Constitutional Crisis? Wealth concentration and Distributism; Planetary Defense

Wednesday, August 2, 2017

Being intelligent is not a felony. But most societies evaluate it as at least a misdemeanor.

-Robert A. Heinlein

The map is not the territory.

Alfred Korzybski

“The wealth of our middle class has been ripped from their homes and then redistributed across the entire world.”

Donald Trump

Between 1965 and 2011, the official poverty rate was essentially flat, while the government spending per person on poverty programs rose by more than 900% after inflation.

Peter Cove

John Glenn must surely have wondered, as all the astronauts weathered into geezers, how a great nation grew so impoverished in spirit.

Our heroes are old and stooped and wizened, but they are the only giants we have. Today, when we talk about Americans boldly going where no man has gone before, we mean the ladies’ bathroom. Progress.

Mark Steyn

Liberalism is a philosophy of consolation for the West as it commits suicide.

James Burnham

[For homosexuals] Death is the sentence. We know there’s nothing to be embarrassed about this. Death is the sentence.

Imam Farrokh Sekaleshfar in an address at Hussein Islamic Center, Orlando. Florida, 2013

We are a nation of assimilated immigrants.

Immigration without assimilation is invasion.

We have to start with the premise that the goal is to defeat the enemy.

Jim Woolsey


It’s breaking news, so no valid comments are possible, but it is my understanding that the so called Republicans have passed a sanctions bill penalizing Russia: and forbidding the President from rescinding any of them without consent of Congress. The rumor is that President Trump will sign it. That is such a bad action that whoever advised it ought to be fired, and the Congresscritter who proposed it marked for primary opposition at the next election. It is an attempt to break down the separation of powers in the Constitution, and deliver control of foreign policy over Russia to Congress, relieving the President of that responsibility. Of course there are stories of how the President wanted that, but the sources are, as is traditional with today’s journalists, anonymous.

I know no more than that. I hope it’s all made up. But if Mr. Trump signs anything like that, it’s a big mistake.



My Apologies: my posts are answered with a message saying inappropriate response by server.  I got use to that happening at midnight but it’s happening now.  Worse, while this is posted, the formatting is wrong, and I’ve no choice but to try to fix it. And every time I do it sends a message to the world about the new post, although I thought we had that tamed down; and when it is sending the appropriate response it never sends another unless considerable time has passed.  I can hope all this will fix itself.  I am not spamming you with “he posted” messages, something is broken. It will I am sure be fixed. Apologies.



You might find “The CEO Pay Machine” by Steven Clifford worth your time, and the Wall Street Journal review by Phillip Delves Broughton in yesterday’s Wall St. Journal even more so. It was entitled “Excess at the top” which implies a point of view, and after reading the review – if you can find it, it seems to have vanished from the Internet – you will have much to think about. Of course we don’t so much need educating as reminding; we all know about executive compensation going wild. But it never hurts to contemplate the matter.




A Better Way to Reward CEOs

Many companies are led by chief executives whose contribution to profit may be minuscule but whose compensation is astronomical. Philip Delves Broughton reviews ‘The CEO Pay Machine’ by Steven Clifford.

In 1978 the average chief executive at a large company was paid 26 times more than the average worker. By 2014, depending on your method of calculation, he was paid 300 to 700 times more. It has become standard for a CEO to make more than $10 million a year, and a few make more than $100 million. These aren’t founders or major shareholders but hired guns, managers playing with house money.

It is not like this everywhere. In the U.K., the fifth largest economy in the world, the pay ratio of CEO to average worker is 84 to 1. In Japan, the third largest, it’s 16 to 1.

So what happened in America that so much is now lavished on the executive class? And does it matter? To the second question Steven Clifford, a former chief executive at King Broadcasting and now the author of “The CEO Pay Machine,” responds with an emphatic “yes.” The outsize income, he thinks, feeds inequality and mistrust in our democracy. In response to the first question he argues that a system of compensation has emerged over the past four decades that rewards mediocre executives by stiffing shareholders, employees and society at large.

The CEO “pay machine” works like this: When a chief executive is hired, a company will also hire one of a handful of compensation consultants to establish a benchmark for his pay. The consultant will look at a bunch of companies in different industries and then propose that the CEO be paid at the 75th percentile. (No company wants to think it is paying its CEO at the 25th percentile.) The consultant is out to please the future CEO, since the real money will come if he is hired to design the company’s pension or health-care plans. Charlie Munger, Warren Buffett’s business partner, once said that he would “rather throw a viper down my shirtfront than hire a compensation consultant.”

