Chesterton’s Schoolhouse

Peeps in my Twitter feed sometimes talk about homeschooling their future offspring. I get it, public schools are awful – the kids are bullies, the teachers incompetent, and the curriculum is hogwash bathed in whatever leftist ideology happens to be in vogue. Public schools turn children into brainwashed drones.

But then… I remember a time when people used to be voluntarily indoctrinated en masse. Back when it was normal to put on your Sunday clothes and sit on a bench while receiving sermons in fictional stories. It seems like there was some value to having everyone congregate once a week, act polite to those of different economic backgrounds, maybe even feign an interest in others’ lives.

If nothing else, religion created a common fear of some paranormal force. That’s nothing to laugh at — the Roman banks began in temples consecrated to the ancient gods. Shared truths keep a community together, even if they’re not founded in fact. Buuuut these particular truths were oppressive to alternative lifestyles, and now they’re all but dead.

Another oppressive institution that no longer exists: Conscription. People used to be acutely aware of every war because they or their kids or the neighbors’ kids could all get drafted for service. Now that we’ve moved to an all-volunteer military force, the country is blissfully unaware that we’re fighting ongoing wars in seven different countries. I mean, the kids from Appalachia and flyover states are fighting those wars, and probably they know a thing or two about Libya and Yemen. The rest of us stay home and focus on more important things like Equality.

Nixon ended the draft in 1973 to get the hippies to stop protesting Vietnam. It worked, but… maybe it was better to have the entire population aware of ongoing warfare?

Another thing: I lived in Los Angeles during the 1992 riots, when the city basically turned into a warzone. It was too much for LAPD, so the cops moved to strategic containment and let the inner city have at it.

That’s when the Rooftop Koreans appeared. They were recent immigrants in South Central LA, left high and dry to defend their shops and homes.

The Roof Koreans didn’t just hop onto buildings on a whim. South Korea has mandatory military service along with annual training for young adult males. Given proximity to North Korea, they take military preparedness quite seriously. When all hell broke loose, these ex-Armed Forces guys knew how to grab their guns, face the front line, and coordinate a defense.

That’s a valuable life skill! Second Amendment advocates insist that the right to bear arms will protect against government tyranny, but 90% of the country doesn’t even know what to do with one of these things. We’re still trying to figure out how to get the chainsaw attachment to go on the assault rifle. Which end up? The rooftops will be sparsely populated, is what I’m trying to say.

Public schools suck, but maybe there are some overlooked skills that can only be provided by a public school education. I just did a search and found a list of things that kids learn in kindergarten. The first two are “Share everything” and “Play fair”. There are valid societal reasons why it might be good to have children brainwashed with these ideas, yet these are things that will definitely be lost in a homeschool based on Ayn Randian Objectivism.

Maybe I’m out of the loop and the exodus already happened, and anyone who still attends public school is like the last person in a coal mining town. In the future, everyone will live in their own community of One.

Law is Money

In 2011, acclaimed blogger Paul Krugman proposed that an alien invasion could save the economy, because death and destruction create jobs.

Now, what if — what if! — space aliens wanted to enslave the population, but without the massive disregard for human life? Instead of bombing us into prosperity, the aliens could lasso up a few gold-laden asteroids and buy our instant servility.

(This would probably be more effective if the aliens used a time machine to show up before the end of Bretton Woods. They’re aliens, they can do that.)

So the arrival of golden asteroids might bring an instant increase in metallic wealth, but we humans now find ourselves trapped in a horribly corrupt monetary system, where alien overlords have access to an infinite amount of gold, and as long as people rely on gold as currency, we’ll forever be their serfs. Now what?

This is happening right now in China, Russia, Iran, Venezuela and every other country facing US sanctions. Most countries keep their foreign reserves in dollars (or dollar-denominated debt). The “dollars” are actually database entries at Federal Reserve Banks, and assets can be frozen at will. We already did that to Iran! Not your database, not your dollars.

USD used to feel like a reliable store of wealth, when really it was an infinite line of credit subjugating the rest of the world to US foreign policy. Heck, even the Bank of England wants out of US dollar hegemony.

China currently has $1.1 trillion in Treasury bills. They would prefer to HODL something else, but there aren’t a lot of options. The Eurozone restricted bond issuance with austerity measures, and you can’t just buy $1.1T worth of bitcoin. Few countries accrue external debt the way the US accrues debt – that’s American exceptionalism!

It’s hard to dump one asset for another, unless there is enough liquidity to absorb the dump. In the absence of a new bottomless asset, specific cycles must be broken.

(Specific cycles, meaning the closed payment loops in which a currency circulates.)

Europe has no beef with Iran. In fact they are quite fond of Iranian oil. But with Iran blocked off from the international payments system, European banks had to create a non-USD clearinghouse called Instex. The participants technically don’t violate sanctions, because transactions get netted and batched so that money doesn’t cross Iranian borders.

