The Beautiful Language of Prices

Prices are a language.

The beauty of this reality hit me while on a walk.  I had my phone so I recorded my thoughts in the moment of delight.  I’m often overcome by how beautiful markets are.  It’s almost a spiritual experience when you ponder long enough.

 

How the Internet is Like Language

The power went out, and with it the WiFi, for four hours the other day while a pole was being replaced and again for an hour today while the A/C was being fixed.  It was almost overwhelming how lonely and isolating it felt.

Before you think me too dramatic let me say that we’re currently in a rental house in Ecuador, in a neighborhood that still consists primarily of empty lots or newly constructed but not yet occupied houses and we’re 45 minutes from the nearest city and without a car at the moment.  None of these things feel isolating when the internet is working.  (As an aside, the WiFi here is better than the best I can get back in South Carolina.)

It’s not that I spend all day on the web.  The bulk of my work requires internet and I do use it heavily, but there are many hours every day where I’m reading, exercising, playing with my kids, eating, preparing food, sleeping, or just relaxing when I do not use the internet.  One would think a few hours without WiFi would simply let me switch to one of these activities with no mental stress.  But it didn’t work that way.

The minute it went down I felt trapped in a desolate place, separated from the world.  Not because I wanted to do something specifically requiring the internet at that moment, but because I didn’t have the option.

WiFi provides a kind of invisible psychological ether that connects me to all of humanity.  Just knowing it’s there, at the tip of my fingers through my smartphone, gives me a profound spiritual sense of connection to all mankind and to great ideas and facts and images and more.  It is the subtle substrate that makes me always a part of a network or community, even when I’m quietly reading or sleeping.

In Ecuador we’ve had experiences where we were nearly incapable of communication with the other humans around us due to my deficiency in Spanish and some Ecuadorians rapid speech.  In our current neighborhood there are many French Canadian expats who speak not a word of anything but French.  At times a feeling of fear and disconnection can sweep over you when you realize you cannot share ideas with any of the people around you.  What if you need something?  What if you just want to chat and aren’t up to the exhausting task of sign-language and hackneyed Spenchglish?  You’re stuck on a (metaphorical) island, surrounded by people but without any connective tissue.

The parallels between these experiences are striking.  Geographic proximity and physical presence do not connect us with our world.  Information and a means of exchanging it do.  That is the task language performs.  The internet performs it even better.  It can instantly translate between languages, among its other wonders.  The web is like a performance enhancing drug for language.  It exponentially increases the idea sharing power of words.

This silly idea that the internet and social media have somehow severed human connections or weakened community is an absurdity espoused by those blind to the world around them.  It’s no less ridiculous than claiming, “People used to really connect before language was invented.  Now all they do is constantly stream ideas back and forth with sound waves.”

It’s not even the speaking or web browsing.  It’s knowing you can.  What a powerful connective web for the human race.

