66 Message 66: From extropians-request@gnu.ai.mit.edu Sun Aug 8 14:37:08 1993 Return-Path: Received: from usc.edu by chaph.usc.edu (4.1/SMI-4.1+ucs-3.0) id AA18136; Sun, 8 Aug 93 14:37:06 PDT Errors-To: Extropians-Request@gnu.ai.mit.edu Received: from panix.com by usc.edu (4.1/SMI-3.0DEV3-USC+3.1) id AA04327; Sun, 8 Aug 93 14:36:55 PDT Errors-To: Extropians-Request@gnu.ai.mit.edu Received: by panix.com id AA07702 (5.65c/IDA-1.4.4 for more@usc.edu); Sun, 8 Aug 1993 17:32:16 -0400 Date: Sun, 8 Aug 1993 17:32:16 -0400 Message-Id: <199308082132.AA07702@panix.com> To: Exi@panix.com From: Exi@panix.com Subject: Extropians Digest X-Extropian-Date: August 8, 373 P.N.O. [21:31:58 UTC] Reply-To: extropians@gnu.ai.mit.edu Errors-To: Extropians-Request@gnu.ai.mit.edu Status: RO Extropians Digest Sun, 8 Aug 93 Volume 93 : Issue 219 Today's Topics: [2 msgs] ECOMAD: Gaia Liberation Front Madness [2 msgs] For My ExtroPositivist Critics [1 msgs] HUMOR: AI is HERE AT LAST! [1 msgs] I have to get out of this society NOW... [1 msgs] INVEST: Transaction costs [2 msgs] INVEST: Transaction costs [2 msgs] Netcom expands to Seattle, Boston, etc. [1 msgs] PHIL: Divine right of kings vs. natural rights? [1 msgs] The Age of Robots [1 msgs] Administrivia: No admin msg. Approximate Size: 54902 bytes. ---------------------------------------------------------------------- Date: Sat, 07 Aug 93 22:09:03 +0100 From: Arkuat Subject: INVEST: Transaction costs Nick Szabo wrote: > Does Harry Browne give an accounting of the transaction costs > involved in his scheme? Yes. > This kind of shuffling ("rebalancing") is how stockbrokers make their > living, by eating big holes in the portfolios of individual investors > (over the long run, and hidden by the ups and downs of the securities > themselves). Churning is usually done more often than once a year, and usually entire holdings are sold or bought, not merely adjusted by selling off part of a holding or adding to one. Browne recommends that at year end, unless a holding is 10% larger or smaller than it ought to be, to just leave it alone. (By his ideal proportions, that would mean don't adjust it if it's between 22.5% and 27.5% of the portfolio.) Also note that if your portfolio is growing, because you have working income and you are adding to it, you can rebalance when you invest. Just buy whatever you have least of, once a quarter or so. Likewise if you are drawing down a portfolio and living in ease, you can rebalance when you withdraw living funds. Just sell whatever you have too much of. > With portfolio sizes below the $10,000's, it is often not possible to > "rebalance" from 30% to 40% stocks, or back, without trading odd lots. > The closest you can come to Browne's scheme without getting > eaten alive by commisions may be to invest in a mutual fund with a mix > and strategy similar to Browne's, if such exist. One does exist, but it's based on a more primitive version of this strategy that Browne was proposing in the late seventies. Holding several mutual funds are what he recommends for small portfolios. He lists seven stock funds (including Manhattan and Scudder Capital Growth), three or four money-market funds, and the Benham Target Maturities Trusts, which are the only long-bond funds suitable for this strategy. None of these funds charge commissions or loads, so transactions cost is essentially the time it takes to place a phone call to an 800 number. "Odd lots" are not a problem with mutual funds. You still take a hit on transactions costs for gold, but these come only once a year and only after major price changes, and you're not selling or buying your entire holding, but just a small part of it. > 2.5%/year is typical growth rate for a low-risk portfolio Browne set up a $100K model portfolio on December 31, 1987. This isn't exactly what I would call small, but it has made about 5% a year *after* accounting for inflation and transactions costs. It uses a 25/25/25/25 split. Volatility of the portfolio taken as a whole has been very low, since the volatility of its individual components tend to cancel out. On July 23, 1993, his model portfolio was valued at $151,246. The model portfolio is composed entirely of mutual funds and gold coins. > You might also lose a fraction of a percent, even in a low-risk > portfolio, if the other market players (typically pros working > on this stuff full-time) have better information than you do. You mean the pros managing the mutual funds you buy? > Unless you have some unique information (important enough > to significantly effect the security price _and_ not known to most > investors at the time of purchase), a well-diversified mutual > fund is much safer than trying to guess the market yourself. Whoever said anything about "trying to guess the market"? What do you think I am, stupid? ;) Mutual fund managers are good at diversifying *among* stocks, within the stock market. They are not very good at hedging against the possibility of major economic disasters, however, and major economic disaster is what the original question was about. (E. g. "What if interest on the national debt surpasses tax revenues?") Besides, there's a pretty major qualitative difference between the hedging characteristics of gold coins in a safe in your house and gold mining stocks in your mutual funds. In case of real trouble, the latter would not do you much good. Personally, what with what the gold market has been doing for the last four months and what the long-bond market has been doing for the last three years, I can't say I feel too bad about having bought into these markets alongside my stock mutual funds. My own stash is less than 15K right now, and I don't have much trouble with transaction costs. Eric Watt Forste PGP: 