What My Mentors Taught Me

My mentors have helped shape me unto who I am, and who I want to be. They have inspired, humbled, and encouraged me. But right now, I want to share some things they've taught me.

Some of them I've only had a few, fantastic conversations with; others I've kept in touch with more consistently, so please understand that I use the term broadly, as a kid who doesn't really know what to call the people who have taught him lessons he will never forget.

And those lessons are many. They know how to share things with me that I can't learn from textbooks, and answer the questions I don't know I ought to ask. Here are the four lessons that have impacted me most powerfully.

Be Creative

The act of creation is a powerful and passionate endeavor. It is the tranformation of imagination into reality. It is a drawing of distantly related arts, practices, and ideas together to fuse them into a novel invention. Creativity should not be a sidenote, it should be a main driving force and purpose in life.

Creativity certainly does not belong only to the humanities. I'll use an illustration given to me by a mentor, Dr. C, because I believe it makes the point most clearly. He said, "I could take you into the operating room, and in a week have you performing a hip replacement surgery. You follow the procedures, step-by-step, until you sow the patient up. But it would take decades to make you an engineer."

Why? Because engineering is creativity. Dr. C calls the act of creation the most enjoyable part of his life. "Some people spend their lives making money and starting businesses. I've performed the entrepreneur's role a few times, but in my life, I've loved to create things so much more."

Another engineer, Mr. Walker, also described the primacy of creativity. Once when I asked about entrepreneurship, to my surprise he didn't say much about business at all. He told me I needed an idea first. "When you look at the great entrepreneurs," he began, "you see that they all began with the great idea. Michael Dell, Steven Jobs, Wozniak... they each had an idea that they grew into something great."

Pursue Opportunity

Dr. C's life is a compelling argument for this philosophy. It is a series of wildly dissimilar but exhilarating chapters, woven together by expertly hunted opportunities. Sometimes those opportunities serve themselves up on a platter, but more often they lurk unseen and unsought in the shadows.

The general image we see when imagining an opportunity is something like this: you're sitting peacefully in the dining room, when upon a sudden, you hear a knock at the door. You rush out front, where the man in the suit is holding the giant million dollar check. In our minds, we expect opportunities to be job offers, scholarships, and unexpected blessings.

But this is the real world, where opportunities are often as cleverly hidden as they are abundant. The opportunity hunter must have an eagle's eye, always on the watch for prey. He must have a stubborn, dogged, persistence. And when he sees a worthwhile pursuit, he must tackle it with a matter-of-fact readiness.

Treat People Magnificently

I once asked a particularly personable gentleman, Mr. Falconnier, what he could tell me about people skills. To my surprise, he didn't really give me much (at least, not about what I then thought "people skills" were). He simply elaborated on a remarkably consistent theme of his: treat people magnificently. Make them feel worthwhile.

Powerfully deep relationships come out of treating people right. Some of my mentors have achieved remarkable things in life, and still they say that friendships are the most deeply satisfying things they've been blessed with.

Opportunities do come out of treating people right--we've all heard, and the biographies of my mentors attest, how powerful of a tool networking is. Enormous personal gain comes from great relationships, even for the most selfish Randians. But these don't comprise the rationale for treating people magnificently. That rationale is a matter of plain rightness. If you treat your Wal-Mart cashier any worse than your loan officer, something's wrong.

Find Mentors

Ignorance, I've found, falls into two categories: illuminated ignorance, and shadow ignorance.

Illuminated ignorance is what you don't know, but are aware of. You know that you don't know it, but you know that you ought to know it. Any freshman engineering student can call advanced calculus and thermodynamics his areas of illuminated ignorance. Luckily, ignorance of this sort can be burnt away by teachers and textbooks.

Not so for shadow ignorance. This is the kind of thing that you don't know, and aren't aware of. You don't even know how ignorant of it you are, nor how crucial it is. For me, the three lessons above each fell into this category at one point or another (if not conceptually, at least emotionally and convictionally). What's worse, you cannot fight shadow ignorance with books or lectures or self-help books. These sources provide answers; but you don't even know the questions you're supposed to ask. Only your mentors do. They size you up and evaluate you. They figure you out. They relate lessons you never would have thought to ask for, illuminating the shadows of the unknown.

