.com/2009/02/02/opinion/02krugman.html?_r=1&partner=permalink&exprod=permalink
ChrisI've been having a debate with one of my Jehovah Witness Buddhist friends about the meaning of the Lotus Sutra. He's convinced of a number of things based on poor translations and a literalist read of Nichiren's writings, that are just plain wrong. In a way I should be flattered, he quotes the Gosho the way I used to quote the Gosho before I decided that Nichiren shouldn't be my only source for wisdom.
Further reading: http://lotus.nichirenshu.org/lotus/sutra/english/watson/indxwatson.htm
Now I've done a lot of things to try to explain Buddhism to non-Buddhists, and defend the Lotus Sutra to people who despise it. But it is really hard when I find at my back people who have no idea what they are talking about and seem like morons on the subject. I guess the main thing that was getting to me was that he was committing the fourteen slanders while flaming anyone who doesn't chant the daimoku as he does. Here is what Mike wrote on the subject years ago:
http://nichirenscoffeehouse.net/GohonzonShu/003C.html. If the Gakkai weren't the Seventh Day Adventists to my friends Jehovah's witness they'd invite Mike to lecture to them. It is a pretty good lecture.
This was part of the debate:
Nancy Rogow
> "How much harder is it to practice as the Lotus Sutra preaches."
I certainly can agree on that!
Mark:
>The Lotus Sutra is not an ecumenical text, period.
That kind of attribute is a matter of interpretation Mark. To me the story about the illusion of the three vehicles is explaining that all groups and people seeking enlightenment are seeking the same truth, and that it is mere egoism, and sometimes groundless arrogance, that prevents folks from seeing that there really is only one vehicle.
To folks like Dengyo Daishi the Lotus Sutra was seen as very "ecumenical," just not the kind of false ecumenicism that says "everything you say is okay! It's all equal." Because things are not. Some ideas are not the equal of other ideas. Some ideas are abusive, conveniently delusional, or misleading. Such ideas slander the Sutra. Ideas such as "you have to do things my way or you are slandering the Lotus Sutra" depend on whether or not, in fact, "my way" is superior to another person's way. Those whose "way" is not in fact superior and beneficial for all sentient beings are not practicing the Lotus Sutra for all that they claim to be practicing its text. They appear to uphold it -- but slander it.
This is not a "you are fools I'm right" kind of thing. It is entirely possible for two groups of people to be slandering each other, and in the process blocking themselves from really understanding the subject at hand -- which is enlightenment after all. Thus if a Nikkaya or a Sutta is saying the same thing as the Lotus Sutra, or helps illustrate a point -- there is no slander. But if it contradicts core truths of reality -- then there is misleading teaching going on, what gets translated as slander. And if someone takes their love for their own ideas to the point of insulting or ignoring the Lotus Sutra, that is what Nichiren primarly was referring to.
> "The Lotus Sutra neither tolerates slander nor slanderers.
Since the word used doesn't translate to "slander" or "slanderers" in good English, there are probably better terminologies for what the Japanese says. But I agree with that statement, and believe it applies to people who go around slandering practitioners of the Lotus Sutra including people who claim to be practicing the Lotus Sutra but slander others trying to do the same.
> As Nichiren says, "It is said that good medicine tastes bitter.
True enough also. Nichiren included a critique of the Buddhism of his time that was rough on all of them.
> "Similarly, this sutra dispels attachments to the five vehicles
> and establishes the one supreme teaching. It reproaches common
> mortals and censures saints, denies Mahayana and refutes
> Hinayana... All those who are repudiated persecute the believers
> in the Lotus Sutra."
It also integrates those earlier teachings, explains why those attachments aren't necessary once one grasps it, and teaches how to live sanely in this world and achieve complete and final enlightenment. It repudiates the arrogant and triumphal, and tells us that we need to respect one another's potential for Buddha and not slander each other!
> As far as diversity, maybe I didn't make myself clear or perhaps
> I was all to clear.
What you are doing with posts like the one you recently offered that contained a threat, is to slander everyone not in the Kempon Hokke, which is a way to slander the Lotus Sutra.
> The three primary colors may be mixed in such a way to make
> white or to make black.
Or they can be used to paint a beautiful image with beautiful and accurate colors illustrating a psycho-spiritual or material reality of great beauty.
However, this is not Nichiren Buddhism, this is Jodo. You are paraphrasing the Amida sutra not the Lotus. You don't know what you are talking about.
http://www.newyorkbuddhistchurch.org/documents/Dharma_Message_2003_05.pdf
"red a red light and the white ones a white light. They are marvelous and beautiful, fragrant and pure."
