Chapter 4: Government policy and so called “Justice”

Market economy VS Planned economy

At the end of previous chapter, I ask you why America, as an advocate of free trade, still chose monogamy and prohibition of prostitution. Almost all western economists oppose such a barrier to free trade, and apparently monogamy and the prohibition of prostitution are such barriers to free sex trade. As the U.S. Supreme Court once put it, the antitrust laws are “a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” Apparently, the prohibition of prostitution and monogamy violates antitrust laws. Recently I saw an interesting news that 9 people were arrested in Pomona Prostitution Sting. I am sure this is not the first time that the U.S. police have taken prostitution sting action and it must not be the last time either. These policemen are only on official business. I have nothing to say. But why does the U.S. government still choose the prohibition? Is this intervention really good for women? Take it easy; let's review what the market economy and strengths and weaknesses of it are first. 

Market economy allocates resources through the decentralized decisions of many firms and households as they interact with one another in markets for goods and services. In a market economy, the decisions of a central planner are replaced by the decisions of millions of firms and households. These firms and households interact in the marketplace, where prices and self-interest guide their decisions. Prices are the instrument with which the invisible hand directs economic activity. In any market, buyers look at the price when determining how much to demand, and sellers look at the price when deciding how much to supply. As a result of the decisions that buyers and sellers make, market prices reflect both the value of a good to society and the cost to society of making the good. What determines the price of goods or services? Supply and demand are the forces that make market economies work. They determine the quantity of each good produced and the price at which it is sold. If an invisible hand guides market economies, as Adam Smith famously suggested, then the price system is the baton that the invisible hand uses to conduct the economic orchestra.

In west countries, many industries have abandoned the centrally planned economies system and are instead developing market economies. In a market economy, no one is looking out for the economic well-being of society as a whole. Free markets contain many buyers and sellers of numerous goods and services, and all of them are interested primarily in their own well-being. From economics, we have known that markets are usually a good way to organize economic activity, because despite decentralized decision making and self-interested decision makers, market economies have proven remarkably successful in organizing economic activity to promote overall economic well-being. Adam Smith believed that participants in the economy are motivated by self-interest and that the “invisible hand” of the marketplace guides this self-interest into promoting general economic well-being. We generally adopt the sum of consumer and producer surplus as a measure of society's economic well-being. From economics, we know an allocation of resources that maximizes the sum of consumer and producer surplus is said to be efficient. That is, even though each buyer and seller in a market is concerned only about his or her own welfare, they are together led by an invisible hand to an equilibrium that maximizes the total benefits to buyers and sellers.

All the above are the benefits described in the market economics based on Capitalist authorities. What is the truth? Does the market economy sound good, perfect or just? Definitely not! In my opinion, there is no essential difference between a market economy and a violent civilization. The rule of allocating scarce resources in market economy is surplus maximization, which means the rich hold more weight than the poor in market economy. For example, Musk and I are thirsty in the desert, and there was only one bottle of water in a shop. Who should drink this bottle of water? According to the principle of market economy, Musk should drink this bottle of water because his consumer surplus is larger than mine. Apparently, in market economy, Musk and I are not equal, and the rich have more weight than the poor in allocating scarce resources. What about in violent civilization, I can occupy this bottle of water through muscles, which is also a way of allocating scarce resources. Under this allocation rule, Musk and I are still unequal (Suppose I am stronger than him), and strong body has more weight. What is a rule? It is made by the winners. The rule is the tool of the winners to exploit the losers, and it is the fence of the losers to get rid of the disadvantage. Unjust is rooted everywhere in every civilization. To be exact, this is a defect of contract civilization, not a market economy. In the scope of contractual civilization, the market economy is indeed superior to monopoly. In-depth discussion on this issue will appear in Part two. 