0x431347 HEx: ARKU "Expectation foils perception." --Pamela C. Dean ------------------------------ Date: Sat, 07 Aug 93 22:12:08 +0100 From: Arkuat Subject: For My ExtroPositivist Critics Ray Cromwell wrote: > I haven't seen anyone suggest that mathematical/logical axioms have to > be testable. I liked Anton's suggestion that axioms are indirectly testable by looking at the predictions made by the systems built on them. (Here, Anton, I'll take care of it for you: HEx symbol = ANTON ;) While pure mathematics doesn't predict anything about reality, epistemology and metaphysics might. And I think that epistemological and metaphysical axioms are the ones Tim* is interested in. > You are claiming that metaphysical/mathematical/logical axioms are > testable. They are not. As axioms, they must be accepted on faith alone. Wow. "They must be accepted on faith alone" really jerks *my* knee. > You don't test the truth of axioms, you assume their truth. As long as > there is no contradiction formed by a set of axioms (i.e. they are > self-consistent) there is no problem. *And* as long as the system that the axioms lead to does not obviously diverge from what we observe in reality, there is no problem. I think this was Anton's point. > Your "test" of axioms by attempting to negate them without their > presupposal...(stuff elided)...does nothing to show their relation with > reality. Yes. Which is why tautologies (e. g. "Existence exists") are not very useful as axioms if you want the resulting system to say anything about what we observe. Let me just say here that I don't share Tim*'s enthusiasm for the old-fashioned rationalist approach to epistemology and metaphysics. I tend to default to Popper-influenced empiricism, as I suspect many others on the list do. But for those people who find metaphysical questions interesting (Tim* seems to, maybe most extropians do not), Popper-influenced empiricism alone is not very satisfying. I think that rationalistically derived systems of epistemology and metaphysics (if they are to be useful at all) end up saying things about physical reality and our perception of it. And if they end up saying things about physical reality and perception, then we can test those predictions against observation. We may not be able to pinpoint the faulty axiom if the system fails the test of observation, but ultimately, what we would be testing in such a case would be the set of axioms at the base of the system. This presumes flawless reasoning powers, of course: if our logic is faulty, correct axioms could lead to incorrect predictions. Eric Watt Forste PGP: 0x431347 HEx: ARKU "Expectation foils perception." --Pamela C. Dean ------------------------------ Date: Sat, 7 Aug 93 23:33:12 PDT From: szabo@netcom.com (Nick Szabo) Subject: INVEST: Transaction costs Arkuat: > Browne set up a $100K model portfolio on December 31, 1987... > On July 23, 1993, his model portfolio was valued at > $151,246. The model portfolio is composed entirely of mutual funds and > gold coins. The usual tricks. What's the portfolio worth if it started on August 31, 1987? How many other "model portfolios" does Browne have lying around and how much are they worth? Let's look at some real periods, like 1970-1993, across several bull and bear markets, you would have earned less than that 2.5%/year on a typical portfolio diversified across stocks, bonds, gold, t-bills. 1950-1970 was better, about 3%/year but it's not clear that the West will get those kinds of years again anytime soon. Current lowest-risk yields (there's no such thing as risk-free, no matter how diversified you are) are about 1%/year after inflation, reflecting the recession (which may turn out to be a quite long-term problem, who knows). If your portfolio is small you can easily pay >1%/year in transaction costs and end up losing money. (All numbers are means (averages) and after inflation. Of course you can pick your dates carefully, point to lucky investors, etc. and prove any fabulous claim). (BTW gold + mutual funds is poorly diversified; in the Great Depression, stocks and gold tanked at the same time, then adding insult to injury gold was confiscated). Nick: > > You might also lose a fraction of a percent, even in a low-risk > > portfolio, if the other market players (typically pros working > > on this stuff full-time) have better information than you do. > You mean the pros managing the mutual funds you buy? No, I'm talking about part-time amateurs picking stocks or commodities themselves (including gold, not to mention bullion vs. coins), against full-time pros with heavy hardware (most trading and financial analysis is done by software these days -- financial ratios, arbitrage spreads, and thousands of more subtle dependencies calculated millions of times faster than any human can figure 'em out). If you are lucky a big chunk of the bid/ask spread is all you will lose (that's already often a significant fraction of 1%/trade, but most amateurs don't even think of counting it as a transaction cost, or even realize what they're missing. "Sell at the market", indeed). Mutual funds are much better, since there the pros are playing on your side (still taking a cut, but one you can measure and agree to ahead of time). In any case the knowledgeable market players take their cut, and the typical small portfolio will be lucky to get that 2.5%/year. If the individual tries their own diversification scheme they will get eaten alive by transaction costs and the superior knowledge of pro market players. If they don't diversify they of course stand a good chance of getting wiped out. Point being, real life is not as easy as in the books. > Whoever said anything about "trying to guess the market"? Lots of folks here have been talking