But salary is just the beginning. Next come the short- and long-term incentive plans. Short-term plans contain bonuses for meeting annual targets or for simply accomplishing the tasks one expects of a senior manager. In 2014 Les Moonves, the CEO of CBS, received a cash bonus of $25 million. Roughly half of that was reportedly paid to recognize Mr. Moonves’s “leadership and direction in the creation of premium content.” In other words, doing his job. [snip]

Now I am not for confiscation of other people’s money, particularly if the confiscated funds go into the money available for the confiscators to spend – the incentives are horrible – but I do have some objection to great concentrations of wealth in the hands of those who didn’t earn that wealth. I don’t feel menaced by Bill Gates or Warren Buffet, but the great wealth of new rich is disturbing; is it stabilizing?

[snip] The marvelous thing about bonuses at this level, Mr. Clifford notes, is that they aren’t binary. If you fail to meet your targets, you don’t lose your bonus; you just get less of it. If you have a $1 million bonus target, chances are that the board will shave maybe 10% off if you underperform. And $900,000 for failure isn’t bad. Of course, there are also long-term incentives: the stock options and the restricted stock that vests over time. [snip]

It’s enough to encourage Distributism: some wealth is confiscated, but then distributed so widely that there isn’t all that much incentive to take more. The spending power is not given to politicians, nor does any one person or family get so much that there is much incentive about doing it again. The purpose is not to “soak the rich”, but to ameliorate some of the ills of concentration of wealth and power. Perhaps a foolish notion; yet we did get along without executive salaries in the tens of millions of dollars for a considerable time, and it likely did us good.


An essay from the past that most of you may not have seen.

Trouble with Marx

My memory fails, and I forgot the name of my favorite economist. I racked my brain to no result. I have his books upstairs, but while going up is easy, coming back down is not, and coming down carrying things is worse. Then I remembered his book, “The trouble with Marx”. The economist I had in mind was David McCord Wright.

I also remembered I had written about Wright’s observation that Marx was correct in some of his projections, and I had written about that, so I googled The Trouble with Marx Pournelle, which took me to an odd page: it was a serious discussion of Marx and Marxism from a long time ago. Much of it appeared in my journal at one time, including letters to me (which had full credit to the authors but there was no mention of me, my journal, or the original source.

The question of concentration of wealth arises again. Wright devoted some time in his book to Marx’s predictions about concentration of wealth under Capitalism, and speculated that one thing that had served the United States well was the Sherman Anti-Trust Act, and vigorous enforcement under trust busting presidents.

Marx was a founder of the Communist International, and he did have some ideas about “the specter” that was haunting Europe. As you say he was cheering for one side in the ‘class war’, and it’s often hard to separate that from his economic analysis.

Some of his analysis is plain silly, like the “labor theory of value’. Fortunately that’s not required for his major analytical thought, because if it were a necessary assumption then Marx’s thought would be as unread as pre-Lavoisier theories of oxidation. In fact, though, the ‘labor theory of value’ was part of what you rightly call cheering, and unrelated to any objective analysis.

Marx did not understand production, and particularly had no notion of the power of technology. He thought anyone could operate the “tools” and “means of production” and that the control and ownership of the power plants and big machine tools was terribly important. That’s to some extent what misled Stalin and Mao, of course. They ought to have known better. Marx wasn’t imaginative enough to see that the Industrial Revolution wouldn’t stop with massive centralized machine shops (made necessary because energy distribution was difficult and expensive); but Stalin and Mao ought to have known that there was a Second Industrial Revolution characterized by the hand-carried quarter inch electric drill that made distributed production possible. Now we have the Third brought on by the small computer and once again all is changed. Marx foresaw none of this, and his economic analysis is based on a very obsolete theory of industrial production.

As in the computer business, hardware often trumps software. Ownership of the means of production is no longer an automatic key to wealth, nor is it all that hard to acquire the means of production. Particularly in the computer/intellectual property field, the means of production are available to almost anyone.

So much for the fundamental flaws in Marx.

Even so, Marx was certainly influential among German economic theorists, and through them Asian including Japanese; Karl Wittfogel being one of the more important. Wittfogel almost single-handedly converted an entire generation of Japanese economists to Marxism, which meant Communism, until his break with the Party over the Hitler/Stalin Pact. He later used his great familiarity with Marx’s theories to see a major contradiction in them.

One of the major attractions of Communism was being on the inevitably winning side. Communism claimed to be scientific, and its adherents were marching in step with the flywheel of history. That’s a powerfully attractive argument to some. It was for me in my early twenties. It seemed to prove something.

But in Oriental Despotism, Wittfogel pointed out that Marx himself was horrified to see a contradiction: that state capitalism, modeled after the old hydraulic societies (Egypt, Babylon, etc.) could be eternal, not evolving, because it had no internal contradictions as Marx claimed everything except the classless society would have. Marx called this “the Asiatic Mode of Production” and was intellectually honest enough to leave the speculation in Das Kapital, but not honest enough to pursue the implications: that there could be eternal states, never changing much, never evolving, with utterly despotic governments. Such states are vulnerable, but ONLY to OUTSIDE pressures; as an example, the Great Mogul Empire lasted until a handful of Europeans pushed it over. Wittfogel also showed that the USSR was very nearly such an Oriental Despotism, and that China always was one: it was when it ceased to be such under Sun Yat Sen that it became vulnerable, and Sun Yat Sen was able to bring about partial revolution in China only with outside help.