Ecuador Update: Random Reflections from Abroad

  • The jungle is nice. Except for all the trees.
  • Hippies from every country are exactly the same.
  • Surfers do very little surfing.
  • Lines on the road are mere suggestions here and nobody takes them.
  • A “speed bump” in Ecuador is a large concrete protrusion on a major highway that, if taken at speeds exceeding roughly 3MPH, will dismantle your entire vehicle and several vertebrae.
  • Johnny Cash is a great English teacher on account of his slow singing.  Though phrases like, “The whirlwind is in the thorn tree” may have limited usefulness.
  • It is grossly mistaken to call underdeveloped living “the simple life”.  Nothing could be further from the truth.  The lack of complex market institutions means the most basic of tasks become incredibly complex.  Getting food, water, medicine, or transportation necessitate various social networks, waiting and hoping on others, massive time and know-how, etc.  Survival amid simple institutions is very complex.  Conversely, highly developed and complex institutions make survival so simple as to require no thought whatsoever.  If you want a simple life, find the most advanced capital structure and complex web of market institutions and live there.  If you want complexity move to the jungle.
  • I vastly prefer Ecuador’s southern coast to the northern coast.
  • The jungle has a very weird and slightly dark vibe to it.  I understand The Heart of Darkness a lot better than I used to.
  • WiFi travels through bamboo a lot better than concrete.
  • Bamboo might be the most amazing plant on the planet.
  • WiFi and cell phones may end up being the greatest advances in human history.
  • Few things in the world are scarier than having a sick child in a remote place.  Also the jungle makes everything scarier.
  • For $40 you can get an excellent children’s doctor to take a quick break from the hospital and come meet you across the street in his private clinic for medical care.
  • For another $10 you can get three different medications from the pharmacy.
  • It cost $70 and four hours round trip to make it to the city to obtain these medical services.
  • I grew up in a town with a totally awesome name: Kalamazoo.  I just found one in Ecuador with an even better name: Jipijapa.
  • Country folk is country folk, no matter where you go.
  • How in God’s name are there so many kinds of fruit I’ve never heard of and several that apparently have no name besides, “Kind of like an orange”, or, “Kind of like a tomato” (translation: nothing like a tomato)?
  • Never have I felt the sheer stupidity of the “buy local” concept more than as a visitor to another country where signs everywhere urge, “CUANDO VAYAS A COMPRAR, PRIMERO ECUADOR!”  As an outsider, and one who is eager to exchange with people in this wonderful place it feels even more petty, inbred, and moronic than when I encounter “Buy American”, or, “Buy local” back home, which I’ve become more numb to.  Free trade is awesome.  Nativism is stupid. Always and everywhere.
  • In many poor towns and villages the houses and land are in great disrepair yet most of the people populating them have near immaculate personal appearance.  Clean, fresh, well-fitted and trendy clothes.  Neatly cut and styled hair.  It is a stark contrast to the dwellings and shops around them.  I don’t know enough to verify, but my hunch is that it’s an excellent example of the insights of people like Peruvian economist Hernando DeSoto.  The houses and shops are in shaky legal standing with regards to ownership, therefore improvements are subject to attract more attention and cost more in taxes, regulations, etc., whereas one’s person and attire have much clearer ownership.  Whatever the reason for the disrepair, it seems clear it is not due to a lack of interest in cleanliness or improvement on the part of most of the residents.  They look better put together than people at an average Target in the Midwest.
  • Do taste buds change with latitude or is instant coffee always this good?
  • If a person who is 10% proficient in Spanish and a person 10% proficient in English can have 80% of a deep, meaningful, hours-long conversation, what are we doing with all those other words the rest of the time?
  • I’m even more intrigued by Ayahuasca than I was before.
  • My laptop has made it known in no uncertain terms that she requires A/C and she’ll throw a hissy fit if her demands are not met.
  • A word about dogs.  Yes, dogs.  The dogs here are ownerless.  Yet they are hardly “wild” in the sense you might imagine.  Never have I seen more docility and friendliness among canines.  In the nicer villages they are healthy, amiable, incredibly relaxed, and utterly harmless.  Yet I have not once seen anyone hit, yell at, or engage in any action remotely resembling training or cajoling any of these creatures.  They put the unwieldy, kid-attacking, frantic-barking, yard-pooping, crotch-sniffing, leash-straining horrendous beasts from my cozy US suburb to shame.  I do not like dogs as pets.  Yet I actually kind of like the presence of dogs wandering and sleeping in the streets here.  It seems the most natural thing in the world.  Perhaps dogs are meant as autonomous human companions, keeping away other vermin, eating the scraps at the fireplace, and lounging around the gates of our dwellings and streets of our neighborhoods, rather than enslaved to chain-linked lots with leashes and newspapers and electric fences and Kibbles and fake “walks” and alternating neglect and indulgence and dog pills and dog counseling and dog daycare?  The pet-loving people of the world act shocked and appalled at my distaste for their dogs.  But who knows, maybe I’m the humane one…

Four Options When Government Gets in the Way of Your Dreams

Four Options When Government Gets in the Way

Illustration by Matthew Drake

 

This article is adapted from a presentation given at FEE and SFL seminars.  Co-authored with James Walpole for The Freeman.

———————

We all want to live free, but we have a problem: governments don’t always want us to.

From seemingly mundane rules (like banning raw milk sales) to the truly horrific (like taking your house from you or throwing you in jail), the state is probably going to mess with you at some point in your life. It will throw taxes and fees and fines and rules at you and erect roadblocks and regulations inhibiting your progress — especially if you’re trying to do something new and innovative.

What can you do?

You do have options. Grave as the stakes may sometimes be, you must first accept this outlook: it’s all a game. If you treat it that way, you’re more likely to find a way forward rather than simply cowering in fear or trembling with anger.

Here, then, are four options when you’re faced with the game of government interference.

1. Play the Game

This is the strategy you’re probably most familiar with. It’s what we’re all encouraged to do. Whether through voting, lobbying, or holding office, you can try to take on the state while playing by its rules. You can try to change it from the inside. This is a strategy we cannot recommend.

In business, this strategy leads to the phenomenon economists call “regulatory capture.” Many companies become involved in lobbying and political action to prevent hostile regulations. It’s understandable. They spend hundreds of thousands of dollars on campaign donations and dinners trying to sway politicians and regulators to delay a vote, join coalitions, or carve out exceptions.

It’s a tough, slow process, one that involves endless compromise of principle and decency, and the few who succeed end up with political power and the ability to gain more. They end up using that power not just to expand their own freedom but to crush the freedom of competitors.

But any changes you make will be temporary. Laws passed in one decade are easily repealed in the next, especially if they limit state power. The bigger loss is a personal one. If you play the game long enough, the game ends up playing you. You become a part of the power structure you were trying to fight.