Since the market economy can maximize the total benefits to buyers and sellers, why governments like to intervene in the market? Market economy is the application of “survival of the fittest” named by Darwin in human sociology. The essence of market economy is to kick unqualified buyers and unqualified sellers out of the market, so the invisible hand is powerful, but it is not omnipotent as same as God, because it rewards people according to their ability to produce things that other people are willing to pay for, but does not ensure that everyone has sufficient food, decent clothing, adequate healthcare, and free receptacle. Not everyone may be happy with the outcome of this free-market process. In any trade, there must be zero-sum game between buyer and seller, because buyer of any good always wants a lower price while seller wants a higher price, the interests of the two groups conflict, and the game between them determines how to divide the consumer surplus and producer surplus. As same as survival of the fittest, the result of market economy must eliminate some people. A common saying goes, business is as fierce as war. Someone succeeds in the battlefield, someone loses. This statement is absolutely correct, because it is the core of the trade civilization replacing the violent civilization. What is difference is in animal worlds, their rule is survival of the fittest, and it means the one, who has been eliminated, is wiped out or die out immediately, but in human world, people were trying to replace the animal rule of “survival of the fittest” with so called civilized rule of “market economy”. In short, human tried to replace violence civilization with contracts civilization. As a result, troubles appeared, because when they were eliminated by contracts civilization, they became trouble-makers by resorting to violence civilization. All the concessions of the authorities, all from all, based on you can not completely eliminate them. Here I want to repeat an idea written in Microeconomics by N. Gregory Mankiw: The Luddite Revolt. 

Over the long span of history, technological progress has been the worker's friend. It has increased productivity, labor demand, and wages. Yet there is no doubt that workers sometimes see technological progress as a threat to their standard of living…. One famous example occurred in England in the early 19th century, when skilled knitters saw their jobs threatened by the invention and spread of machines that could produce textiles using less skilled workers and at much lower cost. The displaced workers organized violent revolts against the new technology. They smashed the weaving machines used in the wool and cotton mills and, in some cases, set the homes of the mill owners on fire. Because the workers claimed to be led by General Ned Ludd (who may have been a legendary figure rather than a real person), they were called Luddites…. The Luddites wanted the British government to save their jobs by restricting the spread of the new technology. Instead, the Parliament took action to stop the Luddites. Thousands of troops were sent to suppress the Luddite riots, and the Parliament eventually made destroying machines a capital crime. After a trial in York in 1813, seventeen men were hanged for the offense. Many others were convicted and sent to Australia as prisoners…. Today, the term Luddite refers to anyone who opposes technological progress. 

This example is worth looking into. Here I need to expand the scope of definition of Luddite. Whether the progress of technology or knowledge, as a new mutation, must break the original equilibrium state by creating new losers who can get more in original equilibrium state; sometimes break the pseudo-equilibrium state by depriving someone of the benefits they should not even have. These so-called “new losers” are combined to resort to public opinion or violence to force the government to intervene in the market economy. The authorities are always forced to intervene because anything is better than nothing. Once the violence expands, the authorities may have nothing left. All in all, those vested interests, who prevent the progress of society for their own benefit, all should be called “Luddite”. In addition, market economy is a game that caters to the public, so it means individual taste alone doesn't determine individual satisfaction due to two simple conditions: (1) big setup costs; (2) preferences that differ across groups. The market economy is not omnipotent, never to be. 