It's important to make sure the mentors you choose know what they're talking about. The world is full of ignoramuses more than willing to share potentially dangerous nonsense with you. I know, because I've met them, and been mentored by them. Avoid their spewings. A mentor's life must attest to his or her wisdom and experience.

I have been blessed to meet these kind of people, and blessed that they have chosen to give me hours of their valuable time. The lessons I've tried to share here aren't the only ones I've received, but they're ones that burrowed into my head until they radiated a blinding obviousness. I can't be sure I'll ever fully live them out, but I can be sure to try.

I wanted to share them because they matter to me, and I hope they may be valuable to someone else. Who knows, one day you might end up relating these ideas to some teenager sitting across the table from you, sipping coffee and scribbling down illegible notes. If so, God bless you. You'll never know how much that kid will appreciate it.

What is Utility?

What is Utility?

Dear Jessi and Tim,

I apologize if you guys have been through all this already and think it’s too boringly basic. I tried to include some stuff that I think is interesting, but that your coursework might have skimmed over. Alright, here goes.

Utility is satisfaction. Some would say happiness, but I think satisfaction is a better words for this reason: satisfaction comes from something. Happiness is more of a state-of-being. Objects do not possess utility, and it's slightly misleading to say they "provide" utility. Rather, you might say people derive utility from objects. So when an economist refers to an object’s utility, he isn’t saying the object possesses the utility somehow... it’s like talking about a pet’s owner. The possessive form implies an association, not actual possession.

It Only Gets Worse

There are two interesting things to notice when it comes to utility. The first is called the law of diminishing returns. Now, this might not be accurately called a “law,” but it makes sense. It goes like this: generally speaking, the more quantity you acquire, of any good, the less utility you derive from the marginal product (marginal = at the edge, so marginal product is the very last one you bought). So your first shirt may give you “20 utility points,” but the second only gives you “18 utility points.”

This is simple to explain. People always choose the option that they think will give them the greatest amount of utility. So if you choose a shirt, you get 20 utility points. But X was the largest amount of utility you could possibly have chosen at that moment, so the next choice has to provide just a little less. Maybe a book you wanted, that gives you 19 utility points. But now that your first and second best choices are done, you go to the third best choice: another shirt, which provides only 18 utility points since you already have one, and the need for a isn’t as pressing.

That’s just a general rule; there can be exceptions. It’s a dumb thing to argue about, despite the fact that some people will.

Are We Utility-Maximizers?

Since utility is purely subjective, it would seem to follow that we're all utility-maximizers. After all, it's impossible to do make a choice without "wanting" to make it. You might not like doing homework, but you do it because you want to do homework MORE than you want to fail the test. You might not like to take your vitamins, but you want your vitamins more than you want to be unhealthy.

Still, there is a difference between utility in the here-and-now, and utility in the long run. If I say, "want to get up at 5 am and jog next week?" you might say yes. If I actually woke you up at 5 am, you would probably say something different. The things people choose in an immediate setting are not what they choose in a long-run setting when they plan future activities.

This, by the way, is what enables us to make decisions about what is best and worst for certain members of society. They may be maximizing short-run utility, but for a drug addict that short-run might be no longer than however long it takes to get the needle in his arm.

So even though people only do things that give them utility, in the long-run, they often live lives that are far-less-than-optimal, even when they know exactly what behaviors would improve their general well-being. Their heads are in the long-run, but their behavior is in the immediate.

Can Utility be Measured?

Are “utility points” real? Can we measure or quantify utility? Can we decide which behavior or product provides more utility?

Erm... depends. If you’re referring to individuals the answers are no: we simply don’t have the technology to peer into the brain and figure out what utility is or how to measure it, by looking at brain waves and neurotransmitters.

If you’re asking about groups, we do. This is just because of a quick in statistics. Even if we cannot measure individual experiences of utility, we know that it has to average out in a large group of people.

To illustrate the difference:

if you are willing to pay ten dollars for a pair of jeans, you illustrate that you want the jeans, but not how much you want them. Maybe there’s another kid who wants to only pay five dollars for the jeans, but his brain is still wired such that he would enjoy them more. Maybe he’s too poor to pay any more.

But in a large group, let’s say a group of 1,000 people are willing to pay ten dollars for the pair. Another group of 1,000 people will only pay five dollars. All those random variations between individuals get lost in an average, cancelled out by deviations in the opposite direction. SO we can say the group of people who pay ten dollars will truly want the jeans more.