Wittfogel is important to understanding Marx because he took Marx seriously and dealt with Marx’s arguments. David McCord Wright does much the same. His book “The Trouble With Marx” was originally a scholarly work much unread, and because of that was something of a failure as a Conservative Book Club selection since many buyers through that club didn’t know what to make of an economist who took Marx seriously as an economic theorist: they were looking for an anti-Communist tract.

Lester Thurow of MIT sometimes takes Marx seriously, but not often. He is a great lecturer, and it’s always worthwhile listening to him, but his analyses tend to be trendy and topical; I am not sure I have heard much from or about him since Hillary Clinton’s attempt to “reform” American health care, a subject about which Thurow knows more than most, although I strongly question his assumptions.

Wright believed that the American anti-trust laws were the major defense against the kind of destruction that pure capitalism can bring. And of course Schumpeter looked into the face of the capitalist abyss and withdrew in horror.

One attempt to mitigate the effects of unrelieved capitalism is economic nationalism, as well as local control of institutions. By local control, I mean using zoning laws to prevent WalMart from coming in and displacing all the local merchants. I won’t get into the desirability for a local community of placing large barriers in the way of WalMart; I do question the sanity of national laws that prevent the local community from having a say in the matter.

Similarly for economic nationalism: while a global economy is inevitable in the long run, as Keynes said, in the long run we are all dead; what matters are the living; and a nation that allows a skilled worker with 25 years investment in a particular company to suddenly be put on the street while his job is exported to a foreign country may well enjoy cheap jockey shorts, but may also have created a disaffected class from among those formerly the most patriotic. “For a man to love his country, his country ought to be lovely,” said Burke; and a country that is more concerned with cheap goods than the employment stability of its work force, and which goes out of its way to make it easy to export jobs, may be in trouble.

Couple that with an education system almost guaranteed to produce many graduates with no skills whatever and not even the learning skills of acquiring skills, so that they must now compete for menial jobs not merely with local menials but with the entire world including a single mother in Thailand, and you have an even more interesting situation. It is an experiment I would not care to have run, but we are running it here.

A world economy is probably inevitable in the long run, but I am not convinced that marching in step with the flywheel of history is always the right idea; and I am certain that Marx had some deep insights into what unrestrained capitalism can and will do.

I always thought David McCord Wright and Wilhelm Roepke to be economic theorists worthy of far more attention than they receive, because I always thought one ought to, and Schumpeter and those two did, take Marx quite seriously.

State capitalism is every whit as able to pave the road to serfdom as is communism. One may say it won’t happen here, but the one who says that isn’t reading newspapers.

All of which points us back to Roepke’s Humane Economy; and I am out of time just now.


Planetary Defense


Nice remarks about the Tunguska meteorite, and I love the National Science Foundation connection, as it is my former employer. If you don’t know this project:

It’s interesting, because it will survey the whole sky every couple of weeks. When I worked at NSF, I happened to be at an early review of this project, which was sort of a walk through of the work before it was presented to the National Science Board (NSB) for approval. All big NSF projects go through this, and the preliminary step is the “Director’s Review Board” (DRB), which is basically for the NSF Director and his closest advisors to listen for red flags before it goes to the NSB for final approval.

I was at the meeting because I had a project headed along the same trajectory, but I listened to the LSST briefing closely, and they stated something like “It will see and update the position of every magnitude 13 object every two weeks.” (I don’t remember the exact magnitude). And that was an interesting statement, so I broke protocol, raised my hand and asked,

“Given the albedo of a typical asteroid, what size asteroid does this mean that LSST can detect?” That comment caused a stir, for two reasons: (1) Lowly Program Officers do NOT ask questions at a DRB meeting, and (2) the reaction in the room clearly showed that a lot of people thought it was a good question!

The LSST presenters sort of huddled over this question for a few moments and came back with a rough answer: LSST should be able to detect a rock about the size of the Arizona Meteor Crater event. So, LSST won’t give us a warning on everything, but it IS an early warning system for civilization enders, and in fact, for most things Hiroshima-scale or larger.

And that’s nice to have, and a good first step. Of course, if we detect a civilization ender, we still lack the capacity to DO anything about it, but presumably an early warning would be extremely motivating.

The LSST web page now talks about the planetary defense benefits of the project. I can’t take credit, but I’ll say this: I asked that question, sometime around 2010, because there was nothing like that listed in the benefits of the project.

And I think it’s a great example of how you never know how basic research will pay off.