Government intervention

How to judge whether a policy is good or bad? I think deciding what is good or bad policy is a pseudo problem, because there must be some one who gains from a policy, and at the same time some other loses from the same policy. For instance, when a country allows trade and becomes an exporter of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off; conversely when a country allows trade and becomes an importer of a good, domestic consumers of the good are better off, and domestic producers of the good are worse off. Would free trade make everyone better off? Probably not. All people are in zero-sum game on any cross section of time because the total quantity of goods and services supplied, as any cross section of time, must be enslaved to the Natural rate of output such as the economy's labor, capital, natural resources and technology. In other words, the long-run aggregate-supply curve is vertical, only in the long run, technological progress may shift long-run aggregate supply to the right side, but in short run, people face the problem that how to distribute a limited goods and services, so don't be a dream of communism where everyone are happy in. Whenever a mutation creates new winners and losers, the stage is set for a political battle. Nations sometimes fail to enjoy the gains from free trade because the losers from free trade are better organized than the winners or kidnap the policy maker by cruel bind. The losers may turn their cohesiveness into political clout, lobbying for trade restrictions such as tariffs or import quotas. Monogamy is the compromise of this struggle, because poor guys, who can't afford the equilibrium price in sex-service market, are united together against the polygamy, or policy makers must cater to poor guys if they find the bottom men more useful in violent revolution. What is tariff? The essence of tariff is the government united with domestic producers, uses the power to devour parts of consumer's surplus. Domestic sellers are better off, and domestic buyers are worse off. In addition, the government raises revenue. The essence of monogamy is purchase restriction. Bottom men are better off, and all women and top men are worse off. In general, free trade raises the economic well-being of a market in the sense that the gains of the winners exceed the losses of the losers. Intervention makes not only the size of the economic pie smaller, but also a surplus transfer between consumers and producers. Welfare in sex-service market, like all markets, includes the welfare of both consumers and producers. Unless men are for some reason more deserving than women, free trade in sex-service should not be a social problem. Unfortunately, God indeed prefer men than women, because women are too ignorant and deserved to be sacrificed. This is deeper application of “Survival of the fittest” in human society. The fiction is that the government represents the so-called the weak; the truth is that it represents the financial interests of their own represents the weak only reluctantly unless you bind it on interest. Beware particularly, as the last piece of advice I shall give you, of sinister constructions and venomous rumours, the secret motives of which are often more dangerous than the actions at which they are levelled. You can't blame anyone if you don't know where your interests locate as same as women can't blame men because you don't know where you should rub. The human evolutionary rule is if you are suckers, you must become victims in pseudo-equilibrium. 

What are the strengths and weaknesses of intervention? Smith's insight has an important corollary: When the government prevents prices from adjusting naturally to supply and demand, it impedes the invisible hand's ability to coordinate the decisions of the households and firms that make up the economy. The policy distorts prices and thus the decisions of households and firms. In Communist system, prices were not determined in the marketplace but were dictated by central planners. Central planners failed because they tried to run the economy with one hand tied behind their backs-the invisible hand of the marketplace. Obviously, weakness is that government intervention must cause deadweight loss. For the same example, although a tariff improves the welfare of domestic producers and raises revenue for the government, these gains are more than offset by the losses suffered by consumers. The best policy, from the standpoint of economic efficiency, would be to allow trade without a tariff. When a nation opens itself up to free international trade, there are winners and losers, but the gains to the winners exceed the losses the losers. Like most taxes, monogamy distorts incentives and pushes the allocation of scarce resources away from the optimum, and reduces the overall welfare from the economic view. Additionally, the cost of regulation will be passed on to consumers and producers by devouring surplus. Since it is so, why lots of governments choose tariffs to intervene in the market? The answer is very simple: the idea of “cruel bind” because the seller or buyer is given different weights by the government. On the tariff issue, because governments are selfish, and the tariff produces revenue for the government rather than profit for foreign producers. In other words, the interests of foreign producers are not taken into government's account. Similarly, government didn't take into account the women's interests, because woman is still in the stage of ignorance. Now it reminds me of an old saying: There are no permanent allies, no permanent friends, only permanent interests. The same logic can be applied to the change from polygamy to monogamy. What are the strengths of intervention? In other words, what is the best policy for the government to pursue? Intervention has only one use: Maintaining stability, because God has the same logic that after weighing all pros and cons, the God then decides how to process: The truth or the liar? I think the government has to intervene in the free market when the results of the free market are unacceptable. Give you two examples here. One is one child policy in China. At that time, infant survival rates had already been very high, but Chinese still had a strong desire to reproduce. On the principle of geometrical increase, population numbers would quickly become so inordinately great that no place could support Chinese people. The other is monogamy. With war massacre gradually disappeared, lots of bottom men can survive in society. In my view, there is no good or bad policy, but only useful or useless policy. Winners and losers must exist in any policy. Like I said the essence of monogamy is the purchase restriction, but it can maintain the stability for the ruler. 