2. Defy the Game

When the state crushes your dreams, you can fight back. History is full of people who stopped taking oppression for granted and started resisting. Look at the civil rights movement in the United States, the Hungarian revolt against Communist rule, or even Uber’s commercial rebellion.

Today, the ridesharing company is operating illegally in dozens of cities, and it’s already paid hundreds of millions of dollars in fines for its drivers who are caught violating local laws. The company is growing fast enough to absorb the damage, and while governments don’t like Uber, customers love it. In Uber-hostile cities like New York, riders are standing up for their favorite way to get around. The “rebellion” has been a huge success.

But rebellion plays out in more desperate ways in the rest of the political world. For people and companies without the money and reputation of Uber, successfully defying the game is hard. While you can get tremendous satisfaction from sticking it to the man, you might end up in jail. You might be killed. In other words, playing this way means you might run into the real power of the state in its rawest form.

3. Change the Game

Changing the game is about recognizing the incentive structures and putting external pressure on the government to bend. Often, all you need to do to win is to hold the state to its own rules.

But it’s not as easy as it sounds, and the people who try to change the game in this way have to be heroic, if not martyrs. They’re taking the longest route. Game-changers lower the cost of information to the public while raising the cost for government to break its own rules or be thuggish. This group includes lawyers, journalists, public intellectuals, and everyday citizens.

Look at the case of occupational licensing. Municipal and state governments throughout the United States require entrepreneurs to give up money and time to comply with regulations. Many would-be entrepreneurs are stopped dead in their tracks by competition-killing regulations.

Before the Institute for Justice (IJ) challenged the regulation, eyebrow threaders in Texas were required to train for 750 hours before they could set up shop. Before another IJ case in 2011, Texas required bakers wanting to sell cookies to the public to rent commercial kitchen space and obtain food-handling permits.

Changing the game isn’t limited to the courtroom. Governments will break their own rules if they can get away with it. Both IJ cases included concerted efforts to raise public awareness about the unfair consequences of the regulations while simultaneously challenging them in court. These efforts raised the stakes for any judge who wanted to rule for the status quo. It also resulted in politicians jockeying to change the law before the court case was even settled so that they could take credit and benefit from the positive PR. Think about the state lawmakers who jumped at the chance to restrict eminent domain after theKelo outrage.

This is one of the biggest pros of changing the game: if you’re successful, you’ve kept your own integrity, and you’ve helped to protect others from the dream crushers in government.

The problem is that you may not win. You can spend years of your life fighting the battle to change the game and lose — plenty of people have, from the Dred Scott case to the Kelo decision. Even if you do win, the victory is too often short-lived: as soon as public awareness and scrutiny abate, courts will “reinterpret” hard-fought constitutional changes put in place to restrict government.

4. Ignore the Game

Entrepreneurs in the last decade have made international-trade and immigration restrictions less and less important. Today, anyone can telecommute to work in the United States from a call center in India, an Internet cafe in Bangladesh, or a personal laptop in Mexico. These innovations allow labor to move freely, and the inventors never needed to lobby politicians.

You can quit, exit, and opt out of the games government uses to stop you. You can move. You can pull your kids out of school. You can alter your business plan. You can quietly sidestep the obstacles placed before you.

There are major benefits to ignoring the game. For one thing, you don’t have to think about politics. Psychologists and philosophers have long told us to not worry about things not under our control. By ignoring the game, you can be politically ignorant and much happier. You don’t have to fight court battles or Internet comment threads. You can focus on creating, not protesting.

Ignoring the game isn’t always as satisfying as defying it, but ignoring the game offers an immediate sense of personal freedom. It allows you to create a freer life for yourself while providing an example that others can learn from. Over time, if enough people ignore the game, it begins to wane in importance and power.

How Will You Respond?

If your goal is to live free, first understand the game and know the rules. The way you respond to the game is then up to you. The strategy you choose will have more influence over your quality of life than any near-term victory or defeat will.

You may respond to the government in many different ways throughout your life, but if you treat it like a game, it will be less likely to ruin you.

How to Not Let Your Parents Control You

This post is not just for young people.  I’ve known plenty of grown adults with kids of their own who cannot live, act, or think free from their parent’s emotional control.

This is not an anti-parent post.  Most parents mean well.  Many are unconscious of their own forms of manipulation and if revealed to them, they’d prefer to change it.

If you are to create a meaningful and enjoyable life you must break the power of parental control.  It’s a massive psychological burden and it’s sapping your energy, freedom, and fun.

I knew a guy who dated two very different girls.  At some point in both relationships, things got pretty serious.  Maybe this was going to be a long-term thing.

In the first relationship, the girl was smitten but her parents were not.  Not even close.  They did not approve of her dating this guy and they made that clear.  Things were icy.