Insert clever, well-written ending here.

The Ten Principles of Economics: Part II, Principles 5 - 7

The Ten Principles of Economics: Part II, Principles 5 - 7

As conceived by Dr. Gregory Mankiw

For Jessi and Tim

Principles 5 - 7 involve how people interact, and some of the simpler "emergent properties" of the market (remember, the market is an "emergent order" composed of buyers and sellers, and its emergent properties cannot be applied to its components).

5. Trade can help everyone

The economy works most efficiently, as in, the most value gets created, when each of us specializes in the one thing we can do better than anything else. This is true on the individual level, the social level, and the international level.

Say that we are neighbors. You are a repairman and I am a landscaper. We could each work for ourselves alone; you would do your own repairs and take care of your own lawn. Same for me. Or, you could do repairs for me and I would fix your lawn. Even if you are better at both things, you can still be more productive by focusing on your own personal specialty. In the end, more stuff gets fixed, and more square feet of yard gets prettied up, when we specialize. No matter how we divide up the products (a matter to be determined my market forces—supply and demand), there's more to divide between us.

You specialize in repair, I in landscaping. Florida makes oranges, California makes computers. China makes toys, the U.S. makes medicine. More value is created when we specialize and trade.

Oh, and there are some fairly intelligent people who support trade restrictions between countries (cough cough, China). But at least in the particular field of basic economics, those people are complete idiots.

6. Markets are awesome

Market: noun, a group of buyers and sellers who are buying and selling stuff.

This is really a profoundly awesome principle, when you look at why it is so true. Here is an example of how.

How many people does it take to screw in a light bulb? One. Really, just one. But how many people does it take to create a pencil? Hundreds of thousands, maybe more. The process is inconceivably complex. Trees were cut, and lumber was delivered to a plant. Machines sliced boards into little sticks (and someone built those machines, with metal that was mined, transported, refined, transported again, and pressed into shape by other machines). The same goes for the paint, the little silver metal thing, the eraser, and the graphite.

Every step of this process is crucial to the formation of the end product. But almost no one said "I am doing my job because I want to build a pencil." The market functioned as a sort of "invisible hand" that guided laborers, factory owners, shippers, and investors into the right places at the right time to produce what people needed. It works because people realize they can make money whenever there is a market for transportation, wood, machines, trucks, or whatever. Supply chases after demand. Then, when there are "just enough" in one industry (like the pencil industry) the profit dries up because demanders aren't desperate for suppliers anymore (so the suppliers cut prices until they are earning just enough to stay afloat).

7. Governments can sometimes improve the market

"Making money" (the profit motive) drives many firms to change the world in awesome, creative ways. The profit motive drives people to invest money in the stock market, providing the financial resources for firms to stay alive. Markets harness these selfish motives and transform them into socially beneficial outcomes, like the creation of new products or the more efficient use of input resources.

But those motives screw things up in a couple of ways. Sometimes, a firm can obtain so much control over the market it is in (like the market for oil) that no one competes with them. Thus, they keep their profits at this maximum level by curtailing production at less than optimal levels (because when they increase production they have to lower the selling price in order to sell the whole supply, and at some point this eats into marginal and total profit). Another example is pollution: if there aren't laws to regulate belching smoke and gasses into the air, firms will keep on doing it till we all die of lung cancer. Public goods are another example, but we'll hold off on those.

The final three principles deal with the macro-economy: the emergent order on top of the market and the rest. Those principles govern how much stuff humanity creates and consumes, the properties of money, and the distribution of all sorts of capital across society's broad variety of needs. I hope you're excited!

The Ten Principles of Economics: Part I, Principles 1 - 4

The Ten Principles of Economics: Part I, Principles 1 - 4

As conceived by Dr. Gregory Mankiw

For Jessi and Tim

1. People face tradeoffs

Many of the emergent orders we see in economics arise because people are trying to play this delicate balancing game. People face tradeoffs between work and leisure, saving money and spending it, eating well and living long, reaping reward and minimizing risk. Very few things are free. When people, firms, or policy-makers do things... there is always something given up.

