10/11/2011

Chance favors the prepared

by Alex Hutchins

Assumptions
1.      Survival dictates
2.      Everyone is greedy
3.      There are no just wars
4.      Businesses are not self-regulating
5.      He who has the money makes the rules
6.      Republics must strictly control the masses
7.      The sole purpose of business is to make a profit
8.      People, individually or collectively, are not self-regulating
9.      Everything in life is predicated upon mathematical randomness
10.  Mathematical randomness will always generate normally distributed data
A Normal Distribution
The above graphic represents normally distributed data.  The blue area is a mathematical depiction of the middle class and the red area depicts the upper middle class on the right and the lower middle class on the left; the orange area depicts the poor on the left and the wealthy on the right.  Together, 99.7% of our population is captured; however, outside of this percentage, we still have .15% on either side which represents the super poor and the super wealthy.  Based upon our assumptions, a mathematical randomness causes this to happen whether we actually want it to or not and there is nothing within our “ordered” universe that will allow us to change this.  This is true for the United States and also true from a global perspective.

The invisible hand that Adam Smith wrote about in Wealth of Nations is true but only from the standpoint of failure, and has nothing to do with day-to-day operations or short-term or long-term strategies for that matter.  Business has one sole purpose and that is to make a profit and their ability to generate a profit is predicated upon the value generated by their employees. An employee’s value is broken down into one’s productivity and the cost of one’s productivity.

Businesses do not exist to provide employment for a community, even though there is an economic impact within a community as a result of that business payroll which is typically $8-$10/dollar.  Businesses do not exist to provide health insurance for their employees or retirement and do so typically to attract individuals who can contribute the most value.

If we return to our assumption that life is predicated upon mathematical randomness, then, workers 99.7% of the time must be managed and supervised or they will gradually drift away from perceived expectations.  To presuppose that workers will behave any other way is to introduce chaos into our mathematical model.  Therefore, the cost of supervision must be subtracted from the value that the individual contributes to the business.

Just as individuals must be regulated within the boundaries of a business, businesses must be regulated within the boundaries of a country.  Businesses like individuals are greedy and not self-regulating and fall into our mathematical randomness distribution model, with those companies in the blue being more self-regulating than those companies in the red or orange.

Governments are created to supervise and manage business just as business must supervise and manage the worker.  In order to properly facilitate this government, a republic is formed.  The difference between a republic and a democracy is as follows:  A Republic is representative government ruled by law (the Constitution). A democracy is direct government ruled by the majority (mob rule). A Republic recognizes the inalienable rights of individuals while democracies are only concerned with group wants or needs (the public good).  Read down and see what our own War Department in 1928 wrote about the difference between a Republic and a Democracy.

When our republic (this writer believes) created our Bill of Rights, movement away from being a pure republic and towards a democracy was initiated and is now irreversible.

"A wise man will not leave the right to the mercy of chance, nor wish it to prevail through the power of the majority. There is but little virtue in the action of masses of men."
Henry David Thoreau (1817-1862)

There is really only one question here: 

Do you believe our Government should be large or small? 

To read in anymore than this one question is a waste of time, based upon the assumptions.  Now, one might argue that the assumptions are wrong and that mathematical randomness is not present in our world or in our universe and that normally distributed data is illogical.

2 comments:

DAN IN LA MESA CA said...

Can't argue with math. As for our government, it has gotten too big. We are spending more than we take in, and this cannot continue. Now before you declare me a member of the Tea Party, let me remind you that they had the basics right, then lost their way. They became only concerned about themselves which is buried in the name "Taxed Enough Already". Our government was too big for too long and has already spent the money. Now WE have to pay it back (not just our children*). Just cutting spending will not do the trick. We must raise the money, just like we are pontificating to other countries like Greece.
*The Republicans are a funny bunch, screaming about how we are passing the burden to our children. But if those children are good little Republicans they too will say "No More Taxes".

DAN IN LA MESA CA said...

And NO, businesses do not owe us jobs. Nor do we owe them our business (regardless of all the media ad blitzes), nor how much we are brainwashed into thinking we can't live without certain things.

Nor should we buy so many things that we live beyond our means.

You buy a house when you save enough money to put down and know there is a reasonable chance you can pay down any borrowed money. The same to be said about a car, and then beyond that you should not borrow unless you can invest it a better rate (doubtful). You should concurrently be saving and putting something aside and the earlier the better. With this initial soundness in financial management, you will go far.