He’d go with her for family holidays and it always ended the same.  Afterwards, she’d cry and share with him how hard it was to have them unhappy with her choice.  Even if he wasn’t there, every time she’d visit home he knew there would be fallout when she came back.  She’d confide in him just how much it meant to have her parent’s approval of the relationship.  This put tremendous pressure on him to live up to some standard in her parent’s head.

The relationship eventually ended.  It wasn’t too pretty either.

Time passed and he eventually began dating someone seriously again.

In the second relationship, the girl was smitten but her parents were not.  Not even close.  They did not approve of her dating this guy and they made that clear.  Here we go again.  He was nervous. He knew he couldn’t take another situation like the last.

But this time things never got icy.

The very first time his girlfriend’s father voiced his displeasure she said, “This is who I’m dating.  This is who I want to be with.  If you want me in your life you’re going to have to accept the choices that I make.”

Her dad did not disown her.  Instead, he had to overcome his own prejudice and work to get to know they guy.  He did.  Now they’re in-laws.

Consciously or unconsciously, parents can sense your need for their approval.  The stronger and more desperate it is, the more leverage they have to control you.  But the thing is, you’re parents don’t have that leverage in reality.  They want to have a relationship with you just as much or more than you do with them, and this feeling increases as they age.  That’s why if you are definite in your purpose and you make that clear to them, they will nine times out of ten see that earnest resolve and adapt to it.

This makes knowing who you are and what you really want paramount.  If you’re unsure, you’ll just end up issuing a constant stream of threats to your parents, which isn’t healthy for anybody.  But if you really know what you want, you are fully prepared to live the consequences with or without your parent’s support, and you can calmly and clearly let them know, they are very likely to end up supporting you.

You don’t need to disown them.  But let them know their threat to disown you will not stop you.  And don’t bluff.  Don’t pretend to have resolve just because you hope it will win them over.  Be fully prepared and committed to follow your chosen course of action even if they don’t come around.  Paradoxically, it’s only then that they are likely to eventually come around.

They’re not as stubborn as they may seem when it comes down to it.  They want you to be happy, and if it’s clear that you will only be happy pursuing things your own way – and you’re aware of the risk and willing to take it – they’ll stop trying to resist you.

There is no amount of parental approval that’s worth your dignity, freedom, and power as an individual.

For some specific applications, see here.

Getting Started on Entrepreneurship While You’re Young

In “The Future of School” I share my biggest regret:

“I wish I had more confidence, and earlier, about going my own way.”

It took me a long time to realize that all the things I thought and did differently weren’t things I should try to shut down, hide, or change.  They were my greatest strengths.

When you’re 14, 16, or 18, all the world seems to be screaming at you to look like the average of some aggregate.  Well-meaning teachers, parents, coaches, relatives, and friends want to know how you stack up on a series of “normal” indicators of status and ability.  They want you to know the stuff everyone else your age knows, and do the stuff everyone else your age does.

But the reality is that it’s the “Crazy Ones” who change the world.  It’s those who gain the courage and confidence to not suppress their unique take; their hacks and workarounds; their weird approaches and unconventional interests and solutions.  These are the makings of an entrepreneur.

And let’s be clear: entrepreneurship is the greatest single skill needed for the present and future marketplace.  Machines and software are taking off like never before, and they can follow rules and obey orders and perform rote tasks better than humans.  This is not cause for concern, but a huge opportunity.  It frees up humans to do what only humans can: creatively problem solve, innovate, experiment, and adapt.

But it does mean that the vast majority of what’s taught in traditional education settings is of little and decreasing value.  Knowledge of facts is nearly obsolete.  We have Google.  Memorization is silly when we have unlimited digital storage.  Following the crowd kills the best instincts and opportunities for value creation.  We need to re-ignite the entrepreneurial spark that everyone is born with.

That’s why we’ve built a 60-day entrepreneurship eCourse for teens.  It all begins with a mindset.  The mindset I wish I would have found sooner.  The mindset that says your best assets are your most unique attributes.  It’s about turning your creativity into a discipline.  It’s about becoming a self-directed, perpetual learner.  It’s about experimentation, trial and error, and approaching life like a game.

This course is hard.  You could easily scan it and gain a few bits of wisdom.  But that’s not what it’s built for.  It’s built for an intensive 60 days.  It’s built to make you a little uncomfortable as you learn to explore your own strengths, weaknesses, and passions, build a basic website, and share your ideas and lessons learned along the way.  If you go through it – really go through it and complete every part – you will absolutely walk away a different person, closer to your goals and the life you want to live.

If you complete the whole thing we’ll be impressed.  In fact, we’re giving you a free coaching session with course creator and Praxis Education Director T.K. Coleman if you do.  You think you can do it?

