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Benevolent Dictators

I'm currently working on a team of data architects.  We usually agree quickly on a given design for most problems, but occassionally we do not.  When there is disagreement, the question becomes whose design wins?  How should we determine the "winning" design?  If the debate drags on too long the team's velocity comes to a crawl.  

In other situations there is a designated "lead architect" whose design approach may not match what most other team members feel is correct.  But again, on-going debate causes velocity to suffer, tensions to flare, etc.  How do you solve these issues?  

August 15...Happy 40th Anniversary Fiat Currency

This year has been marked by the constant talk of the US "defaulting" on its debt obligations by not allowing the debt ceiling to rise causing the U.S. to not pay some of its obligations including interest payments on bonds.  It's interesting to note that this has occurred in the past, albeit in a different form.  This is the 40th anniversary of the end of the Bretton Woods System, which severed totally any convertibility of the US Dollar into gold.  

Set up after WWII, the Bretton Woods System allowed other countries, but not individuals, to convert their dollars into gold upon demand.  This made the dollar the "world reserve currency" that we all hear about today.  In the early 1970's the US had a huge trade deficit and needed to pay its bills (a huge war in Vietnam) so it decided to print more dollars than it had gold.  Other countries saw this and immediately also tried to devalue their currencies to maintain convertibility equilibrium and protect their exports.  But inflation was getting out-of-hand and soon West Germany pulled out of Bretton Woods entirely and other countries such as France demanded huge amounts of gold from the U.S.  On August 15, 1971 Nixon made the dollar a true, undebatable fiat currency, it had no backing by gold, not even for other countries.  Essentially this means the US defaulted on its debt obligations to other countries, one US dollar was worth, well, one US dollar.  Nixon's famous quote was, "we are all Keynesians now."  

What followed was stagflation (out-of-control inflation coupled with high unemployment...an impossibility according to Keynesians) and the slow march to worthlessness of the US Dollar.  If you want to see how easily and stealthily the government can make your savings worthless and ruin an economy, just watch this video from August 15, 1971.  

At the time an ounce of gold cost $35/oz.  Many pundits predicted gold would fall to a few dollars per ounce since the dollar wasn't propping up gold.  Just last week gold hit an intraday high of about $1800/oz.  Mathematically, that is a 15% annualized return.  However, I don't look at the price of gold as rising 15% per year, I look at it as the value of the dollar has fallen by 15% per year.  Essentially gold isn't really a good investment...but it is a good store of value, something the dollar is not.  

Happy Anniversary!

 

QR Codes vs UPCs

QR codes (QR is an acronym for "Quick Response") are those blocky UPC-like symbols that have become ubiquitous in newspaper and magazine ads for the past year or so.  Any barcode reader with QR software installed (and QR software is available freely and is open-source) can read these things.  It is also an ISO standard.  The real benefit is that camera-equipped smart phones can read these things too, without needing to purchase a Bluetooth barcode scanner.  You can even create your own QR generator for free using a generator.  Here is one.  

The UPC numbering scheme was invented by IBM in the 1930's, but the first scanned UPC barcode symbol did not occur until the mid 1970's.  The QR was created by Toyota in the 1970's and has been ubiquitous in that country for many years.  

Why Use a QR over a standard UPC barcode?

  • I can store more data:  A UPC can store about 20 digits of data.  A QR could store almost an infinite amount of data as scanning technology improves.  As of now you can store about 100 digits of data in the same space as the minimum amount of space required to realistically store 20 digits of UPC data without loss of fidelity.  This is mostly because QR stores data both horizontally and vertically.  The less amount of data you store the lower resolution the resulting QR code.  The more data you want to store, the higher resolution the resulting QR code will be.  This also means that many scanners may not be able to interpret that data, at least as of today.  

An example...the QR code on the left simply embeds my URL, the QR code on the right embeds my URL, phone number, email address, and a small string of text.  Both images are 155x155.  The image on the right would need to be 355x355 to show the information at the same fidelity.  As you can see, as scanning technology improves we can embed tons more information within the QR without changes the QR specification at all.  The same cannot be said for UPC.  

 

  • There is checksumming built in.  So, if your QR code is damaged, perhaps torn or even very dusty, you can probably still retrieve at least some of your data.  Realistically you can lose 30% of a QR code before you can no longer accurately reproduce its message.  UPC also has checksumming, but it is far more rudimentary and is simply there to ensure someone has not modified the UPC.  
  • Barcodes are a more closed system.  You can't just create a barcode, slap it on your product, and expect it to work if you sell your product at the local grocery store.  Barcodes must be obtained from GS1 US, a standards organization that provides UPC numbers and barcodes to businesses.  To apply for a barcode is a cumbersome process starting with the registration of your business and any product you wish to barcode.  There are many barcode creation websites that will charge you a small fee (about $10) and create a barcode for you under their business registration.  This saves you some time and steps, but is not feasible for companies wishing to quickly produce many variants of a new product.  The libertarian in me does not like that we have a government organization controlling UPCs.  A more open system, like QR, will allow flexibility over time.  
  • Embedded encryption possibilities:  I should be able to encrypt information in the QR, and I should be able to use any encryption algorithm I want.  Yes, UPC does this, but like UPC checksumming, is rudimentary.  Here is a Dutch coin that began minting earlier THIS MONTH:

 

 

Note the embedded QR code.  Right now this code points directly to the Dutch mint's website and is a static QR code.  Why couldn't the QR code be dynamic, with embedded encryption, that could be used to identify the coin to determine its authenticity?  This opens up lots of new possibilities.  Granted, it would take some additional cost but counterfeiting possibilities could be radically reduced.  In the US we rely on those special yellow highlighters at checkout counters to determining if newer, larger denomination bills are phonies.  And this technology has probably been broken by counterfeiters already.  Using QR codes could potentially work much better, and as counterfeiters break "QR encryption" newer mechanisms could be embedded quickly.  