2. Cost is what you give up

Costs are not money. They are lost opportunities. For instance, what is the biggest cost of college? Certainly not dorms or food... you would have had to buy housing and food anyway. The biggest cost of college is almost always the wages you sacrifice by going to school, and not working. Similarly, firms incur costs when they operate, costs that have nothing to do with labor, materials, or overhead. They are opportunity costs, the opportunities sacrificed by the firm when it devotes its resources to plan A and not plan B. In this way, accountants view profit differently than economists do.

3. Think on the margin

Imagine you run a store, but the economy isn't so hot, so people just aren't shopping much anyway. You're losing money. But quite often, it will be rational for you to stay open, despite generating a loss, even before the economy picks back up. This is because there is a difference between the margin and the totality. If you thought about the totality, you would say, "in total, my costs exceed my revenues... I'm losing money... I should leave the market." But the margin is the edge. Marginal means "just one more."

So, you look at the "marginal" profit of staying open just one more day. Sure, you're losing money, but that's because you pay rent, purchase inventory, and pay for insurance. Those costs are the same whether you keep your doors open or not. On the margin, the costs of you keeping the doors open just one more day (some labor hours and the electricity bill) are less than the revenues from staying open that day. In total (for right now) you are losing money. On the margin, you are making money (therefore making the total loss a bit less).

4. People Respond to Incentives

When a behavior is rewarded (becomes less costly or more profitable), it is encouraged. When punished, it is discouraged. The idea is simple, but profound, and we often neglect its implications. When you tax income, you punish labor. When you provide welfare, you encourage not working. When firms receive patents to products they invent, they invent more products. When professors stand to risk losing their jobs for expressing radical ideas, they are discouraged from expressing them. When stand no risk of losing their jobs for being lazy (if they have tenure), they are encouraged to be lazy. When you force people to wear seatbelts, lowering the risk of death in case they are in a wreck, you encourage them to drive less carefully.

Lots of very, very stupid economic policies come from politicians and laymen not thinking very clearly about the rewards and punishments they met out with their policies, and what consequences those will have.
These principles deal with how people think and behave by themselves. The others will deal with phenomena that occur when they interact with one another.

Universal Entrepreneurship

What comes to mind when I say, 'entrepreneur'? The Silicon Valley cowboy, leverage mobile platforms and building social networking utilities? The steel tycoon of the industrial revolution, forging a new path to an industrialized America? Or the engineer whose innovative manufacturing methods revolutionize the way cars are built, bringing them within reach of ordinary Americans? Whatever your conception is, the entrepreneur is quite an exciting individual nowadays. Entrepreneurialism is not a career; it is a culture. But that culture, that emergent order of ideas, doesn't all fit within its dictionary definition. The question is this: do we shed a valuable set of ideas in order to conform to the dictionary, or do we reinvent the entrepreneur?

Jean Baptiste Say coined the term, giving us our classical conception of the entrepreneur as an independent businessman, an "intermediatory between capital and labour." According to Say, the entrepreneur managed his workers and his equipment in order to provide goods and services to the market. So far, so good, right?

But if that's all an entrepreneur is, why does Stanford regularly invite economists, rappers, authors, presidential advisors, and presidents of charities to speak at its "Entrepreneurial Thought Leaders" seminars? If Say's definition was exclusive, how come drug dealers, lawyers, and stock brokers don't  burst into mind when we think 'entrepreneur'? Something is missing.

Maybe we need to reenvision what it means to be an entrepreneur.

The overriding theme of entrepreneurial culture today is innovation. The entrepreneur who follows in someone else’s footsteps, with someone else's business plan, selling someone else's idea, isn't. That's great; innovation drives the economy and the world forward. The creative entrepreneur stretches his mind into the future, dragging it into the present's grasp.
Here's another commonality among entrepreneurs: they start small. Large firms spin off huge subsidiary corporations with hundreds of millions of dollars of initial capital. Entrepreneurs focus a relatively small pool of resources onto a single goal with brilliant intensity. What they create is a scalable start-up, that is, one that can be transformed into a mammoth institution down the road. The great capitalists of America, guys like Jobs, Gates, and Zuckerburg , started as entrepreneurs. They became CEOs, presidents, and chairmen. But CEOs, presidents, and chairman don't operate small, scalable start-ups--they aren't entrepreneurs anymore.

The marriage between innovation and starting small is by no means accidental. If an idea is truly innovative, it's probably risky. It's untested. It would be stupid to dedicate relatively large amounts of resources to what may crash and burn. So the start-up is an experiment; if it burns, you cut your losses and try something else. If it thrives, you attract more resources and grow it into something great--an Apple, a Pixar, or a Facebook.