You don’t need to have that big business idea to begin on the entrepreneurial journey.  It starts by becoming the type of person who is ready and able to seize the moment when that big idea comes.  It starts now.

Are you ready?

Praxis Teen Entrepreneurship Course

The Quantity of Stuff in Your Life is More Important than Your System

Praxis grad James Walpole blogged today about the problems of too much focus on optimization and “life hacking”.

It got me thinking about those I know who struggle to keep their head above water.  People who are creative and productive, but perpetually behind and stressed and overwhelmed.  If you’re in that position, I’m going to share a belief that might be depressing, but it might also be heartening: there is no system that can fix it.

You can’t implement a new schedule, or tool, or plugin, or diet, or any other new way of organizing and executing on your stuff that will save you.  These systems may be better or worse, but they can’t address the fundamental thing keeping you buried.  It’s the quantity of stuff in your life that’s the problem.

I don’t mean physical possessions, though that can be part of it, I mean stuff that’s not core to your mission but that you do or pay attention to or simply keep around anyway.  It’s open tabs on your browser that you don’t need to read.  It’s emails in your inbox you don’t need to keep.  It’s events and engagements you can do without.

If your day is a pipeline transforming inputs to outcomes, no re-arrangement of the pipes can handle the fact that you’re flooding the system with three times the volume it can handle.  Or, to use another water analogy, if your progress is a body of water, compare the power of a highly concentrated, pressurized stream like a fire hose, vs. a flood plain sloppily sloshing around.

Cut the stuff out.  Focus only on the things that give and create energy.  That’s when your systems and life-hacks will begin to work.  Then they can improve things at the margin.  But until you reduce the overwhelming quantity of stuff in your life, no system can save you.

Email From a Praxis Graduate

I got an email yesterday from Mitchell Broderick, a Praxis graduate from our very first class.

I distinctly remember Mitch’s decision to abandon college and step up to the challenge of Praxis.  He had to move across the country.  He had to build a new network.  He had to enter a professional environment with far more responsibility (and opportunity) than any he’d experienced.  He had the chance to start doing work immediately that he hoped he would someday be ready for after four years of college.  It wasn’t easy.

He rose to the challenge.  He took a chance on Praxis and on himself.  In his email, he recalled the difficulty of the decision, and the challenge of making this personal investment.

   Mitchell Broderick

“The return on that investment and struggle has been incredible.”

 

The reason he emailed me was to let me know that, exactly one year after completing the program, he hit his ambitious sales goal for the year and cleared six figures (working as a VP of business development for the same company he spent his Praxis apprenticeship with).

No degree.  No college debt.  No hoops to jump through.  Mitch became the person he wanted to be and is living a life he assumed he’d have to wait a decade or more to live.  And he’s just getting started.

There is an experimental, exploratory element of the program.  You can take a year to get out into the world, test yourself, engage in personal development projects, be challenged by advisors and coaches, take charge of your own education, build better habits, and see what entrepreneurship is all about.  But Mitch is a great example of the fact that this isn’t just a one-year good time.  Praxis isn’t just about a short-term experience.  It’s about building the career and life you want in the long term.  You get an amazing job with the program that can be the first step in your career.  As Mitch put it,

“Praxis isn’t something that contrarians do to be different for a year. They do it because it works. They get awesome jobs making great money.”

And Mitch is the first to tell you, it’s not about money.  It’s about becoming the kind of person that can create value and achieve your own personal goals, material and otherwise.

I shudder at the thought of an ambitious grinder like Mitch languishing in a cinder block classroom somewhere under fluorescent lights.  He’s worth more than that.  He was ready to engage the real world and create his own path, not sit on someone else’s conveyor belt.

How many Mitch’s are out there, ready to break the mold?  This is why we do what we do.

Discover Praxis if you think you have what it takes.

Sometimes You Have to Create a Chip on Your Own Shoulder

NBA great Stephen Curry has a chip on his shoulder.  It’s clear when you watch him play.  Even as he’s gotten better, it’s grown bigger.  This is what great performers do.  They play with a chip.

Steph is a great example of how the factual truth of a situation by itself does not dictate what kind of orientation we have toward it.  There are two stories about Steph Curry, both true.

In one story he was born with great genes to an NBA star dad and volleyball playing mom.  He grew up with plenty of money and access to basketball training facilities, coaches, mentors, and opportunities galore.  He honed his skills, went to a good school, played well, got drafted for good money, and continued excel with a great team and organization around him.

By this account, which is factually correct, he is one of the most fortunate people on earth.  How could this gifted athlete have a chip on his shoulder?