about "cypherpunks success investments", investing in gold, etc. All involve guessing the market, trying to play against the pros. In fact, that's very hard to avoid -- even going for mutual funds vs. commodities vs. money market is a subtle guessing game where folks like George Soros will take their little cut. George Soros (or more to the point, his staff of math whizzes, hackers, financial gurus, and billions of MIPS of computers) knows much more than you do about how much money which central banks are or are not printing, etc. So I'm not saying so much don't play the game, since you have to play the game, as (a) don't expect you know more and can beat the pros at the typical games they have made a career out of, and (b) count your own pennies yourself -- don't go for simplistic "diversification" schemes until you've tallied up your transaction costs. Transaction costs dominate over the long term for the individual investor, and you're looney tunes if you think you can diversify away your risk without giving most of it away to your broker (on average). On the other hand, as I said before, if there is information you have that other investors don't -- about a specialized technology, a new startup, a data-destroying bug in a major piece of software, etc. -- by all means bet on it. Find your edge. Figure out what you know that the other guy doesn't. This stuff about gold, interest rates, money supply, diversification, etc., we may think we have great politically correct opinions on them, but political correctness is what these pros eat for lunch as part of their jobs, and they will kick your ass if you give them a chance. ------------------------------ Date: Sun, 8 Aug 93 02:30:41 EDT From: fnerd@smds.com (FutureNerd Steve Witham) Subject: HUMOR: AI is HERE AT LAST! > There is a RACTER-like AI program running around in the sci.* groups > (mostly sci.math, sci.physics, sci.space) with the handle S.H. ... After preliminary research at the Usenet archives here at Software Maintenance and Development Systems, Inc., I'm convinced S.H. is a human being who doesn't speak English very well, doesn't know netiquette or how to work his software very well, and has some missing social skills, and lots of quazy energy. > Still, some people are actually fooled by it and try to flame it. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ If this post was actually a joke, I was fooled. I wish it had been true; I've always wanted to see RACTER put on the air... -fnerd quote me ------------------------------ Date: Sat, 7 Aug 93 23:44:43 PDT From: szabo@netcom.com (Nick Szabo) Subject: Netcom expands to Seattle, Boston, etc. >From Tim May, via the cypherpunks list: Cypherpunks in Washington, Boston, Atlanta, Dallas, Seattle, (and if someone wants to forward this to the Extropians list, which I am temporarily taking a break from, I'm sure some of them would be interested) The Internet service I use, NETCOM, is expanding into these cities, offering flat-rate service for $17.50 a month (if paid by credit card). I have no connection with them except for being a satisfied user. Many hacker friends of mine have NETCOM accounts, even if they have ordinary corporate addresses as well (at a Bay Area Extropians lunch, about 8 out of the dozen folks had NETCOM accounts). After all, NETCOM can't lay you off, can't complain about what you say, and essentially can't be leaned on by the Feds (not yet tested, but likely). A useful service. Some people use it mostly for their mail, and then just telnet to NETCOM to grab it. (NETCOM provides 5 MB for your files, but charges beyond that.) NETCOM also carries every newsgroup I've ever heard of, 4560 of them at last count, and even carried the controversial group "alt.binaries.pictures.erotica.children," about which I wrote a while back (I mention this mainly to show how much of a hands-off policy NETCOM takes). So far as I know, NETCOM has only kicked people out for advertising competing Internet services blatantly, in the netcom.* locall groups. Everything else seems to be fair game. (Some of the most notorious Net bozos are NETCOM folks, indicating further the freedom we have....I can't imagine any user on NETCOM being "disciplined" for racist, sexist, homophobic, or speciesist remarks.) And a full range of editors, newsreaders, mailreaders, ftp access, telnet, etc...all the usual stuff, managed well. There are usually enough modems to allow me to get on anytime I want to. And, to repeat, there are no connect charges and no time limits. If you're within the local call range of the nearest POP, you can stay logged-on as long as you like with no charges. It changed my life, no kidding. Here's the announcement: Xref: netcom.com netcom.announce:86 netcom.internet:1191 netcom.general:10006 Newsgroups: netcom.announce,netcom.internet,netcom.general Path: netcom.com!info From: info@netcom.com (Netcom Information Account) Subject: NETCOM expands coverage Message-ID: Organization: NETCOM On-line Communication Services (408 241-9760 guest) Distribution: netcom Date: Fri, 6 Aug 1993 04:29:29 GMT Approved: Info Lines: 86 FYI: NETCOM On-line Communication Services, Incorporated is pleased to announce the expansion of the NETCOM backbone into Seattle, WA, Dallas, TX, Atlanta, GA, Washington, DC, and Boston, MA. Each of the new Points of Presence (POPs) will support a full range of network services including: o Internet Connections (T1 & 56kb dedicated and dialup) o News/Mail feeds with Domain service o Business Dial-up access (news/mail/ftp/telnet/shell) o Host dial-up (stock reports, US News, news/mail/ftp/telnet/shell) o Personal Network (SLIP/PPP) Connections (PNC) o FrameConnect Internet Services NETCOM can be your gateway to economical communications world wide. A connection to the NETCOM state-of-the-art network will deliver connectivity at very affordable prices. NETCOM offers Internet connections, news feeds, electronic mail, local access points throughout California, source archives, large discounts on communication equipment, consulting, and everything you would ex- pect from a leading communications service provider. To access the guest account, make sure that your communication settings are 8-1-N and use vt100 for a terminal emulator. After you connect, log in as "guest". Remember, you must use lower case letters. You can also log in via telnet by using netcom.netcom.com or an IP address of 192.100.81.100. The fol- lowing are a few of the local access 1200/2400/9600 V.32/V.42 numbers: o Atlanta and greater Metro area (Aug 31) ........ (404) 303-9765 o Boston and greater Metro area (Aug 31) ........ (617) 237-8600 o Washington DC, Falls Church, Arlington, Vienna, Reston, Alexandria, Fairfax, McLean (Aug 31)..... (703) 255-5951 o Dallas, TX ...................................... (214) 753-0045 o Seattle, Bellevue, Bothell, Bothell-Duval Des Moines, Halls Lake, Issaquaah, Kent, Kirkland, Renton, Richmond Beach, Maple Valley ............. (206) 547-5992 o Portland, Beaverton, Burlington, Forest Grove, Corbett, Gresham, Hillsboro, Lake Oswego, Sandy, Redland, Scholls, Stafford, Sunnyside, Tigard .... (503) 626-6833 o San Francisco, Sausalito, San Mateo, Foster City (415) 985-5650 o Sacramento, Folsom, Orangevale, Citrus Heights, Rancho Cordova, Carmichael ...................... (916) 965-1371 o Los Angeles, Inglewood, Beverly Hills, El Segundo, Santa Monica, Manhattan Beach, Van Nuys, Culver . (310) 842-8835 o Irvine, Anaheim, Fullerton, Laguna Beach, Orange, Santa Ana, Westminster ........................... (714) 708-3800 o San Diego, El Cajon, La Jolla, La Mesa, Linda Mesa, and Mira Visa ................................... (619) 234-0524 o Santa Cruz, Scotts Valley, Bolder Creek ......... (408) 459-9851 o San Francisco, Berkeley, Oakland, Albany Richmond, Alameda, Piedmont, Belvedere, Orinda, Moraga, San Pablo, Lafayette, Emeryville, & Brisbane ...................................... (510) 865-9004 o San Jose, Campbell, Almaden, Cupertino, Los Gatos, Saratoga, Sunnyvale, Santa Clara, & Milpitas .... (408) 241-9760 o Stanford, Mt View, Los Altos, Menlo Park, Palo Alto, Redwood City .................................... (415) 328-9940 o Pleasanton, Fremont, Hayward, Livermore, Bishop, San Ramon, Dublin, Newark, Danville, Sunol, and Bishop Ranch .................................... (510) 426-6610 VOICE: (408) 554-8649 FAX: (408) 241-9145 Local Access Numbers: (800) 488-2558 _____________________________________________________________________________ info@netcom.com (408)554-8649 NETCOM On-line Communication Services, Inc. -- -- ------------------------------ Date: Sun, 8 Aug 93 02:45:23 EDT From: fnerd@smds.com (FutureNerd Steve Witham) Subject: I have to get out of this society NOW... > ...I pinched the flyer because of the bizarre illustration on it: > an anthropomorphic Bible, complete with big googly eyes, arms, legs, and a > cheery smile, with "Holy Bible" on the spine, holding aloft a flaming > sword. "Marching to Shibboleth" indeed. > > Is it just me, or are we living on the Planet of the Apes? > dV/dt Or in "Don't Crush That Dwarf, Hand Me the Plyers" by the Firesign Theatre? Or is that a real Hymn? Marching down to Shibboleth, With the Lion and the Sword, Praising Zion to the death, Until we meet our last reward... -fnerd quote me Ersatz Brothers! It's got zest appeal! ------------------------------ Date: Sun, 08 Aug 93 01:43:59 +0100 From: Arkuat Subject: INVEST: Transaction costs Your caution is admirable. Your unwillingness to give me the benefit of the doubt, to conceive that I might be as cautious as you are and that I might have already checked out the objections you raise is not quite so. You seem to be putting a lot of energy into attacking a book you've never read. The book is "Why the Best-Laid Investment Plans Usually Go Wrong". If you haven't read it, why do you care so passionately about demolishing it? Browne spends the whole first half of the book warning about the same tricks you warn about, the backfitting and backcasting, the bogus predictions that never pan out and are never recalled, the carefully fitted hypothetical portfolios that never really existed but look great on paper, the impossibility of predicting the future, etc. etc. etc. > The usual tricks. What's the portfolio worth if it started on > August 31, 1987? How many other "model portfolios" does Browne > have lying around and how much are they worth? There are a few other hypothetical ones, and they show similar performance. December 31, 1987 just happens to be the date he started tracking a *specific* bundle of investments in his newsletter. This is not backcasted or backfitted. He set the thing up at the end of 1987 and has been tracking it since then. I know about "the usual tricks"... if this were that, and I posted to the list about it, I'd be some idiot, eh? Since gold jumped and short-term interest rates on cash soared while stocks were crashing and bonds were withering in 1987, Browne's portfolio (backcast, again) suffered a small downward blip in October, and fully recovered by the end of the year... much better performance than someone who was all in equities would've had. > Let's look at some real periods, like 1970-1993, across several bull > and bear markets, you would have earned less than that 2.5%/year on a > typical portfolio diversified across stocks, bonds, gold, t-bills. Wrong. I'm sorry, you can go look this up. It's still about 5% after inflation for the whole 23-year period. Perhaps you aren't taking into