Now that we've narrowed the entrepreneur to a creative innovator, who starts small, and scales up, we find one thing missing: any mention of profit. The entrepreneur is not restricted to the business world. Why should he be? Why should a creative genius be restricted to pleasing stockholders when the world needs innovation in so many more domains? Suddenly, entrepreneurialism as a way of life opens wide: it grows to encompass every meaningful human endeavor.

Intellectual entrepreneurs like Duncan Black began entire schools of thought ( like Black's Public Choice Theory), outside any preexisting academic disciplines. Others, like Alfred Nobel or Richard Wurman, created new institutions for encouraging, advancing, and disseminating new ideas (the Nobel Prize and the TED conference, respectively).

Evangelical entrepreneurs create innovative ways to spread the Gospel and cultivate spiritual growth. My old church was a start-up; they met in a movie theater, answered texted-in questions during service, and published a weekly webcast to address anything they didn't have time to answer on Sunday. Even outside the church doors, it's hard not to find entrepreneurs at every turn whenever people do God's will. The YMCA & YWCA, the boyscouts, and the small-group phenomenon all meet start-up criteria.

Social entrepreneurs are motivated more by altruism than profit. Some finance poor entrepreneurs, and create trade channels for craftsmen. Others, like George Washington Carver, were inventors--Carver designed hundreds of technologies using agricultural products that wouldn't deplete soil as severely as cotton. He only ever applied for three patents.

Different people. Different passions. Different goals. But innovators, all. Entrepreneurs, all.

Having reenvisioned the entrepreneur, maybe we should seriously consider reenvisioning life itself. We could call the new framework "Universal Entrepreneurship." The idea? Simple--make everything a start-up, and treat life like the playing field where one after another, start-ups are built and sent onto their eventual paths. Why think this way? Because there's no good reason why life has to be lived the way we normally live it. Let's stop pretending that everybody needs a linear, one-track career, or that life has to occur in 'stages,' (college, careers one, two, and three, followed by retirement) like the life cycle of an insect.  

Kids will ask what they should "be" when they group up. Now there's a new answer we can give them--a universal entrepreneur. "Find the things you love, the things you're meant to do, and do them all. Build charities, start companies, invent technologies, and create platforms for people to share ideas." When they ask how they'll be able to do so much, we can tell them to treat their start-ups like legos: discrete units, separately formed, stacked one on top of another to form the composite structure of life. The art of entrepreneurship is to form the lego; the art of life is too stack them together beautifully.

Maybe it's not for everyone. Of course specialization is a great thing. But maybe there's some kid out there, equally passionate about physics and anthropology as he is about ministry and music, who was made for this sort of life. Maybe telling him or her to bottle up half a dozen genuine passions and interest for the sake of a single career is a really terrible idea. Maybe we've already confined dozens of those individuals into our shoddy expectations, without knowing it.

Now, if you were a kid who wanted to do all things awesome in the world, wouldn't that be the coolest thing ever? Wouldn't that motivate you to learn and grow as a person? The more I think about it, the more I suspect that our poorly thought out, half-baked cultural and economic norms have a lot to do with why some kids don't  grow up. Maybe if we gave them better reasons, they would actually grow up with gusto.

The Economy as an Emergent Order

For Jessi and Tim.

You both seem to enjoy studying economics this year. And I am sure you both know how happy this makes me. I'm not just excited because I think econ is cool and I will have more of an opportunity to talk with you guys about it. I'm excited—no, exhilarated—because you're discovering a beautiful field of study, as sublime as it is under-appreciated. But some parts of economics are boring, ugly, and crude. I want to shed some light on why some of it seems so crude, and the rest so elegant. 

The economy is an emergent order. What’s that? An emergent order happens when lots of individual elements cooperate and act in orderly ways, producing phenomena and patterns on a higher level that become realities in themselves, above and apart from the individual elements that comprise them.

We see emergent orders all over. In physics: atoms, motion, and gravity form stars. Stars radiate light, shape galaxies, and supply the energy that enables life to happen—atoms, gasses, and gravity don't. In neuroscience: our memories, emotions, and thoughts are to some extent the emergent order arising out of electricity, chemical reactions, and a finely-crafted architecture of about one quadrillion connections looping all over the brain.