In another story Steph grew up with more pressure than most people could imagine.  His star athlete parents had done more than most kids could ever hope to in sports.  He lived under their shadow.  He didn’t grow as tall as he should have for basketball, and was too skinny.  Despite practicing the sport almost from birth, not a single major college was interested in him.  He ended up at a tiny liberal arts school.  He played well, but he was not fortunate enough to be on a team with any hope of a national title.  Despite his amazing shooting ability and NCAA tournament performance, Steph was questioned as an NBA talent.  He was seen as too small, and mostly just a shooter without a full range of skills.  He entered the league with virtually no hype compared to most future MVP’s.  He had to scratch and claw through a historically great Western Conference for the first several years of his career before making it to the finals.  When there, even though the team he led won, he did not get finals MVP.

By this account, which is factually correct, he is one of the biggest underdog greats in sports history.  How could this constantly overlooked late-bloomer not have a chip on his shoulder?

Steph can choose which set of facts to focus on and which narrative to tell himself.  Off the court, Steph is likely aware of the great life he’s had and thankful for it.  Remembering the best facts about ourselves is a powerful defense against self-pity.  Yet it seems pretty clear that, come game day, he’s thinking about the second story.  He’s not just happy to be there.  He’s got something to prove.

At Praxis we like to tell the participants at the start of the program these two bits of professional advice:

  1. Don’t take anything personally
  2. Take everything personally

The first is a reminder to think in terms of rational choice theory.  Deciding someone is wrong or out to get you is unhelpful for determining how to work around them.

The second is a reminder to stay sharp because no one cares about your success.  In fact, if you’re doing your own thing, they probably doubt you.  Good.  Use that.  Not with malice toward them in real life, but as fuel for the narrative you weave of your own hero’s journey.

See, we can all be like Steph Curry after all!  Now go watch some amazing highlight videos.

A Tale of Two Cities Part 2: Why People are Dumb at the Ballot Box

This is the sequel to a post about the two spheres we all dwell in – the political and the civil – and how each affect our behavior.

Originally published in The Freeman.

Why do so many San Franciscans want to curb Airbnb’s innovative business model?

Proposition F would have restricted the number of nights owners could list their homes and which types of rooms could be listed; it would also have required a litany of paperwork and reporting to a city department. Listings that did not meet city standards would have incurred fines of up to $1,000 per day. The details are many, but the thrust is obvious: this proposal was to make Airbnb far less successful at creating value for customers and investors.

The proposal ultimately failed, but it wasn’t a landslide. Forty-four percent of voters supported it. Nearly half of the voters in a city that owes its recent prosperity and identity to this kind of innovative company wanted to strangle one of the geese on whose eggs they are feasting.

Most political action is signaling.

The simplest explanation is that proponents of this proposal were the minority of businesses and individuals who are in direct competition with Airbnb — hotels and those working or investing with them. True, but something deeper is at work. A surprising number of investors, entrepreneurs, and everyday residents of the city who are not involved with competing businesses voiced their support for the proposal. Some supporters were even Airbnb investors.

How could this be?

Here are five reasons (by no means an exhaustive list) why people behave so badly in the political realm.

1. Other People’s Problems

Milton Friedman famously described the four ways to spend money. You can spend your own money on yourself, your own money on someone else, someone else’s money on yourself, or someone else’s money on someone else. It’s clear that you’ll be most judicious in the first scenario, and less so in each that follows.

All political issues are a case of the fourth scenario, even when money is not directly involved. You’re voting on the use of resources that aren’t yours — the pool of taxpayer dollars that fund government bureaucracy — to solve someone else’s problem, in this case hoteliers threatened by competition and San Francisco residents supposedly being pushed out of affordable housing.

Ballot initiatives tell us that some people, somewhere, are having some kind of problem — and that we can vote to make it better. It’ll cost you nothing (at least nothing you can see at the moment), so why not?

Not only voters, but also the regulators, enforcers, and drafters of such propositions are so far removed from the issue at hand and have no personal stake in the outcome that it is impossible for them to make decisions or draft policies without unintended consequences.

2. Information Issues

Proposition F is ridiculously complex. To cast a fully informed vote on the Prop F, one would need to begin by reading all 21 pages of legal text. What’s more, the costs of obtaining the information far exceed the probability that your informed vote will be decisive. The result is what economists call “rational ignorance.”

Customers, employees, managers, and investors of Airbnb are best suited to optimize the service. Even the company’s competitors are in an excellent position to curb it or force it to improve if they channel their efforts where the information matters, namely in the markets where they stand to lose or gain.

3. Signaling for Survival

Most political action is signaling. It’s not so much that people want to buy American or recycle everything — we know this because when their own money is on the line in the real world of trade-offs, they mostly don’t. But people want to be seen as the kind of person who buys American or supports recycling. There is tremendous pressure in the political sphere to prove to everyone that you support all the right things — especially things that come at a direct personal cost to you. This proves you care about that abstraction called “society.”

Once control by force is an option, a great deal of otherwise productive energy and otherwise creative people are drawn into the crooked craft of politics.