(Amida Sutra, translated by Hisao Inagaki)
"This is one of the famous lines of the Amida Sutra. Each lotus shines with its own color. The blue lotus does not shine with a red light, nor does the yellow lotus shine with a white light. A blue lotus shines with its own blue light, and yellow lotus shines with its own yellow light. In our world, we may want to shine with other colors."
> When they are perfectly harmonized, they make white.
Truth undifferentiated is like white light. But we can only use truth when it is turned into wisdom. Too much light can blind people, then they see black afterimages. Some of the most cynical and jaded people around have achieved partial enlightenment after which everything seemed dark by comparison. Folks who see the emptiness of all things, without seeing their connectedness, and consequences, get cynical. Folks who awaken to the truth of the emptiness of all dharmas can make great advertising mavens or really cynical sociopaths.
We need faith, practice and study to make those enlightened moments durable, to see and understand the colors. To not be blinded by realizations too big for us to handle, and to not be tempted to make what is supposed to be public private. We need the Lotus Sutra, not for personal enlightenment, but so that we can establish the "central reality" of the Ceremony in the Air as an ongoing reality of people of all sorts achieving enlightenment.
That won't happen if folks treat Nichirenism like a form of Jodo with half wits going around and slandering the Sutra by aping Nichiren's words with a moronic understanding of what he was saying that turns his teachings into a form of Pure land inspiration complete with Nichiren as Jesus/Amitabha, the Lotus Sutra as Heaven, and a fiery pit of hell waiting for deviants. Such morons do more damage to and slander the Lotus Sutra more thoroughly than any Zen, Tantra, or Theravadin teacher can. The Zen, Tantra, and Theravadin folks have quietly absorbed Nichiren's critiques so that their modern forms have some of the same drawbacks as those of his day, but are more subtle about it. Meanwhile morons go about saying moronic things and driving people away from understanding the Lotus Sutra for what it is.
> When they are clashing and in conflict, they make black.
You forget the power of the artist to make distinctions. Sometimes a dark and terrible painting makes an important point. Guernica is not about a light subject. Modern life is dark and sometimes the only accurate way to portray it is with grays and dark colors. At the same time people need hope, they need a bright place to travel too. They need the vision of the Ceremony in the Air. They need folks with the wisdom and the savvy to link them to that vision.
> When there are many bodies with one mind [of Namu Myoho renge kyo]
> we have a white world of Eternal Quiescent Light.
Again this is warmed over Amidaism.
> When there is one body with many differing thoughts, ie: Allah, Jesus, Amida, Dainichi, non-duality, emptiness, Brahma, luminous citta, Marxism, socialism, capitalism, materialism, spiritualism, we have the world we have today, a black world of strife and > conflict.
views of the same thing, that that world is on fire, and that we all need to find a vehicle that is magnificent enough so we can travel with it.
> "Nichiren might have been" this or that but he was none of those
> things, he was the Supreme Votary of the Lotus Sutra.
I wish you would get a clue as to what that really means, such as for instance actually reading the Sutra once in a while?
Further reading
http://nichirenscof feehouse. net/GohonzonShu/ 003C.html
Vilfredo Federico Damaso Pareto (IPA: [vil'fre:do pa're:to]; July 15, 1848 – August 19, 1923), or Fritz Wilfried Pareto, was an Italian industrialist, sociologist, economist, and philosopher, who developed a somewhat jaundiced view of the human enterprise[1]. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices. "His legacy as an economist was profound. Partly because of him, the field evolved from a branch of social philosophy as practiced by Adam Smith into a data intensive field of scientific research an mathematical equations. His books look more like modern economics than most other texts of that day: tables of statistics from across the world and ages, rows of integral signs and equations, intricate charts and graphs." [2] He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. He also was the first to discover that Income followed a Pareto Distribution, which is a power law probability distribution. He also contributed to the fields of sociology and mathematics.
http://en.wikipedia.org/wiki/Vilfredo_Pareto
Biography
Pareto was born of an exiled noble Genoese family in 1848 in Paris, the centre of the popular revolutions of that year. His father, Raffaele Pareto (1812–1882), was an Italian civil engineer, his mother, Marie Metenier, a French woman. Enthusiastic about the 1848 German revolution, his parents named him Fritz Wilfried, which became Vilfredo Federico upon his family's move back to Italy in 1858.[3] In his childhood, Pareto lived in a middle-class environment, receiving a high standard of education. In 1867, he earned a degree in mathematical sciences and in 1870 a doctorate in engineering from what is now the Polytechnic University of Turin. His dissertation was entitled "The Fundamental Principles of Equilibrium in Solid Bodies". His later interest in equilibrium analysis in economics and sociology can be traced back to this paper.