As it relates to economics, one of the most important emergent orders is the market, the arena of buying and selling that determines how much stuff is made and what price it sells at. When millions of people and companies (I'll call them 'firms' from now on) compete for dollars and resources, these lines called supply and demand materialize. They aren't mere abstractions; these entities have real effects on society. The large-scale properties of this emergent order cannot be ascribed to any of its constituent parts (although it is their behaviors which give rise to it).

The economy can be seen as one big emergent order, comprised of smaller emergent orders (such as the market, supply chains, and financing channels). The economist's goal is to understand those properties, and to tease out sometimes nuanced and complicated cause-and-effect relationships between the constituent parts and the emergent whole. People are nuanced, weird, hard-to-understand things, so cause-and-effect relationships can be easily obscured by confusing and irrelevant variables.

Take the relationship between government stimulus spending and economic productivity: there are lots of related and opposing effects of stimulus spending. One is an increase in buying and selling behavior, so firms produce goods for which there wouldn't have been demand otherwise. The other is a diversion of resources away from firms, and toward the government. Firms only survive by extracting as much value as possible from given resources (so they can sell stuff at a profit); government has neither the incentives to be productive nor the mechanisms to know whether it is providing value or draining it (more on that later). These two effects are both real, and both go in opposite directions: one increases productivity while the other diminishes it. So does stimulus spending increase or decrease productivity? Good question. Economists aren't sure yet.

Now, a lot of the conversations you see on CNN and C-SPAN about the economy sound really dumb (to most people, that is; some, such as myself, aren't so disgusted). Pundits talk about inane things like prime rates, home-ownership, the labor participation rate—not the most sublime topics. That's just because the stuff on the news is a particularly tiny subsection of economics: usually the overlap between the financial industry, government policy, and controversial economic theories. Of course that subsection is going to be boring, ugly, and crude. But it's a very, very tiny subsection. The rest is awesome.

Don't Love America (There's a Reason)

Before I start, instead of asking that you just hear me out with an open mind, I merely beg you not to shoot me or throw things at me (but if you must, please choose the latter option).

Life is good, as is love. The sun, beautiful, warm and life-sustaining, is good. The light that comes out of the lamp beside me is good. America, however, is not good.

Goodness is a property that comes from something intrinsically noble and lovely. Life, love, happiness, and justice do not appeal to any higher authority to validate their goodness. They are in and of themselves good.

But a nation? Why on earth would we ascribe it such a label? It's easy to see why, actually. This nation has done some pretty impressive things. A founding document centered on the ideal of inalienable rights is pretty impressive. And who could forget that awesomely epic revolution we fought against a tyrannical Britain?

But it's still absolutely crucial that we don't misunderstand that history to believe that America is somehow good. Here's why.

Many of the things that America has done are good, and we ought rightly to be proud of those virtuous fragments of our heritage. We can rightly take pride in what our country has done right, but the moment we assume that rightness to rub off on the nation itself (which is nothing more than a landmass plus a government) we lose sight of the dark times in our past. We put on shades that bias our view of the past, present, and future.

In other words, it's not only absurdly false, but dangerous. When you view a country in and of itself as inherently noble, you look favorably upon its past transgressions, no matter how grievous. After our treatment of Native Americans in the nineteenth century, both sides' war crimes during the civil war, our terrible discrimination against the Chinese in the industrial revolution, and our mistreatment of blacks throughout the twentieth century, America has serious blood on its hands. I don't hate America for that, but I recognize that those evils happened. When you put on these rose-tinted glasses and look at the past with an "America is beautiful" frame of mind, you will try to scrub those transgressions away. You will rationalize them, try to ignore them, be discomforted by them, repress them, and irrationally deride anyone who acknowledges America's past sins. Your reactionary vitriol will be unappeasable—you'll call the truth-teller an unpatriotic, America-hating liberal before he even has time to blink.

But your view of the past won't matter nearly as much as your view of the present, which is shaped and colored by your view of the past. You won't think twice about the possibility that we may be wrong in any given war or conflict; whether Iraq, Afghanistan, or the war on drugs, America automatically gets the moral free pass. You'll implicitly care more about the lives of U.S. citizens than you will about the lives of foreigners, as if there was some difference in the inherent value of each human life. You'll ignore the hardships that our trade and immigration policies inflict upon the rest of the world, only focusing on how to line American wallets and alleviate American cultural discomforts. You'll close your ears to any possibility of a wrong deed on America's part.