The best thing a rich person can do in the political sphere is vote for higher taxes on the rich. The best thing an Airbnb investor can do is claim to support regulations that restrict Airbnb. You’ll get lots of cheap signal points, even if what you support would actually be bad for everyone.

4. Binary Choices

Voting is a yes or no affair. The political sphere is incapable of genuine pluralism. Imagine if markets worked the same way. What if your local grocery store sent out a survey asking you to vote on which kind of wine you wanted them to stock, or how much, or at what price (with any losses to be made up by adjusting other prices)?

Can Airbnb be improved? Of course. Can a bunch of people with no control over the outcome and little skin in the game be given an up or down vote on a single policy proposal and make it better? Don’t be silly.

The adaptability, nuance, and diversity of options, offerings, and solutions in a market are the greatest strength and the very stuff on which the startup scene was built. Cramming broad society-wide solutions into binary choices is absurd.

5. The Problem of Power

The infamous Stanford prison experiment didn’t go horribly wrong because the wrong batch of subjects was chosen: it was a case of dangerous institutions and incentives. When rules are enforced by raw power, the person who wields that power has more control than any human being can responsibly handle.

Contrary to Thomas Hobbes, it is not the “state of nature” that is a war of all against all; it is Leviathan that rewards force over cooperation and cultivates the worst traits. Once control by force is an option, a great deal of otherwise productive energy and otherwise creative people are drawn into the crooked craft of politics.

F.A. Hayek wrote at length in The Road to Serfdom about why, in the political sphere, the worst get on top. It’s a predictable outcome of a powerful state.

Democracy doesn’t keep this tendency in check so much as it directs the power toward those who are best able to appeal to the desire of rationally ignorant voters to signal the trendy positions on the latest issues.

Focus on Freedom

The innovative startup founders on the San Francisco scene are an amazing force for good when they are pursuing their own interests within the incentive structure of civil society. Not one of them would remain a positive influence if they were granted monopoly power through the ballot box. Nor would their customers: even the most forward-thinking minds in the most innovative city in the world become petty and stagnant when operating within the confines of the political sphere.

When you act as a consumer and choose which kind of vacation housing to purchase, your action sends information and incentives rippling through the market price system, helping entrepreneurs guide resources to their highest valued use. When you act as a voter to support or reject a policy, you create losers and enemies, and your vote generates a host of destructive effects.

If you want a freer, better world, you’ve got to build it in the private sphere.

Laziness is not About Lack of Labor

Laziness leads to boredom, and boredom is the greatest crime against oneself.

Laziness is not about physical labor.  You can be bored to tears doing manual labor all day long and you can be engaged and fulfilled while lounging in a hammock.

It’s hard work to live an unboring life, but it’s the work of the mind and heart.  It takes relentless self-discovery.  You can’t stay interested on a diet of quick hits of easy excitement.  You need to unearth the self at the core of your being and live in accordance with what you find.  You have to relentlessly purge the things that deaden your soul, bore you, and make you unhappy.

It’s far easier to just go along.  It’s easier to do things that appear to be work but require little mental focus, discovery, or honesty.

But it’s not worth the cheap sense of leisure.  Living an interesting life requires the deliberate act of being interested in everything within and around you and exploring it.

Boredom is death.  Laziness is terminal illness.

Book Review: Rise Above School

My Amazon review of this excellent book by my good friend, radical, entrepreneur, blogger, podcaster, and fellow unschooler Jeff Till.

This book is worth every dime for the “58 arguments for home education” alone. A list so powerful, simple, and clear it’s hard to imagine ever seeing school the same or wanting to send your kids there after reading.

But Rise Above School is much more than that. The author presents an incredibly honest and accessible story of his own process of moving from unthinking adherent to the educational status quo to a parent embarking on a radical unschooling lifestyle. The core insight is one of empathy. What your kids suffer through – bus stops, early alarms, homework, single-file and cinder block cells, lunchrooms, bullies, age-segregation, boredom – is something you would not want to put yourself through, or your spouse, or employees. How then can you do it to your kids?

Jeff is not romantic in his portrayal of home education, nor bitter in his exploration of schooling. He’s refreshingly down to earth. Though moral and practical arguments underpin his advocacy of home education, he shares plainly some of the more compelling reasons in simple things like daily life being more fun and less boring. No need to construct elaborate curricula. Just enjoy your kids. Let them sleep in. Play video games with them.

Rise Above School is an ideal intro to the concept and arguments surrounding education for someone a little disillusioned with mass schooling, but unsure what to do. Start with this book.  If you like where it takes you, Jeff includes a list of additional books and resources for those who want to go deeper.

Buy Rise Above School on Amazon in paperback or Kindle.