account the buy-low/sell-high effect of the year-end adjustments. Of course, the portfolios covering this period are hypothetical and "backcast", unlike the one I cited to begin with, which starts in 1987 but has the advantage of being real. > If your portfolio is small you can easily pay >1%/year in transaction > costs and end up losing money. You keep fretting about transaction costs. My stock funds, my long-bond funds, and my money market funds all have 800 numbers. When I want to invest, I mail them a check. When I want to sell, I make a phone call. There are no loads, charges, or commissions. Other than the spread on gold, what transactions costs are you talking about? > Of course you can pick your dates carefully, point to lucky investors, > etc. and prove any fabulous claim. Of course you can. And of course I've checked this out before posting this to the list. I know this kind of behavior is *very* common, but it's not what Browne appears to be doing. > (BTW gold + mutual funds is poorly diversified; in the Great > Depression, stocks and gold tanked at the same time, then adding insult > to injury gold was confiscated). And long government bonds did very well indeed, thank you, but you seem to be ignoring their inclusion in the strategy I described. I've already acknowledged that gold and stocks sometimes move in the same direction; that's why the bonds are in there, and that's why they are volatile long bonds. There are ways to store gold to make it difficult or impossible to confiscate, and Browne recommends these ways. People who keep gold in a safe deposit box at a bank might as well just sell it and put the proceeds into a money-market fund. > No, I'm talking about part-time amateurs picking stocks or commodities But I'm not *picking* anything. Where did I ever talk about *picking* anything? If I were to say, "buy gold when such-and-such, but then sell all your gold and buy stocks when thus-and-so" I'd be talking about picking. But that's not what I've been saying. I'm just talking about buying and holding a diversified basket of investments, and annually adjusting for changes in prices... which is just profit-taking, after all. > If you are lucky a big chunk of the bid/ask spread is all you will lose > (that's already often a significant fraction of 1%/trade, but most > amateurs don't even think of counting it as a transaction cost, Was I ever talking about most amateurs? Was I ignoring the bid/ask spread on gold coins? I was not: in fact, I mentioned in a previouos post that gold is the only investment where I run into transaction costs, and I don't pay commission on gold coins. Bid/ask spreads on gold coins *are* my transaction costs, and the amount of gold coins I buy or sell in a year amounts to less than 5% of my whole portfolio. So the spread on that is, what, 1/500 of 1% of my portfolio? Hardly enough to keep me awake at night. > In any case the knowledgeable market players take their cut, and the > typical small portfolio will be lucky to get that 2.5%/year. Guess I must be lucky then. Your theory doesn't match my experience. > If the individual tries their own diversification scheme they will get > eaten alive by transaction costs and the superior knowledge of pro > market players. What transactions costs? 1/500 of 1% of the portfolio in a year? Where does superior knowledge enter into a dumb buy-and-hold at-fixed-percentages strategy? > Lots of folks here have been talking about "cypherpunks success > investments", investing in gold, etc. All involve guessing the > market, trying to play against the pros. I'm not among those "lots of folks". Some people, like Perry, like to pick their own stocks. I might like to someday, but for now, I'm in mutual funds. Buying gold as part of a *package* that includes long T-bonds and is mostly stocks doesn't require any market timing or guesswork. > (a) don't expect you know more and can beat the pros at the typical > games they have made a career out of, and (b) count your own pennies > yourself -- don't go for simplistic "diversification" schemes until > you've tallied up your transaction costs. I don't know why you assume I am making these mistakes. I hope I've made it clear by *now* that I haven't been. Is it possible you're having a knee-jerk reaction to the word "gold"? Eric Watt Forste PGP: 0x431347 HEx: ARKU "Expectation foils perception." --Pamela C. Dean ------------------------------ Date: Sun, 8 Aug 93 04:26:28 EDT From: fnerd@smds.com (FutureNerd Steve Witham) Subject: The Age of Robots > Steve Witham writes: > > >The thing I wonder about property is, will it remain a necessary part > >of reputation maintenance to keep (subjectively) age-old contracts > >with slow folk, or will it start to seem like keeping a promise to a > >gigantically rich frozen dog with no owner? & Robin Hanson sez- > Why do we all keep our contracts with billionares now? Surely they > haven't the physical strength to defend their wealth. It requires a > high degree of coordination for all of "us" to agree to no longer meet > our expected obligations to all of "them". I was going to say that human billionaires (sp??) can move fast enough to call the cops, but the image that springs to mind is some invalid and his or her lawyer. The lawyer (& other people around the person) moves fast and protects the person's interests. Everyone's double- checking the others. I mean I'm slowly getting the point, Robin. > Sometimes such > "revolutions" have been possible, especially when all of us live in > one place and all of them in another, and has happened across the > rich/poor and slave/free divides. Morevac's earth/space divide > would seem to provide the maximal chance of such a scenario. But when > us and them are all mixed up this is