You will, inch by inch, become blind to injustice.

This nationalistically induced blindness lies at the root of much of the world's present and past hardship. The Germans allowed the Nazi atrocity to march forward in one of the most terrible onslaughts of evil in human history, precisely because they believed in their country. The Confederate States of America was largely motivated not only by racism and greed, but the southern nationalistic view that they had to keep pure their southern way of living. Why? Because the "south" was inherently good.

To love one's country is only the collective, political extension of very human sins—pride and self-centeredness. Why should a corrupt, sinful human not extend his pride and egoism to his country? And it is also pervasive into the will and emotions. We feel uncomfortable, at first, detaching ourselves from something we so dearly cherish. It hurts to lay down our pride of the nation, just as much as of the self. But it must be done.

History tells tales of tragedy when this lesson is ignored, and our current political, diplomatic, and economic policies are largely contingent upon the degree to which we can abandon nationalism, and view all humans of all nations as equal. If we cannot get this mindset straightened out, I fear that we have a future awaiting us full of more needless suffering… only because, as a nation, we wanted to feel absolutely great.

It needn't be so.

Dad Gum Gub'mint

"Dad gum gub'mint," he says. His eyes squint and his lips curl into a grimace as he goes on, saying, "Gub'mint's the whole mess. Gittin' too big. Think they can run our whole lives!"

Then he proceeds to rant about [insert government program here]. Everyone thinks he's crazy, and to be honest he probably is. But he has something important in common with the Constitution, but not quite the same. What he has is more like the Declaration of Independence.

First, who is he? He's your crazy old uncle, or that neighbor with all the guns, or the sales clerk at Bass Pro. He might not even be a 'he.' She could be your home-schooled friend who's memorized the constitution and brings up at least of the amendments in every political conversation she has (but she probably prefers the tenth). He or she is whoever distrusts government.

Obviously, what he or she possesses is distrust of government, but how does that compare to the Constitution and the Declaration of Independence? Distrust is a real, legitimate check on the power of government. The Constitution supplies several legal checks, but it cannot supply social norms. Norms are not documents, they cannot be legislated into existence.

The Declaration on the other hand is a little more analogous. The Declaration expressed an idea, served as a tool of moral warfare, and was a morale lifting agent during the Revolutionary War. The idea was governmental distrust in a very blatant form—individuals superior to the state, and the state under threat of revolution by many individuals. The moral warfare was fought as the Declaration gave the country and the world a new set of eyes through which to evaluate the revolution in a positive light. By materializing these ideas into an eloquent statement, the Declaration became a rock upon which the soldiers could base their morale and courage. "What are we fighting for, anyway?" asks the one, to which another responds, "The rights of man! The inalienable rights that God gave us! We are overcoming a tyrannical government, as is our right and duty! Don't you remember our Declaration?" Because the very essence of the Declaration was and idea, it serves almost the very same purpose as the norms I am about to mention. What makes it so powerful is that its force lies in social norms, not legalese.

What is a social norm? It is an idea, shared by the multitude, about what is right, wrong, commonplace or acceptable in a given situation. We shake hands with the right hand. We say, "how are you doing?" when we begin conversations. We don't talk about religion and politics among diverse company (a norm I am known to flout regularly). And we don't trust the government.

We once distrusted government. This distrust is so crucial because it is used to prevent tyranny just as much as our constitutional checks and balances are. Furthermore, when our constitutional checks are violated, as can happen to any legal document, society's norms remain. We've still got the people who say, "No! That government's gotten way too big, and gone way too far!" Judicial, executive, and legislative checks aren't enough; means outside the government are crucial as well.

Those norms are fading away.

Under the false pretense of reason, we are encouraged to separate our emotions entirely from our thoughts. That is not 'reason,' it is lunacy. Government possesses the greatest claim on the use of force. It is dangerous. It is not a simple, harmless institution; it is very able and, as history clearly shows, very willing to go too far.

Americans are now okay with regularly showing government officials an ID. We're fine with filing mind-numbing loads of official paperwork to run a business. We are okay with getting searched and patted down at airports. Where's the distrust? Where's the "back off, I don't want your official nose in my business, my personal life, my home, or my junk"?