A Tale of Two Cities: Civil vs. Political Society

In one city it seems the innovation never ceases.  Bright and talented dreamers from across the globe flock there to build amazing things.  They create solutions to problems both commonplace and incomprehensible.  You can find entrepreneurs and investors working round the clock on everything from entertaining apps to asteroid mining to life extension.  In the past few decades alone the denizens of this city have revolutionized the planet, put massive computing power in everyone’s pocket and all the libraries of the world at the fingertips of the majority of earth’s population.

This city is always looking forward, upward, onward.  It is relentlessly focused on solving problems and improving quality of life.  It is driven by curiosity, new frontiers, and prosperity.  From this city have come simple yet revolutionary technologies that unlock billions in dormant assets like extra bedrooms, apartments, and cars.  Customers love them.  Investors love them.  And the city can be proud of the world-changing impact made by the companies headquartered there.

There is another city much different.  This city puts up barriers and blockades to keep bright and talented people out.  It proposes solutions to problems that don’t exist.  You can find demagogues and petty tyrants working 9-5 on everything from grocery bag taxes to restrictions on tree branches.  In the past few decades alone the figureheads of this city have managed to take record amounts of money from citizens and demand record levels of compliance with confusing rules and regulations.  They’ve taken untold creative power out of every citizen’s efforts and resources out of their pockets.

This city is always looking backward and downward.  It is relentlessly focused on creating new conflicts and categorizing everyone’s relative quality of life.  It is driven by fear, doubt, and preservation of the past.  From this city have come complex and confounding ordinances that strangle active assets and reduce quality of life.  Customers have no choice.  Investors can’t divest.  And the city can take credit for world-changing companies that have relocated to other cities to escape the Leviathan.

Both cities are the same place.  In this case, San Francisco.  But many cities share the same fate.  The citizens are the same.  Yet they live in two spheres simultaneously and the institutions and incentives in those spheres are so drastically different you can barely recognize the actors in each as the same people.

Make no mistake, they are the same people.  It’s not that some people are peaceful, productive producers and consumers and some people are meddling petty tyrants.  It’s that the same person behaves in both ways, depending upon the incentives and institutions.  The political man (as in mankind) is a barbarous, tribalistic busybody.  The market man is an inventive, curious soul.

I’ll be sharing a specific recent example of this split-personality disorder and what leads to the contrasting behaviors in the two spheres in an upcoming piece for The Freeman.  Stay tuned.

Update: Here’s Part 2.

What You Build, not What You Believe

Originally posted here.

“By their fruits you will recognize them.”
– Jesus

Not what you say, or who you like, or how you vote, or what Facebook groups you belong to.  Your fruit.  The tangible outcomes your life creates.  What you build.

It’s easy to place the locus of control with external forces.  It’s easy to feel like the government is in control, hampering you, reducing the prosperity and progress of society.  It’s easy to enter reaction/response mode and spend time complaining about or trying to reform these flawed institutions.  I think there’s a better way.

We can be co-creators.  We can build alternatives.

There are two ways to do things in society: Peacefully or by force. Crime and government operate by force and threat.  Businesses, churches, social groups, and all other institutions operate by peace (unless corrupted or coopted).

Those of us who realize this can quickly and easily describe what’s wrong with the use of force. We can decry it and protest it.  But even criticism of the status quo is a backward looking act.  It is playing within the rules of the game. What if instead we directed that energy outward, creatively, not to tearing down what we dislike but building what we do?

The tools of violence are immoral and inefficient.  They are less desirable and less effective. Instead of trying to convince more people of this, why not show them?  Why not create a better alternative and let it win out?

It took me a while, but I decided to do just that.  For me it was education.

Though not as completely coopted as other areas, higher education is by no means a free-market.  It’s a yucky web of subsidies, grants, regulations, and laws that make degrees artificially valuable.  The system cajoles young people into four years and six figures of a process many dislike and don’t gain value from, walking away with debt, a sweatshirt, and no clue what to do next.  I saw it bringing more and more young people down.  I took a leap and decided not to merely criticize but to create.

I launched my company Praxis two years ago to provide an alternative path for entrepreneurial young people who want more than college.  We’re still new, we’re still small, but we’re growing and the lives that have changed through the program already are enough to tell me this was the right move – the best move I could have made.

I don’t want to fight with people about my views on higher ed, government, or society.  I want to offer people something that is attractive to them, something valuable.  That’s what markets do best – reward endeavors that create value and let die out those that don’t.  I wanted to show, not tell, the world about a better way to approach education, career, and life.

When freedom expands it tends to do so in the realm of lived experience prior to conscious argument.  Once people have tasted freedom in a tangible way – the fruit – they embrace it and reject the status quo.

Rather than looking for political solutions or arguments, can you build and demonstrate a better way?  Can you show the fruit of your ideas?

It’s a challenging and powerful question.  Let’s ask it more often.