much less likely. But there is a slow/fast divide. The slower and stupider they get, the less they would seem like people, and the more time people would have to hatch plots. "Just sign here, Mrs. Smith." Is this plausible? This is turning into a parable for thinking about the whole idea of property. -fnerd surround me with quotation marks suffuse me with cryoprotectants suspend me in liquid nitrogen separately do not bury me in clover ------------------------------ Date: Sun, 8 Aug 93 11:20:00 -0400 From: jamesdon@jamesdon.infoserv.com Subject: eceived: by jamesdon.infoserv.com (UUPC/extended 1.11q); Sat, 07 Aug 1993 21:56:35 PST Date: Saturday, 7 August 1993 21:37:07 PST8 X-Mailer: TMail version 1.13 From: "James A. Donald" Sender: James A. Donald Message-ID: <2c649593.jamesdon@jamesdon.infoserv.com> Organization: The Liberty Trust References: <9308071839.AA05879@goren1.u.washington.edu> Subject: Re: Divine Right of Kings, late comment To: extropians@gnu.ai.mit.edu In <9308071839.AA05879@goren1.u.washington.edu>, inigo@u.washington.edu (Inigo Montoya) wrote: > The history of the Divine Right of Kings having been > recapped nicely already, I thought I'd mention that this is > one thing the Church dreamed up which they didn't have a > lot of trouble finding Scriptural backing for. > > Romans 13:1-7 > I might further add that variants of this theory (rulers have backing > by God, Heaven, the First Cause, etc., or they wouldn't be > in power) are very common historically -- the other well > known version being Chinese, and predated Confucius (altho > he expounded it clearly). It is always a two edged sword, > however, as anyone leading a rebellion need only > convincingly claim to be God/Heaven's Sword of Judgment > against the Evil King. This is not what is usually referred to as the "Divine right of Kings" theory The theory that is usually referred to as the divine right of Kings theory was that the rightful king was rightful by succession, not divine appointment. The theory that God appointed the ruler always had the disturbing implication that God might dismiss the ruler for misconduct, hence a ruler could only be rightful if he performed the duties of a ruler, that is, if he upheld the law, rather than if he was the law, and so forth. The theory that the ruler is to be obeyed if he is the rightful ruler, *and* he is the rightful ruler if he is able and willing to perform the duties of a King, is not at all what most people mean when they talk of the divine right of Kings. The Church undoubtedly preached the conservative doctrine that existing rulers ruled rightfully, even when it was plain to any fool that they did not, that they were abusing their powers and failing to perform the proper duties of a king, but the church was not to blame for the divine right of Kings theory. That was a royal, not a church, creation. (The church committed immense evils, but it was not to blame for the divine right of Kings.) The Church theory was that existing rulers ruled by law. The Divine right of Kings theory was that the King *was* the law. The theory that the King has divine authority *provided* he does the job that God appointed him to do, was not an oppressive or authoritarian theory. The "divine right of Kings" was subtly different, although it sounded somewhat similar to the standard theory. It was an oppressive and authoritarian theory. It conspicuously failed to convince most people, other than the King and his courtiers, hence the dynasties that adopted it were soon overthrown. According to the software toolworks encyclopedia, and my own recollection of history, the only significant divine right monarchs in Europe were: James I of England, claimed divine right, attempted to form a modern police state, fled Charles I of England, claimed divine right, attempted to exercise divine right, executed. Louis XIV of France, claimed divine right, but did not attempt to exercise it. His example, the fact that he survived claiming divine right, lead several other less important kings to claim it. Louis XV of France, claimed divine right, did not attempt to exercise it, but was executed anyway, ending the theory. Thus claims of divine right went from about 1680 to about 1735. Divine right was a short lived doctrine that lasted about as long as communism lasted, and failed for the same reasons. (Moral outrage, not economic inefficiency.) In another posting on this topic I post the relevant quotes from the Software toolworks Encyclopedia. --------------------------------------------------------------------- | We have the right to defend ourselves and our James A. Donald | property, because of the kind of animals that we | are. True law derives from this right, not from jamesdon@infoserv.com | the arbitrary power of the omnipotent state. ------------------------------ Date: Saturday, 7 August 1993 22:12:32 PST8 From: "James A. Donald" Subject: PHIL: Divine right of kings vs. natural rights? > Phil G. Fraering wrote: > > > Let me ask a stupid question. I know where everyone says > > the idea of the Divine Right of Kings came from. But where > > did it really come from? In <199308071104.AA01169@joes.GARAGE.COM>, arkuat@joes.garage.com (Arkuat) wrote: > > It was cooked up by local bishops who allied themselves with the early > Holy Roman Emperors against the Pope, essentially to put the Emperors on > equal footing with the Popes politically. This particular conflict goes > back to the days of Charlemagne and flared up particularly under the > Hohenstaufen emperors, especially the Saracen-sympathizer Frederick I > AKA Barbarossa. You may be using the phrase divine right in a non standard way here. According to the software toolworks encyclopedia, and my own dim recollection of history, the