[edit] Civil engineer to liberal to economist
For some years after graduation, he worked as a civil engineer, first for the state-owned Italian Railway Company and later in private industry. He did not begin serious work in economics until his mid forties. He started his career a fiery liberal, besting the most ardent British liberals with his attacks on any form of government intervention in the Free market. In 1886 he became a lecturer on economics and management at the University of Florence. His stay in Florence was marked by political activity, much of it fueled by his own frustrations with government regulators. In 1889, after the death of his parents, Pareto changed his lifestyle, quitting his job and marrying a Russian, Alessandrina Bakunin. She later left him for a young servant.
[edit] Economics and sociology
In 1893, he was appointed a lecturer in economics at the University of Lausanne in Switzerland where he remained for the rest of his life. In 1906, he made the famous observation that twenty percent of the population owned eighty percent of the property in Italy, later generalised by Joseph M. Juran into the Pareto principle (also termed the 80-20 rule). In one of his books published in 1909 he showed the Pareto distribution of how wealth is distributed, he believed "through any human society, in any age, or country"[4]. Later in life He began writing numerous polemical articles against the government, which caused him much trouble. His observations about the Pareto Distribution had changed him from an ardent free enterprise apologist to somewhat of a socialist, and after his death a champion of Italian and other fascists.[5]
He also remarried. He died in Geneva, Switzerland, August 19, 1923, "among a menagerie of cats that he and his french lover kept" in their villa; "the local divorce laws prevented him from divorcing his wife and remarrying until just a few months before his death."[6]
[edit] Fascism and power distribution
Benoit Mandelbrot writes:
"One of Pareto's equations achieved special prominence, and controversy. He was fascinated by problems of power and wealth. How do people get it? How is it distributed around society? How do those who have it use it? How is it distributed around society? How do those who have it use it? The gulf between rich and poor has always been part of the human condition, but Pareto resolved to measure it. He gathered reams of data on wealth and income through different centuries, through different countries: the tax records of Basel, Switzerland, from 1454 and from Augsburg, Germany in 1471, 1498 and 1512; contemporary rental income from Paris; personal income from Britain, Prussia, Saxony, Ireland, Italy, Peru. What he found -- or thought he found -- was striking. When he plotted the data on graph paper, with income on one axis, and number of people with that income on the other, he saw the same picture nearly everywhere in every era. Society was not a "social pyramid" with the proportion of rich to poor sloping gently from one class to the next. Instead it was more of a "social arrow" -- very fat on the bottom where the mass of men live, and very thin at the top where sit the wealthy elite. Nor was this effect by chance; the data did not remotely fit a bell curve, as one would expect if wealth were distributed randomly. "It is a social law," he wrote: something "in the nature of man."[7]
Pareto's discovery that Power laws applied to income distribution embroiled him in political change and the nascent fascist movement, whether he really sided with them or not. Fascists such as Mussolini found inspiration for their own economic ideas in his discoveries. He had discovered something that was harsh and Darwinian, in Pareto's view. And this fueled both the anger and the energy of the Fascist movement because it fueled their economic and social views. He wrote that, as Mandelbrot summarizes:
"At the bottom of the Wealth curve, he wrote, Men and Women starve and children die young. In the broad middle of the curve all is turmoil and motion: people rising and falling, climbing by talent or luck and falling by alcoholism, tuberculosis and other kinds of unfitness. At the very top sit the elite of the elite, who control wealth and power for a time -- until they are unseated through revolution or upheaval by a new aristocratic class. There is no progress in human history. Democracy is a fraud. Human nature is primitive, emotional, unyielding. The smarter, abler, stronger, and shrewder take the lion's share. The weak starve, lest society become degenerate: One can, Pareto wrote, 'compare the social body to the human body, which will promptly perish if prevented from eliminating toxins.' Inflammatory stuff -- and it burned Pareto's reputation."[8]
Vilfredo had argued that democracy was an illusion and that a ruling class always emerged and enriched itself, for him, the key question was how actively the rulers ruled. For this reason he called for a drastic reduction of the state and welcomed Mussolini's rule as a transition to this minimal state so as to liberate the "pure" economic forces.[9]
He had calculated a power curve and an alpha of 3/2 for the slope of that line. And he thought from the measures and his calculations that he'd found an "iron law" though in reality he'd discovered something more prosaic. People since then have gone back and recalculated the slope, found it varied from place to place and time to time, and should be closer to 2. [10]
To quote Pareto's biographer:
"In the first years of his rule Mussolini literally executed the policy prescribed by Pareto, destroying political liberalism, but at the same time largely replacing state management of private enterprise, diminishing taxes on property, favoring industrial development, imposing a religious education in dogmas".[11]
Karl Popper called him the "Theoretician of Totalitarianism."[12]
Pareto was sympathetic to Benito Mussolini, largely because Mussolini claimed to be championing ideas congruent to the ones he had just expressed and Mussolini had admired his ideas. He accepted a "royal" nomination to the Italian senate from his admirer, Mussolini. We will never know if he truly was a supporter of Fascism because he died less than a year into the new regime's existence. However, on being sent an anti-Semitic book, Pareto's reply indicated no repulsion for it.[13]
The fascist writers were much enamoured of Pareto, writing paeans such as the following of his:
"Just as the weaknesses of the flesh delayed, but could not prevent, the triumph of Saint Augustine, so a rationalistic vocation retarded but did not impede the flowering of the mysticism of Pareto. For that reason, Fascism, having become victorious, extolled him in life, and glorifies his memory, like that of a confessor of its faith."[14]
But the truth is he'd simply quantified an observation of the human condition. In most societies a few people are outrageously rich, a small number very rich, most people in the middle or poor.
