TSA Admits Success

Charles Leocha at TSA News Blog wonders what the TSA is doing for us if they have not caught any terrorists. The TSA responds by asserting that the full-body scans are scaring away the terrorists.

Now I have nothing nice to say about the TSA, and I strongly agree with the bulk of his article about the need to restrict and reform the TSA. I disagree only with his method of evaluating the success of the TSA. He starts off by stating their purpose, and then pointing out they have not actually caught any terrorists:

The Transportation Security Administration (TSA) started out as an organization with a mandate to protect Americans from terrorists in the post-9/11 world.

Halinski was asked directly whether there has been even a single instance of an arrest or detention of anyone, in any way, related to terrorism based on airport whole-body scanners. His answer was, “No.”

The TSA is meant to prevent terrorist attack, not to catch terrorists. The difference here seems to often be lost when discussing preventive security measures. Properly implemented security would make it useless to try a terror attack, so it will never actually prevent one.

There is no way to know if the TSA is doing a good job at fulfilling its primary purpose. We can only have a negative proof – if there is a terror attack, then we know they did not do a good job. As long as there are not any terror attacks, we can never know if that is due to the effectiveness of the TSA in discouraging terrorists from trying, or simply because no one was interested in a terror attack. The TSA cannot prove they are doing a good job, but a lack of arrests also does not prove they are not doing a good job. The security is preventive, and we can never know if anything was prevented by it.

Does someone who put security bars on their windows regret the purchase because no burglars tried to get through their windows? The bars are meant to stop people from trying, not to trap them on their way in. The TSA is much the same.

That being said, Charles Leocha was completely correct about mission creep, and about inefficient and excessive measures. We have no reason to think the full-body scanners are necessary for the level of security the TSA is trying to achieve. The TSA should be seriously reducing the invasiveness and burden of its security checks. Hopefully, we will never know if they are actually keeping anyone away, since the only way to objectively evaluate their success rate is if they fail to keep terrorists away.

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Too Big to Succeed

On the ThinkMarkets blog, Jerry O’Driscoll argues that JP Morgan’s recent loss of $2 billion shows a structural limitation of large banks.

Reports indicate that senior management and the board of directors were aware of the trades and exercising oversight. The fact the losses were incurred anyway confirms what many of us have been arguing. Major financial institutions are at once very large and very complex. They are too large and too complex to manage. That is in part what beset Citigroup in the 2000s and now Morgan, which has been recognized as a well-managed institution.

In other words, they are too large to succeed.

This argument reminded me of a similar argument reviewed recently on the Mises blog, suggesting that the United States are too large to be a functioning republic.

We have abundant evidence that a state as large as 305 million people is ungovernable. Did not Katrina and the BP oil disaster prove that, or runaway health care costs and broken borders, or the failure of education…?

Any government will have regular failures, which do not by themselves show anything wrong with either the system of government or the people in power. Specifically, I do not see how the failures of Katrina and BP show an overall failure of government. The remaining three examples do show an ongoing problem, suggesting that the large size of the American republic challenges the capacity of the government.

While both posts point out challenges of size, they come from completely different directions. America is not too big for a autocrat to run it (well, maybe it is, but that is not the argument in the above post.) The argument on America’s size is that a large populace loses its free spirit. At JPM and other large banks, the challenge is that the people at the top cannot deal with the complexity of the organization they lead.

Size challenges institutions from the top and from the bottom. The people at the top cannot manage what they lead, and the people at the bottom cannot unite around their distant leadership and disparate interests.

JPM, for all its impressive size, is hardly so big that it can’t be managed. I am not convinced that JPM is too big to succeed. It seems more that the investments were too complicated to understand. We cannot prohibit investing in overly complicated schemes, unless we are willing to force all casual investors out of the stock market. Most people understand little of their investments, and often lose their money because of it, but there is no cry to stop them from investing. (come to think of it, it might not be such a bad idea, though I don’t think legal restrictions are ever the right solution for this sort of problem.)

Maybe JPM is too big too succeed in managing investments which are too complicated to understand. The complexity of the investments requires more direct oversight at the highest levels, but the top management is ill suited to such direct oversight on multiple large complex investments. The complexity breaks down the hierarchy. Too complicated to understand leads directly to too large to succeed.