Russian banks joined China’s cross-border network, which clears and settles in yuan. But Russians don’t trust China, so importers turn to Tether, and even Bitcoin.

Sanctions break specific cycles while creating a flywheel effect for whatever currency enables the transactions to continue. This isn’t limited to international trade; domestic chokepoints keep alternatives circulating too.

Bitcoin is for enemies, and Lightning is its clearinghouse. The inability to issue debt makes it difficult to displace fiat as a medium of exchange — but once it does, it will be near impossible to stop.

Sound Money

During times of volatility, Bitcoin hodlers like to repeat the meme that 1 BTC = 1 BTC. The tautology serves as a reminder that Bitcoin has a finite supply, and once someone has accumulated a fraction of outstanding bitcoin-denominated wealth, that status will never be diluted.

Ideally we live forever in immutable luxury, but that’s unattainable for most. In the absence of immortality, the next-most extropian thing to do is transfer socioeconomic status to the next generation.

What’s the best way to bequeath status? Elite universities were originally created to preserve the aristocracy. In the early days, an esoteric exam was used as a proxy for family background, because only the wealthy could afford a prep school education. (Here are Harvard’s old entrance exams. Anyone who could pass was admitted.)

The growth of public high schools democratized exam knowledge, so today universities employ “holistic” admissions criteria to determine who belongs in the upper crust. Legacy applicants still receive extra consideration because the entire purpose of college is to provide a means of intergenerational status transfer. Universities can’t come right out and say that, of course, because then they would lose their tax-exempt status.

Besides, institutionalized inequality only works if you convince the underclass to play along. People are generally willing to accept a loser lot in life if they believe their kids have a shot at something better — that’s why highly educated immigrants come here to be cab drivers. The US is so good at convincing people of its meritocracy that even the homeless see themselves as temporarily embarrassed millionaires.

Nocoiners point to Bitcoin’s finite supply as evidence of institutionalized inequality. There’s no inflation to accommodate newcomers or economic growth, so the HODLers will HODL their way to prosperity while everyone else stays poor!

Sadly, Bitcoiners are but mere mortals, and at some point they will need to buy food and shelter. Worse yet, they may procreate, and reproduction is pretty much the greatest destroyer of socioeconomic status. Assuming more than one offspring, each member of a successive generation ends up with a fraction of the parents’ wealth. Unless the kids find a way to augment their HODLings, they’ll eventually descend into poverty.

If you want to increase your wealth, you can either (1) create something of value to others; or (2) convince people that your assets are worth more than they already are.

The second option is easier than the first — that’s where fiat comes in. A dollar is always worth a dollar, but the most useful feature of the dollar is that banks can make certain things worth *more dollars* by pointing and lending. Make it easy for homeowners to borrow money, and housing prices will go up. Make it easy for students to borrow money, and tuition costs will go up. Make it easy for corporations to borrow money, and stock prices go up. Stocks, real estate, and a college degree have been the greatest investments of the century because bankers live to pump their own bags.

Modern wealth preservation depends on making some assets artificially scarce and dollars artificially abundant. It would have been easier to just use Bitcoin, but then central bankers might have to actually create something of value.

Hackers and Sphincters

Yesterday Wired published a thing about Bitcoin over ham radio. It seemed mostly harmless, until I found the comment section on Hacker News. The top dozen comments were from people quoting their understanding of the law and how Bitcoin transactions run afoul of FCC regulations.

When did Hacker News become the domain of snitches and squares?

Hacking is about beating the system, about finding ways to get around rules that don’t make sense for our situation. When it comes to software, the rules are encoded by machines. Licensing, for example. Commercial software often requires an activation key to use the product. Hackers don’t always appreciate this rule, so they deconstruct the software to remove the copy protection.

There was a time, long long ago, when Hacker News (and its proprietor, Y Combinator) held hackers in high esteem. In fact, the old YC application specifically asked founders to describe a non-computer system they successfully hacked. Responses ranged from traveling on the cheap (Kathryn Minshew, TheMuse) to, uh, shoplifting (Mahbod Moghadam, founder of Genius). In 2010, Paul Graham wrote that this was one of the questions they paid most attention to when judging applications.

Between 2014 and 2015, YC dropped this question from the application. They’re not looking for hackers anymore, they’re looking for people who toe the line.

This is the natural evolution in any industry. Conduct is initially self-limiting in a small community, but as technology becomes widely available the culture degrades and rules must be brought in.

Rules are created as a codification of cultural norms. Rules beget more rules, and over time the culture is forgotten and all that’s left is an industry obsessed with rules.

Amateur radio began with an ethos of experimentation. In the early 20th century, kids rigged up radio stations by winding electrical wire around curtain rods (for the tuning coil) and attaching batteries to sewing needles (for the spark-gap transmitter). There was a general understanding that spectrum is a shared public good, and hams tried to avoid interfering with others. It’s hard to codify “Please share and be nice” unto law, so the Amateur Radio Relay League lobbied the FCC to divvy up the amateur frequency spectrum, with different rules about how each frequency can be used, what can be transmitted, and for how long.

