Thought & Action

A Survival Manual for Dangerous Times

Category: Technology

My Life And Work, by Henry Ford: Against Reformers & Reactionaries

Henry Ford’s autobiography (online version) is good stuff. The need for firm principles in launching ambitious ventures; the role of stochastic tinkering and personal experimentation in innovation; the dangers of finance — it’s all in there.

It’s hard for me to select highlights without wanting to quote the whole thing. Do read it all if you have time. But I thought the following is a good elaboration of a fundamental false dichotomy between “idealism” and “pragmatism”. (False idealism considers what should be without reference to what is; false pragmatism considers what is but is blind to what could be).

Bolding is mine:

I am not a reformer. I think there is entirely too much attempt at reforming in the world and that we pay too much attention to reformers. We have two kinds of reformers. Both are nuisances. The man who calls himself a reformer wants to smash things. He is the sort of man who would tear up a whole shirt because the collar button did not fit the buttonhole. It would never occur to him to enlarge the buttonhole. This sort of reformer never under any circumstances knows what he is doing. Experience and reform do not go together. A reformer cannot keep his zeal at white heat in the presence of a fact. He must discard all facts.

Since 1914 a great many persons have received brand-new intellectual outfits. Many are beginning to think for the first time. They opened their eyes and realized that they were in the world. Then, with a thrill of independence, they realized that they could look at the world critically. They did so and found it faulty. The intoxication of assuming the masterful position of a critic of the social system—which it is every man’s right to assume—is unbalancing at first. The very young critic is very much unbalanced. He is strongly in favor of wiping out the old order and starting a new one. They actually managed to start a new world in Russia. It is there that the work of the world makers can best be studied. We learn from Russia that it is the minority and not the majority who determine destructive action. We learn also that while men may decree social laws in conflict with natural laws, Nature vetoes those laws more ruthlessly than did the Czars. Nature has vetoed the whole Soviet Republic. For it sought to deny nature. It denied above all else the right to the fruits of labour. Some people say, “Russia will have to go to work,” but that does not describe the case. The fact is that poor Russia is at work, but her work counts for nothing. It is not free work. In the United States a workman works eight hours a day; in Russia, he works twelve to fourteen. In the United States, if a workman wishes to lay off a day or a week, and is able to afford it, there is nothing to prevent him. In Russia, under Sovietism, the workman goes to work whether he wants to or not. The freedom of the citizen has disappeared in the discipline of a prison-like monotony in which all are treated alike. That is slavery. Freedom is the right to work a decent length of time and to get a decent living for doing so; to be able to arrange the little personal details of one’s own life. It is the aggregate of these and many other items of freedom which makes up the great idealistic Freedom. The minor forms of Freedom lubricate the everyday life of all of us.

Russia could not get along without intelligence and experience. As soon as she began to run her factories by committees, they went to rack and ruin; there was more debate than production. As soon as they threw out the skilled man, thousands of tons of precious materials were spoiled. The fanatics talked the people into starvation. The Soviets are now offering the engineers, the administrators, the foremen and superintendents, whom at first they drove out, large sums of money if only they will come back. Bolshevism is now crying for the brains and experience which it yesterday treated so ruthlessly. All that “reform” did to Russia was to block production.

There is in this country a sinister element that desires to creep in between the men who work with their hands and the men who think and plan for the men who work with their hands. The same influence that drove the brains, experience, and ability out of Russia is busily engaged in raising prejudice here. We must not suffer the stranger, the destroyer, the hater of happy humanity, to divide our people. In unity is American strength—and freedom. On the other hand, we have a different kind of reformer who never calls himself one. He is singularly like the radical reformer. The radical has had no experience and does not want it. The other class of reformer has had plenty of experience but it does him no good. I refer to the reactionary—who will be surprised to find himself put in exactly the same class as the Bolshevist. He wants to go back to some previous condition, not because it was the best condition, but because he thinks he knows about that condition.

The one crowd wants to smash up the whole world in order to make a better one. The other holds the world as so good that it might well be let stand as it is—and decay. The second notion arises as does the first—out of not using the eyes to see with. It is perfectly possible to smash this world, but it is not possible to build a new one. It is possible to prevent the world from going forward, but it is not possible then to prevent it from going back—from decaying. It is foolish to expect that, if everything be overturned, everyone will thereby get three meals a day. Or, should everything be petrified, that thereby six per cent, interest may be paid. The trouble is that reformers and reactionaries alike get away from the realities—from the primary functions.

One of the counsels of caution is to be very certain that we do not mistake a reactionary turn for a return of common sense. We have passed through a period of fireworks of every description, and the making of a great many idealistic maps of progress. We did not get anywhere. It was a convention, not a march. Lovely things were said, but when we got home we found the furnace out. Reactionaries have frequently taken advantage of the recoil from such a period, and they have promised “the good old times”—which usually means the bad old abuses—and because they are perfectly void of vision they are sometimes regarded as “practical men.” Their return to power is often hailed as the return of common sense.

Bitcoin is not a “payment system for the masses”

As for the long transaction delay and poor scalability, I long considered bit gold as a design for “high-powered money” that like gold could be used as an investment vehicle, a medium for large transactions, and a reserve currency against which digital notes could be issued. It would be however be far more securely auditable than remote gold vaults.

If you’re right on this critique Bitcoin may be destined to become a high-powered money rather than a day-to-day payment system for the masses.

Nick Szabo, Bitcoin, what took ye so long?

I’ve been on a heavy bitcoin kick recently. Bitcoin is still a pretty contrarian investment, even in tech circles. On top of that, Nick Szabo’s opinion above is contrarian within the Bitcoin world, so it’s doubly contrarian. (Nick Szabo is an academic with some excellent essays on cryptography and how human history has been shaped by various technologies, especially security technologies).

The majority of the Bitcoin community hold that the technology should become, needs to become and will become the “payment system for the masses”, helping the unbanked in Africa and helping developed world consumers save on their credit card fees, that sort of thing. On the other hand, a very small but extremely intelligent minority hold that the characteristics of Bitcoin make it unsuitable for such uses — and that its real utility is as a secure store of value that can’t be inflated away. In the long run, Bitcoin is even harder than gold. (The gold supply grows by about 1.5% a year — there’s a lot of gold still to be mined in the world — whereas after 2024 the supply of Bitcoin will be growing by less than 1% a year, with the growth rate halving every 4 years after that. After 2028 the growth rate will be less than 0.5%, and so on). The more people decide that Bitcoin is the safest place to store their wealth, the better investment Bitcoin becomes (and vice versa) — so that Bitcoin either reaches an equilibrium price of $0.00 or it takes over the world. There’s a lot of game theory, geopolitics, cryptography and systems security required to form a more detailed analysis of how this will all play out — but just the basic trend is extremely interesting.