Returning to the complementary argument that America is too big to succeed, that argument also fails in its basic presentation. If size challenged the social cohesion of the republic then it would rather decrease statist feelings as the leader grew distant and the citizenship grew apart. The large size of the American population should rather increase the demand for local involvement, and not lead to socialism.

Here again the problem seems to be rooted in the proper division of responsibility. As long as the federal government is restricted to national issues and states handle mid-level issues, with each state delegating responsibility for local issues to proper local governments, size would never inhibit the healthy functioning of the government. From the Mises post:

If the Constitution established the United States as a decentralized federation, unfortunately federal aggrandizement of power in the long run prevailed.

The breakdown begins when the federal government extends its involvement to the state level. Local politics is too varied and complex to allow a healthy interaction between government and governed. The federal government, in order to streamline its involvement, must encourage loyalty and deference to the central government, in place of civic involvement. In this sense it is correct to say that America is too big to be a republic. It is definitely too big to be a centrally governed republic.

Size requires an organization to implement a structured hierarchy of responsibility and involvement, and to restrict each level of management to its proper domain. If this hierarchy breaks down due to the top management extending its reach to the domain of the lower levels, the organization becomes too big to be a republic. If the domain assigned to lower levels becomes too complex for them, forcing more direct involvement of the higher levels, the organization’s challenges are to complicated to manage. Either way, until a healthier hierarchy can be found, the organization will be too big to succeed.

Return on Investment

Why is there a tendcency to overlicense ? The Conversable Economist (via EconLog) suggests three reasons – restricting competition, worst-first thinking, and the illusion that this improves standards. While I think all three have merit, there is another reason why practitioners fight for regulation. This is their need to justify their own investments in becoming professionals.

Every person who makes a personal investment in their life, such as investing in education or adopting a limiting lifestyle for personal improvement reasons, will want to ensure that this personal investment was justified. We will sometimes see an insistence that the return be guaranteed (this is primarily by women) and otherwise as a demand that the return be conditioned on the investment. Either way the demand is that the personal investment must be artificially post-facto justified.

Another prominent example of this is the demand for educational credentials. If a promising young scholar can be given a position without earning a PhD then those who did earn a PhD to get thier positions wasted their time and resources in making this personal investment.

Feminst divorce law shows the same behavior when it insists on a full split of marital property regardless of who earned it and why the couple is divorcing. The woman made an investment by marrying, and they do not want the returns on that investment to depend on its wisdom, on fate, or on her continued investment.

The same motivation is seen whenever an existing system is replaced by a new one, either in a natural passage between generations or as a legal policy change. The old guard always argues for the necessity of holding the new generations to the same standards they were held to; they predict total collapse of the sector if the entry criteria are liberalaized (and sometimes they are right.) their angst is not caused so much by their concern for the performance of the relevant industry, but by their concern over their own personal investment. They had to work hard to get to where they are, and now they see the young men coming in without having to go through the same rigor. Their own efforts were meaningless.

Another area where this shows up is when people advise their young freinds to make the same life choices they did, even when they proved foolish. This is particulary true for people who held fast to a less appealing lifestyle, believing it to be right. They invested heavily, and the return they expect is to be seen as wiser people. They cannot advise others to do different, which is the worst possible repudation of their own personal investment.

Personal investment is the most important investment we make, and the scariest to get wrong. It is often easier to try to force the world to see our decision as correct than to face the possibility that our personal investment was unnecessary, or worse, counterproductive.

Know Stuff

Learn a new thing every day, and get a little smarter every day.

Kids love learning knew things and showing off how smart they are. (not only kids.) but are they smarter, or only more knowlegdable?

I believe that smartness can be developed, and a primary contributor to learned smartness is vast knowledge. I have come across people who may not have had the highest IQ, but who were able to share a good amount of wisdom based on their accumulated knowledge and experience. I have also encountered many people who had pretty powerful brains but lacked knowledge, and this was painfully reflected in their decisions.

There are of course people with knowledge well in excess of their wisdom. These are a most difficult sort of people, who believe they know everything and understand everything, yet they know little and understand nothing. Knowledge itself does not confer wisdom.

Knowledge is a raw material. Perhaps it is as gasoline, which by itself is worthless, but in the fuel tank it can take you far. Knowledge can contribute a great deal to wisdom and general smartness, but simply amassing facts, with no thought and no consideration, is no different than pumping gas without having a fuel tank to pump it into. It will only make intellectual muck.