only significant divine right monarchs in Europe were: James I of England, attempted to form a modern police state, fled. Charles I of England, attempted to exercise divine right, executed. Louis XIV of France, claimed divine right, but did not attempt to exercise it. Survived the claim, inspiring other monarchs to make similar claims. Louis XV of France, claimed divine right, did not attempt to exercise it, but was executed anyway. > Thereafter, it was usually invoked when some king or > another wanted to assert control over the local church, > again, more to put the Pope into a position of weakness > than the king in a position of strength. I think Henry VIII > may have brought it up in the course of creating the Church > of England. I do not believe he used the phrase or the concept. Divine right is radically incompatible with feudalism, a fact of which the feudal lords were very much aware, during the brief period when European monarchs were tempted to claim it. The Software Toolworks Illustrated Encyclopedia (TM) (c) 1990 Grolier Electronic Publishing, Inc. divine right According to the doctrine of divine right, which reached its peak of influence in 17th-century Europe, sovereigns were given their right to rule by God and were thus not accountable to their subjects. The English political theorist Sir Robert Filmer (c.1588-1653), author of Patriarcha (1580), was a principal exponent of this doctrine, which had evolved partly to check papal incursions into politics. Many of the policies of JAMES I and CHARLES I of England and LOUIS XIV of France were justified by invoking the theory of the divine right of kings. Bibliography: Figgis, J. N., The Theory of the Divine Right of Kings (1896; repr. 1965). The Software Toolworks Illustrated Encyclopedia (TM) (c) 1990 Grolier Electronic Publishing, Inc. monarchy Monarchy is probably the oldest form of government; most early peoples knew no other system. The anciet Greeks and Romans established republics, but these eventually gave way to monarchies. Absolute monarchs assumed a new importance in Europe during the 16th and 17th centuries, when the nation-states were formed. Monarchs such as Louis XIV defended their right to rule with the doctrine of DIVINE RIGHT. --------------------------------------------------------------------- | We have the right to defend ourselves and our James A. Donald | property, because of the kind of animals that we | are. True law derives from this right, not from jamesdon@infoserv.com | the arbitrary power of the omnipotent state. ------------------------------ Date: Saturday, 7 August 1993 21:59:13 PST8 From: "James A. Donald" Subject: PHIL: Divine right of kings vs. natural rights? In <9308070128.AA10470@srl02.cacs.usl.edu>, pgf@srl02.cacs.usl.edu (Phil G. Fraering) wrote: > 2. What should I read next? What would be some good, cheap, > primary sources? (Besides Plato; I'm a little upset with him > because I'd like to know what Socrates really thought). The Histories, by Herodotus Lives of the noble Greeks and Romans, by Plutarch. The Persians, by Aeschylus --------------------------------------------------------------------- | We have the right to defend ourselves and our James A. Donald | property, because of the kind of animals that we | are. True law derives from this right, not from jamesdon@infoserv.com | the arbitrary power of the omnipotent state. ------------------------------ Date: Sun, 08 Aug 93 17:31:11 GMT From: bob_g@eris.demon.co.uk (Robert D Grahame) Subject: ECOMAD: Gaia Liberation Front Madness I though you all might like to know how far some of the Eco-nutters have gone in the direction of dangerous nonsense. In the 'Feedback' column of the UK magazine New Scientist, 7th August 1993, I found the following madness :- (extracted without permission) ============================== On 23 May last year we reported on an organisation called Vegans Against Creating Children. At the time, the existance of a group opposed to the continuation of the human species seemed merely eccentric. Now we begin to wonder. 'Social Innovations - A Compendium', the latest publication of the London based Institute for Social Inventions, reproduces (without comment) a converstaion called 'These Exit Timnes' from Portland, Oregon, in the US. Les Knight of the Voluntary Human Extinction Movement is having a chat with someone called 'Geophilus' of the Gaia Liberation Front. "While we support all voluntary efforts to make the humans extinct," said Geophilus, "we do not exclude the involuntary route. At the rate that the humans are killing the Earth ... a decision not to reproduce, even if adopted by every new human ... would be just too damn slow." "What involuntary methods do you have in mind?" Knight wonders. "We support, for example, involuntary sterilisation," muses Geophilus, "but we would also welcome the escape of any new anti-human viruses - such as the airborne version of AIDS [sic] that might result from AIDS research on mice." Geophilus goes on to give his or her support for the idea of racial genocide: "If you want the humans to die out, is it so awful that some of them die out before the rest? Of course, if I knew that someone had targeted a particular race, I'd be happier knowing that that race was my own, because that's the one that's doing the most damage. But if it weren't, I wouldn't be unhappy, just less happy." Knight finally comes out with a question that was also strongly in Feedback's mind while reading the above: "Why don't you just commit suicide?" Surprise, surprise, Geophilus has an answer to this: "In my judgement the good I'm doing by promoting the idea of human extinction outweighs the harm I'm doing by staying alive." Rather debatable, Feedback thinks. ============================== As