Microsoft Outlook

Dr. Pournelle,

    I understand your issues with Outlook. I’ve been supporting the product for five years, or I was until I had to stand on the dock waving goodbye as my job set sail for India. Before that I worked several jobs where I used it for daily communication. I remember my first look at 2007, I think, where the menus went away and were replaced with the”ribbon.” Everything that was hidden in the menus, is now hidden in plain sight. All that was easy, is now not.

    I have yet to play with 365. A) Being  unemployed, I can’t afford it. B) Being principled, I wouldn’t afford it. Note: That being principled bit was not taking a shot at those who pay for it. I just have a deep-seated aversion to paying for software. Being inconsistent, however, I’m sitting here at a Windows machine righting this, because I paid good money for the machine and am not facile enough with Linux to function in it one hundred percent of the time. In my head, I didn’t pay for Windows, I paid for the hardware.

    Want to have some fun? Try importing your Windows pst files to Mac. That can be done, but the formats for the two operating systems were totally different, and the process not easy. Also, bringing them back to Windows is nigh impossible. Of course, being a major corporation, they had left Windows XP in 2012 for Windows 7, just after Microsoft had ended support for it. If anyone remembers, Windows XP was released in 2000. So we were using Office 2010 on Windows and 2011 on Mac. It may have gotten easier since then, but I doubt it.

    In response to your comments about Microsoft having forgotten the normal user, the little guy, as it were. Is that not just a symptom of our society as it stands today. We’re forgotten, unless we gather en masse. Gather, and pull out the torches and pitchforks, ie. Tea Party. I guess, what I’m getting at is that you won’t get any notice if you don’t have a million or two to drop on the table. That’s the way we’ve been slipping for years. The only thing that really disappoints me however is that they’re trying to make it harder to join the club. Comments about which, I believe I’ve seen here.

    I digress. Back to Outlook. I’m using an Open Source mail client. I’m not totally enamored of it, but it’s free, and it’s almost as pretty as Outlook. I do miss some of the features of Outlook, especially the archiving and contact management. I’ve yet to find an Open Source substitute that handles those as well, but I’m still looking.

    Oh, well. What is one to do? As I’ve heard a wise man say, repeatedly, “Despair is a sin.” I guess I’ll keep my head up, and soldier on.

Atrox melior dulcissima veritas mendaciis,

Douglas Knapp


Word autocomplete, Christopher Chyba

Hi Jerry:

I don’t use Word 365, but in all the newer versions of Word (2010, 2013, 2016) all of the detailed settings are accessed through the File tab, then Options, then Advanced.  There is a checkbox in the “Editing options” category for “Show Autocomplete suggestions”.

On another note, you might be familiar with the Google feature called  “Scholar.”  Many years ago it was on the main page of features, but it is now buried way far down (unless you use it frequently, in which case it will move further up in the menu hierarchy).  From a Google search page, you have to click on the “Google Apps” icon, then the “More” button, then the “Even more from Google” button.  Scrolling to the bottom of that page you’ll see an array of icons, arranged in alphabetical order.  Look for the one labeled “Scholar.”  Finally you have to click on the “Search Scholar” button.

A Scholar search on Chyba Tunguska yields

The paper in question might be this one (published in Nature):

The co-authors were PJ Thomas and KJ Zahnle.

Hope this helps.

Best regards,

Doug Ely

Thank you. Yes, the options menu is where I find editing – not under proofing where I looked, but under advanced. Alas, it does no good. On all of my machines the “Show autocomplete options” box is checked; but on one – and only one – of my machines, the autocomplete options do not appear. I even tried unchecking it, exiting Word, then opening Word and rechecking. Nope. Then leaving it checked I used power options to turn the machine off, then turned it back on. It seemed to have no updates to offer. Autocomplete did not work, I’m tempted to say of course. The next step I suppose is to see if I can uninstall then reinstall Word, but as everything else is working and it is such a minor problem, I probably won’t. since I have other work that is more important.

Thanks for reminding me if the Scholar option; I eventually found Christopher Chyba, but only by remembering his name; no first page returns to Google of Tunguska even suggested that anyone of that name exists, much less says that he pretty well settled the “mystery”. It is I suppose more exciting to fill the returns with articles about “we don’t know” and “it’s a mighty mystery.” Which means that using that for anything like meaningful research is absurd: we have a consensus on climate change, supposedly, and you have to hunt to find that there are serious doubts from people usually labeled Deniers and thought by most Believers to be fools or mendicants; whereas with Tunguska there really is a pretty wide consensus that Chyba figured out a model that pretty well cover the known evidence, and while there are a few who don’t agree even they say he’s reasonable; but the first page returns on Tunguska still emphasize “mystery” and “we don’t really know” – something they’d never say about our understanding of climate change. Disappointing.




Freedom is not free. Free men are not equal. Equal men are not free.




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