Smartness is our ability to draw conclusions from a given set of disparate facts. Even raw knowledge can often serve as intelligence as it broadens the set of available information we have at our disposal. A general who knows where the enemy is is not smarter than the one who does not, but he will make better decisions. His knowledge serves in the place of intellect, allowing him to reach better conclusions.

This use of knowledge is more common but less noticed when dealing with the knowledge of expected outcomes, such as the knowledge of expected psychological responses. Someone who knows how people are expected to react to him will do much better in dealing with them than someone without the knowledge. The first is not smarter, but he will always be seen as smarter than others, while the socially clueless person is said to be stupid. His decisions are stupid, but they reflect a lack of relevant knowledge rather than a lack of intellect.

General knowledge is rarely directly useful. Its value is in the wider perspective it gives in how all the disparate elements of the world fit together. Each piece of raw knowledge is like a little puzzle piece from a gigantic jigsaw puzzle. As the little pieces slowly start to collect a picture starts to slowly emerge. The picture may never be finished, and you may never be sure just what it is a picture of, but you can tell there is a picture there, and have spome sense of what elements will be part of it, and what elements have no place there. Obviously if someone collects puzzle pieces in a box they are not doing a puzzle and they gain nothing from their collection of puzzle pieces. It is only if they pay attention to how pieces fit together – however incomplete their puzzle is initially – that each peice makes a tiny contribution to their grasp of the larger picture, and makes them a little bit smarter.

As we collect and sort information we learn thought patterns which help us form a mental image of how things go together. This is not a mental image we can articulate. It is more of a thought-pattern which can be applied anywhere, and we do not need to know how to describe the way we think. A simple example is the knowledge that lions eat zebras. A raw piece of knowledge with no practical value, except for zebras and lion hunters. But it gives us a slightly bigger picture also. Ideas of predator and prey. Ecological balance. Biological preparedness. Fitness for purpose.

When we gather and sort out knowledge, we train ourselves to identify the underlying concepts and logic which holds everything together. When we afterwards are faced with any decision these concepts will play a part in how we interpret our available information, how we identify important and trivial aspects of the problem, how we judge possible outcomes, and how fast we can draw these conclusions. It makes us smarter.

Higher Education Moving to the Web?

Bryan Caplan posted a challenge to David Brooks who argued that higher education will move to the web in a large surge, starting now. Caplan does not believe this shift will happen in the near future, because an on-line degree does not offer the same signaling value as a real degree. It does not show industriousness and dedication, and instead signals laziness and makes it look like the degree holder was looking for the easy way.

Caplan also argued today that the most likely candidates for taking on-line courses are those who today are going to community college. His second post was arguing that online courses will not be financially successful, just as community colleges cannot charge enough to cover their costs, but his argument is closely related to the first post. In both posts he is arguing that anyone who wants a serious degree will continue to go to a brick-and-mortar university, primarily for its signaling value, and secondarily because they will remain the best institutions, having retained the top students. It is only the weakest students – those who go to community college, and benefit the least from the signaling value of their degree, who will study online.

I think it will rather be the mediocre students who will be the last to leave, as they are the ones who most highly value the signaling value of their degree relative to its educational value. Someone who places a high value on the education but is less worried about the social value of his degree will look for a cheaper education, and will not invest in a status symbol. Students who are going to college to enjoy the social life or to have some fun “life experience” before they settle down will also stay in physical universities, since a virtual education will never offer this.

The smarter students are also the ones who are most likely to recognize the falling value of their degree. They are also the one’s who will pay more attention to the changing demographics of the classroom, as more woman fill the seats, meaning that the primary workforce is going to have a lower percent of degreeholders than the general population, again somewhat lowering the value of having a degree.

Virtual environments offer other side benefits which will appeal to the studious and to the nerds. There is a far lower risk of false (or true) sexual harassment charges. There is also less distraction of dealing with the girls while trying to study. Those who thrive on stiff academic competition (which is again the better students) will prefer a virtual world where they are not forced to compete with people who are only there to satisfy diversity quotas.