There should, regarding government, be a feeling similar to that which motivates you to cross the street when a suspicious-looking character is coming from the opposite direction. This brand of distrust motivates you to lock your doors in a bad neighborhood. It motivates you doubt government's stated intentions and dread its power. There is nothing irrational about that.

Not only is this apathy harmful, but it’s self-propagating. In other words, it's not only the match; it's also the wind which carries the fire. The more people accept government intrusion into their lives, the more their children will. The more they will accept in the future. Acceptance of governmental intrusion into every aspect of our culture, personal lives, and finances is simultaneously its own cause and effect.

So don't marginalize the admittedly crazy redneck who gripes about government day in and day out. Don't make fun of the kid who talks about the constitution non-stop. Give him or her a pat on the back sometime—say, "Thank-you, friend, for standing up for our rights." Then just smile as the rant continues.

Beautiful Imperfection

Markets do not operate like computer programs. They are not cleanly executed, easily monitored, or reliably predicted. Markets are, in a word, sloppy.

In our introductory economic textbooks, we pretend that they are. This lets us simplify and understand the world. Much like a beginning physics student will assume a lack of air friction while studying moving objects, the economics student pretends that prices are nailed to equilibrium points. He pretends that prices for the same good are uniform, and that everybody knows what all the prices are.

But just as the physicist one day recognizes that air resistance can make or break a vehicles performance, the economist sees that market imperfections have serious effects on market outcomes. In fact, market inefficiency is much of what policy-makers are looking at today. They want something to fix, and the economy seems like a perfect candidate.

Here's a cursory list of some of these inefficiencies: Prices are not uniform. Not everyone is aware of competing prices. The same type of goods and services vary enormously in quality. People act (even financially) for emotional reasons. Information (about prices, quality of services, or available alternatives) is not evenly distributed among society.

Economists must look at the systems and institutions by which resources are allocated and determine whether they are promoting the common welfare in terms of efficiency (creating the most, best wealth) and equity (fairness, justice). So is all this acceptable?

Market inefficiencies can help and hurt. When do they hurt? When they fail to enable intelligent people to create technologies and ideas. When they prevent competition from pushing firms to the limits of efficiency and quality. When asymmetrical information prevents consumers from knowing if the companies they patronize are dealing fairly with them.

But I stand by the help these imperfections bring, which redeem them, which make them laudable. The market's evolution is constantly weeding out the bad. We are always becoming better able to efficiently allocate resources. Companies are being forced to act more competitively. The rising economic status of the consumer has made his voice so loud that companies must bend to his or her will. So the bad is fading away… but the imperfections themselves will always remain in some form, for good purpose.

That's because we are humans. We cannot attain anything perfect. Even a perfectly engineered, coordinated system would be subject to human error, and a true market falls short in the same way. Human action, no matter how systemized, has serious limits—thank our biology and the physical state of the universe for that. So what on earth is so great about the imperfections?

Can a computer program change? Can it adjust itself to be fair? No. It is deterministic—what is going to happen is predestined and perfectly efficient (if it's well designed). If a market were that way, the poor would be screwed. Those who possess inferior intelligence levels only by reason of their DNA would be screwed. The smartest people, who could afford the most advanced education would rise to the top of the economic hierarchy which was predetermined before they were even born. The below average in intelligence, who never went to the best schools, who weren't born with trust funds in their names, would remain in mediocrity.

What does this have to do with market imperfection? Everything. If you are average in wealth and intelligence, you can exploit opportunities that no one else has yet exploited. You can target clients with a slightly different product than your competitor offers. Your business won't be automatically crushed by the more efficient megacorporation from different state, and your job won't necessarily be nabbed by an overseas worker who works at a lower cost. All you need is to be more willing to search out the crevices for needs that haven't been met by the more efficient or productive economic agents.

You can view the sloppiness in our economy to be a vice. You can also view every little splotch as an opportunity for some enterprising, determined individual to make his mark on the world by filling the niche no one else had yet claimed. The moment everything becomes hyper-efficient, there is no such thing as opportunity. There is only the brute fact that as a human with intelligence x, stamina y, a personality z will fit into a predestined position in the economic sphere.

Is that justice? No. It is bondage.

I find it remarkable, though. Really, who would have thought that imperfection itself would be one of the most beautiful elements in the spontaneous social order that we call the economy?