The theory of “Trading space for time”

I address that again all the concessions of the authorities, all from all, based on you can not completely eliminate them in the trade civilization, so regulation and victim are necessary in human evolution. Here I give you my new theory of “Trade space for time” (Figure 4.1) to help you to understand the strategy of God. We can regard all governments as selfish God, and in making any decision, they have to weigh two things: stability and justice. Here I don't use two words of efficiency and equality, because I don't think there is a word named “equality”. This analysis of the market for sex-service also helps to explain a seeming paradox of public policy. When analyzing the effects of marriage policy, it is important to keep in mind that what is good for men is not necessarily good for women. Monogamy can be good for men, but it is surely bad for women. This policy aimed at granting sex right to each man, but it does so at the expense of all women. To be honest, I don't like the word: equality. All chaos is caused by equality, and human beings can never be equal, or we must lose the power of evolution. There is a word named “justice”, but no one knows the true meaning of it. The fact that justice delayer is justice denied is inevitable, because what's actually happening is often clear only in hindsight. Evolution is a function of time and space, and people's cognition of justice is also a function of them. Does this intervention work? Yes, it works only in short-run. From economics, we learned that the more an economy is planned, the more it is plagued by shortages, dislocation, and failure, but I want to say that before people have the ability to reach the next equilibrium, please maintain going equilibrium, even Pseudo-equilibrium. The only function of intervention is trading space for time, and the government intervention is inevitable for maintaining going equilibrium in short-run. Might is right-that is the logic of evolution. The idea of making optimal trade-offs is also an important theme in human evolution. First, we must admit God has a preference, and apparently in battle of pursuing orgasm God is on the side of men instead of women because of cruel bind. Second, God choose stability rather than justice, because it has no way out and maintaining stability is the primary task. Similarly, what governments seek is something equivalent to an evolutionarily stable strategy (ESS), so selfish governments made the same decision, and they have to choose monogamy in order to maintain the stability. To be honest, governments are not visionary, and only focus on solving the problems in short-run. What about in long-run? Are governments as rational and informed as they often brag themselves to be? No, I think. Policies often have effects that their architects did not intend or anticipate in long-run. How to maintain equilibrium in long-run? What is God waiting for? Next, I take the example of the change from polygamy to monogamy, and tell you what the God's plan and why victims and pseudo-equilibrium must exist simultaneously. No one can change that. 

Let me tell you how God elaborately arranged the plan of “Trade space for time” by illustrating the Figure 4.1 above. This plan made by God is very marvelous, and please be sure to follow my thought. When analyzing demand and supply, we must distinguish between the short-run and the long-run. In general, for many goods and services, supply and demand curves are both inelastic in short-run; when we refer to the long-run we mean that enough time is allowed for consumers or producers to adjust fully to the price change. During panel (a), the graph shows how the supply curve changes from short-run to long-run in marriage. In short-run, supply curve in sex-service is completely inelastic; and in long-run, supply curve is horizontal depending on the costs in completely competitive sex-service market, and simply reflects the cost of producing a girl. We can assume the cost of raising a girl is constant. There are two reasons: (1) under patriarchy, as you might expect fathers face capacity constraints in the short run and need time to adjust their reproduction strategies; once the price of girls falls, the kinds of decisions that fathers can make are very different in the short-run from those made in the long-run, because the girls have been produced with some sunk cost already which father can't recover back, the best counter-strategy in short-run is that girls must be on sale, but in long-run father can refuse to produce girls, as a producer can free enter sex supply market or exit sex supply market at given market price; (2) after the collapse of patriarchy, women have the right to abuse freedom before they really get rational; but Pseudo-equilibrium is always Pseudo-equilibrium after all, as women become more and more rational, more and more women choose to exit the sex-service market, because they are unqualified supplier and what they get from marriage is smaller than the opportunity costs, so they make a rational choice. We can view this process as the price that women must be paid for growing up. In short, the supply curve rotates from vertical to horizontal clockwise in marriage market with the return of women's sanity. The key is the speed of rotation of supply curve, depending on how fast women wise up I think. 