The value of higher education as a signaling device is constantly declining. It is true that an Ivy League degree is still very valuable, but that is only a small part of higher education. What will happen to the signaling value of a degree if a noticeable number of serious, education-oriented students decide to go for an online degree, forgoing the signals of a good degree for a more affordable education? An online degree will not be seen as indicating a community-college dropout, but as a pragmatic student who wanted to learn and did not care about the social benefits of college life. An online degree may never be able to compete with an Ivy League, but for those who are not trying for the top, an online degree can easily provide a sufficient signal of their dedication, education level, intelligence, and pragmatism, to make online education a very appealing option.

Is Self-Determination Self-Evident?

Self determination is the popular concept that any distinct demographic can determine who will govern them and their own form of government. This position is a natural aspect of democracy. People should choose their own government, both on the particular level and on the institutional level. Just as we vote for the members of government we should also vote for which government institution will have jurisdiction over us, and what form of government it should have.

That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

The arguments in the Declaration of Independence go much further that simply stating the colonists have decided to self-govern in accordance with their natural right to self-determination. The stated justification was not simply an explanation to tell the world why they thought independence was worth fighting for, or to attract more people to the cause. The opening lines present a moral and philosophical justification for revolution, which a modern understanding of democracy considers irrelevant. Self-determination does not require compelling reasons, or any justification at all, beyond stating that independence would be in the best interest of the people.

Jefferson and the founding fathers seem to have accepted an understanding of civil society which did not allow secession except with extreme justification. Self determination would not have been a sufficient reason to break their ties with England. They were clearly a distinct political entity which was sufficiently mature to govern themselves, and to a large degree they were managing their own affairs before the Revolutionary War simply due to geographical considerations. Still Jefferson found it necessary to explain the circumstances which compelled them to rebel against the Crown.

A purely individualistic approach sees government as external to the people, managing their affairs much as the post office manages their mail. The government does not reflect any inherent relationship between people.

But individualism and democracy are not synonymous. Democracy does not depend on an individualistic philosophy.

People are held together by community and social ties which precede their common governance. When they do set up a formal government they may well choose democracy in acknowledging the value of each individual, but it is not the common government which unites them. It is the common social existence which unites them into one body which forms a government to manage its own affairs.

The individual members of the society are all committed to each other to promote the general good. A member of society who does not care about his effect on society is a parasite, as he is part of the social body but has no interest in its wellbeing. A large demographic is also still an integral part of the society. If they challenge the government they are turning against their own society which they are part of and morally committed to. Unless they can demonstrate serious grievances they are morally committed to their native society. The rebellion against the Crown does not need to be justified, but the split with the host society does need to be justified.

The main difference between the founding fathers who felt a need to justify their move to independence and the modern sensibility which sees self determination as a given is their view of society. They saw society as an organic whole, and expected a moral justification for a decision to split the society. The modern view just sees individuals with no connection to each other except for geographical proximity and their need to form a government in common.

Feminism and Our Moral Nature

Let’s consider a fairly straightforward and inoffensive proposition: men and women are, in their nature, morally equal. They may each have different moral strengths and failings, but they are overall equal.

(I am not defending the above proposition. I am just considering how people respond to it.)

This suggestion should be axiomatic to anyone who argues there is no fundamental differences between the sexes aside from their reproductive capacities. Yet it is those who argue most strongly in all other areas that equality must be assumed who are most likely to strongly promote a view of the moral superiority of women and the inherent immorality of men. Feminism, for all its demands of equality, is based on assertions of sexist inequality.

Feminism was never a demand for equality, and I have no interest in pointing out their contradictions here. I am interested in understanding how they view moral nature and why that is important for their platform.

Feminism elevates the feminine moral nature while denigrating the male nature. Women are compassionate and capable, men are violent and lazy. There is no one at a baseline morality. What would be the baseline is the non-political view which says everyone is human. This default view of moral equality is twice challenged by feminism, both to raise up women and to push down men.

The rhetorical value of this view is apparent when anyone tries to discuss the true moral nature of either sex. If you claim men are not morally deficient then you are defending violence against women. If you say that women are not angels, your are misogynistic. If you would make the shocking claim that the sexes are morally equal, you are a violent misogynist.

While the moral sexual dimorphism presented by feminism serves them in many ways, one of the most immediate is the way it blocks debate on the issue. Simply by presenting this view of moral inequality they make any attempt to argue it politically incorrect. Most importantly it completely blocks the possibility to argue that the sexes are morally equivalent, since that is now the most immoral possible position.