Libertarians and traffic lights

When I tell people I'm a libertarian they usually respond, "oh, one of *those* people that are against traffic lights and speed limits."  That disappoints me because there is so much more to it than that.  The fact is, there are various flavors to libertarianism, as with any political group.  Most libertarians can agree on the basics though:

  1. self-ownership...each person has control over his own body.  
  2. homesteading/"first use" principle...the first person to make use out of a natural object then has ownership rights to it.  Everything is property and property rights must be respected. 
  3. the non-aggression axiom...agression and coercion against anyone is wrong.  It violates self-ownership and homesteading.  Anarcho-capitalists, myself included, take this to the logical conclusion that a government is really just an entity with a legal authority to commit aggression.  Because of that government is subject to corruption and violates the non-aggression axiom.  

These are sometimes called natural rights because, frankly, they just make sense to most humans.  Non-believers say that those points are great, but we need government to adjudicate when disputes over property rights occur.  But we really don't because all interactions would naturally occur via contract and contract disputes can be solved using private courts.  There is obviously much more to libertarianism than this.  

When people frame libertarians as "those people against traffic lights and speed limits" I get annoyed.  These issues are so minor in our society that I frankly don't even care.  Well, I recently saw a great set of videos from the UK that prove, using real-world experiments, why all of the basic libertarian principles I outlined above really work.  Traffic is a nightmare in UK urban areas.  So, some towns tried something radical...turning off all of the traffic lights.  Watch the before and after videos.  Listen to people's responses.  Listen to the government traffic officials who admit that this works.  

It turns out the abolition of traffic lights actually does accurately portray libertarianism in a microcosm.  You probably have a few doubts that this works already...let me address them before you watch the videos...where they prove the doubts are unfounded.  

  1. Pedestrians will be killed or will never be given the right of way to cross busy intersections.  It turns out that *most* people naturally are cooperative and respect the inherent "first use" principle of the situation...namely, I was here first, I'll utilize the intersection first.  
  2. People will drive faster without lights.  Nope.  Sorry.  When there are traffic lights people focus on the light at the peril of the pedestrians, bicyclists, and fellow motorists on the road.  We've all hit the gas to get through an intersection where the light was "pink".  
  3. People are naturally cooperative, but government-installed traffic control devices create a priority system that is unnatural to people and violates the principles above.  People don't like it and don't really mind violating traffic laws.  Remove the coercive laws and natural cooperation takes over.  
  4. The disabled/blind are totally screwed.  Just watch Part 2 at 3:40.  A blind man expresses why traffic lights DO NOT WORK for the disabled.  

There are 2 items that totally favor the abolition of government traffic devices:

  1. Pollution...sitting in traffic is not great for the environment.  
  2. Look at the money saved on traffic control equipment and signage and energy.  We can make much better use of that money.  

 

Part 2...at about 1:12 you'll see one of the goofiest traffic patterns/intersections you'll ever see in your life.  Great Britain is known for it's "roundabouts", or in the states we call them traffic circles, but that road is crazy.  Clearly it was designed with traffic lights in mind, yet with the lights switched off you can clearly see people are cooperating without any issue.  Accidents will still happen, as will the disputes regarding liability.  But is that so much different from the current system?  

Hyperinflation

This is an old BBC documentary that outlines the hyperinflation of Weimar Germany in the 1920's.  If you are short of time and just want the fun part, it starts around 3:00 in the second clip.  If you watch the whole piece try to substitute Germany's problems with the current problems we face in our modern world.  Maybe I'm crazy but I can see that hyperinflation could be just around the corner for us too.  Everyone on CNBC and in WSJ will tell you that is an impossibility, that modern central bankers understand monetary policy better than the Germans and that adequate controls are in place to avoid that outcome.  Then why is there hyperinflation in Zimbabwe?  

I especially like how the piece covers how Hitler came to power after the hyperinflation episode.  It would seem to me that something similar may happen to us if the economy does get bad enough.  Will we have a dictator that murders Jews?  Probably not, but I can see more war being the solution.  

Lastly, if you want a really short, yet very thorough explanation of post WWI world finance that explains the flow of money and hyperinflation in a little more detail...try Garet Garrett's A Bubble The Broke the World.  But, when you read it, keep in mind it was written in 1932, because he perfectly foreshadows WWII and the rise of a dictatorial Hitler as the only solution for Germany to get out of it's WWI war debts.  It's just spooky.  You will like this short book.  I suggest all of this works, they are fabulous, both fiction and non-fiction.  If you ever read Atlas Shrugged you will especially like The Driver which many have said is the source and inspiration for Ayn Rand's masterpiece. Frankly I think Garrett's work is far superior and is a much shorter book.  It also teaches you how Wall Street finance really operates behind the scenes.   

 

 

 

The free market can clean up the Gulf of Mexico oil mess...with almost no expense...

...not to mention we could actually pay farmers to grow more grasses instead of using agricultural subsidies to pay farmers to *not* grow their crops.  

Watch this...

 

Whatever it is, I'm against it

I'm told at work that I'm adverse to new technologies.  Well, here's what me and Groucho have to say about that.  

George Reisman's Lecture

I just listened to George Reisman's lecture, for the third time, on a pro-free market solution to the banking crisis.  Unlike some libertarians who jump right to a gold-backed currency and end to fractional reserve banking, Dr Reisman presents a step-by-step approach to how to handle this.  I've never seen a solution such as his presented before.  It's definitely worth 30 minutes of your time. 

A great TED talk

This guy is apparently an ad man.  Don't hold it against him.  He seems to understand Austrian economics very well (even though he may not know it).  

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