Over the decades, radio operators fixated on the rules and forgot about experimentation and sharing. Instead of “From each his abilities, to each his needs,” ham radio turned into an industry full of sphincters complaining about who’s been using too much spectrum, or using it the wrong way.

This is why communism doesn’t work.

Same with YC and the rest of Silicon Valley. The Bay Area used to be a haven for fruits and nuts, but eventually the culture of welcoming misfits deteriorated into speech codes where anyone who comes remotely close to disparaging a minority loses their job, their friends, and their Twitter account. It’s gotten to the point where entire political parties are banned from speaking for the sake of “inclusion”.

This is probably the biggest risk for mainstream Bitcoin adoption. As the original cypherpunk culture fades, people will look for a codified set of rules. Non-technical normies can’t accept that they have nothing of value to contribute, so they’ll be especially eager to help. They’ll argue over the meaning of “Peer-to-Peer Cash”, or transaction costs, or which software implementation best represents Satoshi’s Vision™. Each faction will stick to their staunch interpretation and governing bodies will be created. Its origins long forgotten, Bitcoin will have turned into the bureaucratic monetary system it once set out to destroy.

A Very Racist Blog Post

Trigger warning: See title.

I’ve lived in this country for over three decades and one thing I’ll never understand is Racism. I mean, I get why people are racist, I come from a very racist country myself. What I don’t understand is how that word is like kryptonite to white people. In the US, being charged with the R-word is worse than being a convicted felon. At least ex-cons can still get jobs.

In 1976, the National Lampoon published PJ O’Rourke’s Foreigners Around the World. The piece highlights unflattering cultural characteristics from foreign countries. Here’s his description of England:

Cold-blooded queers with nasty complexions and terrible teeth who once conquered half the world but still haven’t figured out central heating. They warm their beers and chill their baths and boil all their food, including bread.

Extrapolate the same humor to the rest of the world, and you can see why National Lampoon deleted the piece from its archives. In 1976, the work was considered politically incorrect. Today, it would be hate speech and an act of violence.

Politically incorrect humor is a form of observational comedy. It’s funny because it presents a seeming incongruity (Warm their beers and chill their baths? How backwards!), which forces the frontal cortex to process an unexpected input. When the incongruity is resolved (British pubs serve warm lager, and their bathroom faucets dispense boiling water), the brain releases dopamine to reward the accomplishment. And we laugh.

If you’re not familiar with British pubs or washrooms, then the incongruity is never resolved and the joke makes no sense.

Remember Borat? It’s a movie where Sacha Baron Cohen pretends to be a Kazakh journalist touring the US. He punks people by recording interactions where he spouts off about Jews having horns and laying eggs. The humor lies in the absurdity that no one is dumb enough to think Jews lay eggs. The incongruity is resolved when we remember that Borat is from Kazakhstan and therefore a moron. It’s a joke, at Kazakhstan’s expense.

The film was well-received in Kazakhstan too. The foreign minister even thanked Borat for boosting tourism. Over there, the absurdity is that no one could be dumb enough to think Borat is a real Kazakh. Coherence is restored when the Kazakh audience recalls that Americans are self-absorbed idiots. It’s a joke, at America’s expense.

You know who didn’t find Borat funny? The Anti-Defamation League. The ADL issued a press release warning that the film could reinforce antisemitic bigotry. Cuz that’s their schtick. The ADL’s entire purpose in life is to look for antisemitism, so they failed to recognize the absurdity of a Kazakh believing that Jews lay eggs. As far as they’re concerned, this is how bigots actually think. Borat is advancing the harmful stereotype that Jews are shapeshifting reptiles, rather than the stereotype that Kazakhs are savages or Americans are stupid.

The same thing happened with PewDiePie. YouTube’s most popular celebrity got in trouble after he posted a video where he pays third world denizens five dollars to hold up a banner saying “Death to all Jews”. The joke is that no American would ever film themself holding a racist banner for five bucks. In this country, being charged with racism is worse than landing on the National Sex Offender Registry. Hence the absurdity — these guys in India are willing to do something unthinkable for chump change. The incongruity is resolved when we realize that the banner-bearers are very poor. The joke is indeed racist, but it’s racist against Indians. The sanctimonious grandstanders at WSJ miss this, because they honestly believe the world is teeming with closet Nazis looking for any excuse to be antisemitic.

That’s why we can’t laugh at politically incorrect jokes anymore. I mean, we can, and I do when no one’s looking, but we can’t share them on the internet or anywhere public. The media scolds have become like the ADL in that they devote their lives to surfacing anything that might remotely resemble racism. It’s not their fault, really. Now that Google and Facebook have commandeered media ad revenue, publications have limited budgets and investigative journalism is reduced to searching YouTube for offensive content.