Similarly, for many goods, demand is much more price elastic in the long run than in the short run. For one thing, it takes time for people to change their consumption habits. During panel (b), the graph shows how the demand curve changes from short-run to long-run in sex-service market. In short-run, sex satisfaction, as a necessity, tends to be inelastic, because there is no close substitute for women's sex service, and additionally without old-age pension each man indeed need some offspring to support their old ages; in long-run view, goods and services tend to have more elastic demand over longer time horizons, and to be honest there is no specific time horizons, such as one year, that separates the short run from the long run. In short, the demand curve rotates from inelasticity to elasticity anticlockwise in sex-service market. The key is the speed of rotation of demand curve. I think it depends on technological changes including inflatable dolls, reproduction machines and pension and so on. With the emergence of alternatives, demand quantity of women falls from Q_S to Q_M, then to Q_L in the end. I'm not kidding. This isn't a joke. it is reported that thousands of Japanese men are turning their backs on real women and choosing ultra-realistic sex dolls as their life partners. In Japan, sex dolls are becoming more advanced and acceptable, and a love affair with the silicon sex machines is becoming increasingly acceptable. One in five Japanese men have never been married by the time they reach 50 - and the stats are expected to rise even further over the next 20 years. The 61-year-old sleeps with his doll, who he named Saori, every night after buying her six years ago to fill the gap as he lived away from his wife. Around 2,000 of the life-like sex robots, which cost around 6,000 USD and come with adjustable fingers, removable head and life-like genitals are sold each year in Japan. I bet mostly of men will have sex with robots instead of women in fifty years. The reasons are simple: (1) Compared with complex women, robots are cheaper and more obedient; (2) Women have higher and higher opportunity costs as time goes by. In short, robots will have greater comparative advantages than women as sellers. As a result, women will be gradually kicked out of the sex-service market. 