http://en.wikipedia.org/wiki/Vilfredo_Pareto
To have functional markets similar principles have to be present in companies that ought to be present in the US Government.
1. Accountability of officers to elected representatives.
2. Accountability of officers to their constituents (Stockholders).
3. A Judicial function for decision making with pro and con parties debating under the rules of order of a neutral Judge, and with an audience with decision power. In the case of companies that audience should be the stockholders, and the neutral power an Officer with oversight functions. It used to be chairman of the board. Somebody new is probably needed.
4. Separation of powers:
4a: A treasurer should actually disburse money.
4b: Investment advice and decisions should be subject to review by the person controlling the money who should be independent of the person making the investment decisions.
-- Both should be held liable for dilatory outcomes.
There should be defined officers, each independent of a hierarchy and with defined powers, access and a requirement for transparency backed up by sanctions for non-compliance. Auditors should be outside and in completely independent companies. Deposits should be controlled by one bank, investments by another, and both responsible for sanity on the other.
To have a functional economy requires that we understand a few things.
1. Economy is an extension of the household. The term originally referred to running a household. Economies are systems that interface all the participants in them so that each can participate and maximize his or her own gain.
2. The market place has always been a place where people could go to buy and sell goods. A free market is at root simply a place where all the people in a society are able to participate on an equal basis.
3. There is no free market without functional laws, lawfulness, and a measure of justice. A perfectly just society can support a free market. An unjust or chaotic society cannot. Laissez faire when applied to mean that there should be no rule of law in a market is a con.
4. Therefore the idea that "Government" should not be involved in markets is also a lie. Without functional Governments governing the weights and measures, the transparency and rules, the justness and equity of transactions, markets revert to their lawless historical roots as itinerate carnivals that travel from area to area in order to bilk the masses. A lawless market is a jungle, is a place where people get bilked out of their money -- it is not a free market. A free market is free in the same way that people living under a common law in a commonwealth with elected officials and deputies are free -- because we are all free under equal protection of the law we can participate safely in markets.
5. The notion that Government doesn't create money is also a lie. Markets function best with a medium of exchange, whether it is "wampum" or "Gold", or Paper script, that money only gets its value from the same authority that establishes uniform weights and measures and prevents the weak from being sold as slaves (or for dinner). Our money is printed by the Government. Money is a medium of exchange, it's whole value comes from the value of society as a whole. Money loses its value when Government loses its attributes of justice, liberty, and equality. The biggest con of all is when "moneyed powers" get their hands on things that aren't there simply because they were able to delegate to themselves the ability to print money -- and then acquire title to other people's property.
6. The idea that Government can't create anything is also a lie. Whether the government is a group of investors who get together to invest in a shopping mall, or a store, or a more official type of Government, only Governments can produce free markets because only governments can establish lawful places where people can gather (literally or by proxy) and exchange things legally, safely and surely. Only Government can provide the police, gendarmes, officials to check the weights and measures, etc... to produce free markets. Government is not a concrete entity but a function. Governments are any group of people who take on that function. When businessmen want the Government to get out of the way it is because they want to govern things themselves, not replace government with chaos.
7. To have what Adam Smith talked about you have to have many players, open markets, and good laws. If you start to get down to less than 10 players you no longer have free markets, you have "monopolistic competition" which is usually nasty business.
8. Financial markets are never stable free markets with or without Government unless very strictly limited. In the Middle ages, financial markets were conducted in traveling fairs (carnivals) and these were self-governing groups dedicated to parting people from their money. The King would invite them in when he needed money and usually drive them out when they found a way to bankrupt the State. Often times they'd enrich themselves by helping the King become an autarch. They started to settle when wars got to be long term things needing long term financing. They did not become "free markets" ever, (free for all maybe), they've always been true to their roots as playpens of aristocrats and Carnies. What is happening now is nothing new. It has happened every 20 years or so going back to the beginning of the modern era. The more money available to markets, the more the temptation of the "Carnies" to gamble on it. They can't resist themselves.
Chris