Saturday, December 17, 2011

December Ramblings

It's been a little quiet here of late, I have relocated from Berlin to Sydney which has engaged my attention but I am starting to feel a little more settled. It's great to be back with familiar faces and places after a few years out in the wilderness.

I have enrolled in a postgraduate Math/Statistics degree which I am very much looking forward to. It starts next year so I have been revising my undergraduate math material and slowly making my way through the free Stanford Machine Learning course material which I have been finding excellent.

I have still been testing out ideas but most have been dead ends, so not much to report there. Instead I would like to get on my soapbox on two things, the strange contradiction in some of those who self describe as "fiscally conservative", and a general rumination on democracy and efficiency.

Not so conservative

I don't really get how one can say they are fiscally conservative yet in the same breath advocate lower taxes. If you sit down and think about it, surely the conservative view would be to gather as much tax revenue as one could. I don't think many private sector accountants would advocate limiting ones revenue sources.

I'm not really for super high taxes (say >= 55%), but very low taxes (<= 30%) seem like a bad idea. Public services cost money to run, and society as a whole benefits from good infrastructure, health care and education system. An exception might be Switzerland, but after living there for a while, yes on the face of it taxes are low, but everything else is expensive. There are a lot of compulsory things like insurance, licenses for this and that, so you end up paying anyway. This in turn stratifies society as only those relatively wealthy can take up the benefits of life in a modern western society.

There are a bunch of countries with very high taxes but they are mostly well managed and great places to live, better than the US by pretty much any quantifiable metric. I remain a great fan of Sweden which to my mind has struck a good balance between social policy and equality while remaining a fundamentally capitalist economy.

Democracy and the worst case

People discuss the inefficiencies and weaknesses of democracy, as if they would magically disappear under some other system, or that private enterprise is some beacon of expediency and should be a model aspired to by governments.

From what I have seen large private enterprises are very bureaucratic and stifling, and I think no worse than your favourite government department. The difference is that public institutions have the light of transparency shining down on them, whilst private institutions remain just that, private, so the waste and inefficiency is largely unexposed.

It is very hard to get things done in a large organisation, and to an extent I believe that to be by design. It is a safety mechanism against the worst case scenarios. For sure opportunities may be missed due to inefficient processes, but not all ideas are good, and long, drawn out approval processes also kill bad ideas that may result in taking a company down. There are exceptions but as a generalisation I think there is a degree of truth to it.

When people glorify private enterprises as a model of efficacy and efficiency, they presuppose the aim of an organisation is to reach some optimal maximum, i.e. attaining the best case. And though I agree it is important to strive for good results and outcomes, for large organisations I think it is more important to ensure worst case outcomes never eventuate (I'm sure we can all think of examples.)

While I was in Europe I had the opportunity to visit Auschwitz in Poland, one of the most infamous concentration camps of WW2 pictured above. There is a train line that runs right up to the entrance of the gas chambers used to murder of millions of people over the course of the war. The powers of the time clearly thought this was a great idea.

There are many problems with democratic political systems, and it is true they will never likely reach some optimal best case. We have to accept that most of the time we probably wont achieve the best case, but at the least we avoid the worst case. History shows us the worst case can get very nasty, so all in all I think it's a reasonable trade off.

Hope you and your families all enjoy Christmas and the holiday season.

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