indeed do I. -- Bob Grahame, Streatham, London. LAN Consultant -- Voice :- +(44)71 406 7795 : PGP 2.2 Key available ------------------------------ Date: Sun, 8 Aug 93 14:31:02 WET DST From: rjc@gnu.ai.mit.edu (Ray) Subject: ECOMAD: Gaia Liberation Front Madness On many occasions I have commented on the the anti-extropic values in the environmental movement, but this newest radical group is the most extreme I have seen. Predictably, they want everyone else to die except themselves. The excuse "By doing X, I am doing far more good than Y" is a cop-out. On two seperate occasions I have been given the same response by eco-nuts. One after I asked the question, "if technology is so bad, why don't you stop using computers?" and another after I said "if you wish everyone lived a tribal/farmer existence, why don't you get off the net and start living by your principles to see how you like it." Recently I found a post on the net called "ecofeminism" which advocated a neanderthal lifestyle but did so by trashing the concepts of utility and progress. e.g. what's so good about progress?, westerners view things in terms of utility, what use of things can be made, whereas ecofeminists believe all things have an intrinsic value in themselves. It went on to claim that women's views were naturally better because they give unconditional love and nurture things. (translation: us westerners are evil because we think only in terms of how we can use objects and people!) I expect I will be flamed again for stating the obvious implications of these ideas (a rehash of the 'Earth Day' flamewar) but I stand by my opinion. The environmental movement will be a serious force for extropians to reckon with in the future. It goes far beyond normal socialism and its ultimate goal is not to protect human lives or an abstract notion of human "society" but ecosystems. (it seems socialists are constantly expanding their sphere of who they are going to take care of and protect) I'm sure many of you who have read Rand at early age see death and misery in many of the left's ideals, I submit the post I am responding to as just more anecdotal evidence. -Ray -- Ray Cromwell | Engineering is the implementation of science; -- -- EE/Math Student | politics is the implementation of faith. -- -- rjc@gnu.ai.mit.edu | - Zetetic Commentaries -- ------------------------------ Date: Sun, 8 Aug 93 11:36:18 PDT From: szabo@netcom.com (Nick Szabo) Subject: INVEST: Transaction costs Low bandwidth strikes again. My purpose was not to attack Browne in particular, but to critique pop strategies for individual investors in general, and point out fallacies that are repeated over and over again in that literature. From the posted claims it seems that Browne has a scheme that actual goes pretty low on the transaction costs, relative to the rest of the lot. I applaud that, since as I pointed out transaction costs are the biggest impact on the return of your investment that you can (for the most part) confidently predict and control. For the average investor's lowest-risk rate of return (2.5%) transaction costs of 1.5%/year can cut portfolio size after 100 years by over a factor of 4. No other controllable factor will have nearly that kind of impact, on average. No-load funds are indeed a good way to minimize transaction costs (but look at the annual statements to see how much management costs are cutting into the fund's rate of return). My only remaining gripe with Browne (from the posted information) is the (implicit? explicit?) belief that one can double the 1970-93 lowest-risk investment performance (c. 2.5%) simply by doing year-end "rebalancing" of the portfolio. You can lower risk that way, and seemingly without major transacation costs of the kind I discuss that eat most individual investors alive (1%+/year), but expecting such a simple scheme to generate a greater return than the overall market, dominated by pros who have studied millions of variations on this and thousands of other schemes in mathematical detail, is hocus-pocus, IMHO. But Browne again looks pretty good here compared to claims of "risk-free" 10% or more per year from other pop gurus. Opportunties to beat the market happen, quite often, but the chance that the indy investor will hear about them without doing their own homework and using their own unique specialized knowledge, are no better, and probably less than, the chances they will be sold on garbage dressed up as such an opportunity. > There are ways to store gold to make it difficult or impossible to > confiscate At what cost? What are the chances of somebody (freind, neighbor, family member, houseguest, plumber, burglar, etc.) finding that cache of gold in the firewall and obsconding? Perhaps less than the chance of the state rading bank safe deposit boxes, but has anybody collected statistics? (The firewall trick is from Mark Skousen). > But I'm not *picking* anything. Yes, you are. The 5%/year claim is an explicit claim that by picking certain securities, one can beat the market. (As opposed to the more reasonable claim that one can use it to diversify and lower risk with minimal transaction costs, which is a quite attractive prospect and the most important point the Browne scheme seems to have in its favor). > Bid/ask spreads on gold > coins *are* my transaction costs, I assume then you can tell us, what are the typical bid/ask spreads on gold coins? How do they vary with market volume? Does market volume or the bid/ask spread vary in any predictable way (eg seasonally)? Which markets have the lowest and highest bid/ask spreads for the individual investor? Nick Szabo szabo@netcom.com ------------------------------ End of Extropians Digest V93 #219 ********************************* &