Panel (c) illustrates God's strategy of “Trade space for time” perfectly. Let me explain to you step by step. D_P, S_L and S_S intersect at point O, and point O is equilibrium point under patriarchy and polygamy, and P₀ is equilibrium price which simply reflects the cost of producing a girl under perfectly competitive market. With the disappearance of war, many bottom men had the survival rights, and then they united together and asked authorities for mating right. The government can not completely eliminate them all, but only compromised. Government enacted monogamy, and woman became a placebo. The change from polygamy to monogamy shifted the demand curve (D_P) to the left (D_MS), but in short-run the supply curve is vertical, so D_MS and S_S intersect at point A. At point A, each man can get a woman for free because the sex ratio with1:1. Under patriarchy, rational fathers responded by choosing female infanticide in order to exit the supply market, but authorities are forced to enact laws to ban abortion girls. In addition to the prohibition of exit from the supply market, they tried to completely disintegrate patriarchy in order to endow irrational and emotional women with right of free mating, and then stupid women were exploited under the guise of love and human rights. There is an old saying, “Good times do not last long.” With the improvement of women IQ, the supply curve started to rotate clockwise. From now on, script can be split into two scenarios. In scenario one, women quickly get rational, but demand curve doesn't make any response to the rotation of supply curve, therefore S_S is replaced by S_L immediately, and S_L and D_MS intersect at point B. What does it mean? It means (Q₁-Q₂) of men have to be squeezed out of the sex-service market immediately without any substitutes. Technology moves a step late, and now substitutes start to emerge, therefore equilibrium point moves long S_L from point B to point C, and it means (Q₂-Q₅) of men are squeezed out of the sex-service market then with other substitutes. We can view this scenario as hard landing in evolution. In scenario two, when women begin to quit sex-service, demand curve makes positive response to the rotation of supply curve. Technology moves a step early, and substitutes have emerged already. What does this mean? It means with the rotation of supply curve, the equilibrium point moves along D_ML from point A to point C, therefore (Q₁-Q₅) of men are squeezed out of the sex-service market with other substitutes from the beginning to the end. We can view this scenario as soft landing in evolution. There two scenarios are extreme cases, and the real story is likely demand curve is forced to make a reluctant response to the rotation of supply curve, and the real path lies in gray area between scenario one and scenario two, and the magenta arrow represents a possible path. This game is very like the game of robots and population reduction. With the decrease of the labor force, the robots have to appear. There is an important thing I should address here: women getting rational and choosing to exit is an only trigger for subsequent all games. In other words, if women keep stupid and not choose to exit the demand market, there is no any substitute at all, because everyone wants to enjoy goods and services for free. Additionally, for simplicity I made two assumptions in this model: (1) supply curve in long-run is horizontal; it means the price of equilibrium C is equal to the price of equilibrium O, but the fact is the former is bigger than the latter, because under patriarchy women don't have any opportunity cost but now women have a great opportunity cost. For example, I know I have a huge opportunity cost, so I can't give up my opportunity cost for such millions. Maybe I will get into P-V model for several billion. (2) D_MS and S_S intersect at point A where the price is equal to zero, but the fact is the two lines intersect at some point where the price is equal to negative. You will find a common phenomenon that under monogamy rich men are not in a hurry to get married, and for the sake of his daughter's long-term interests, father has to give expensive dowry so that the rich man chooses to marry his daughter, or he choose to marry another girl. Rich men become scarce resources, and they start to be picky about choosing wives because of monogamy, and prefer a woman who is more useful off the bed, instead of a woman who has only vagina on the bed. The women completely turned into a money-losing proposition under monogamy. There is an old saying in China, “Man in his forties is a flower in bloom, but woman is soybean residue.” Why do they say that? Apparently a forty-year-old woman is richer, more knowledgeable and more experience than a woman of the age of twenty. But why? It is because marriage market means sex-services market where women always sell sex no matter how good women are, and obviously twenty-year-old women have better sex resources than forty-year-old women; conversely men always buy sex, and obviously forty years old men have more money than twenty-year-old men. Not only are woman a depreciating asset, her depreciation accelerates in marriage! This is the strategy of “Trade space for time”; it means God sacrifices the interests of women in exchange for enough time to make preparations for next equilibrium, because victims need time to react and there is a time lag between the two equilibriums. The strategy of “Trade space for time” is a commonly used strategy in many areas. Here I give you a classic example in modern game. In the game of Plants V.S. Zombies, the strategy of “Trade space for time” is very useful and practical in playing “Vasebreaker Endless”. Hold your temper and break the vase one by one. By the way, I have met four Gargantuars. Besides the strategy of “Trade space for time”, God prefers another strategy as well called “Crowd tactics”, which I will talk about in later chapter.

Do you think which scenario God or authority is more inclined to? Apparently, God or authority prefers scenario two, because (Q₁-Q₂) of men, squeezed out of the sex-service market immediately without any substitutes in scenario one, are the biggest threat to stability. I said stability is the most important for both God and authority. In order to meet the next equilibrium, God and authority have to arrange either of the two things in going pseudo-equilibrium: (1) Psychological changes that with the development of human civilization, some consumers accept the reality that they are unqualified consumers and renounce violence, including strengthening legal system construction, protecting women from sexual assault, teaching people thinking rationally and accepting the reality and so on. (2) Technological changes that with the development of technology, substitutes for women emerge, and unqualified consumers can shift, at least in part, to new substitutes. Before either of the two gets preparation, God or authority will not let the supply curve rotate in order to maintain the stability. Might is right-that is also the logic of human evolution. How would they stop the supply curve from rotate? In other words, how would they stop women getting rational and exiting the sex-service market? There is only one answer: Introducing love to balance sheet and brainwash women. We can view the introduction of imaginary axis as a stalling tactics. The whole idea of God is the idea of “trade space for time” that they broke the original equilibrium by monogamy, and sacrificed the interests of women to gain some time to prepare for the next equilibrium point C without collapse. That is the true face of politics. Politics requires sacrifice, the sacrifice of others who are stupid, of course. Here three lessons for you: (1) Rational people in decision-making face an important tradeoff between self-interests in short-run and self-interests in long-run. Frankly speaking, interests in short-run is more important than that in long-run, because if chaos in short-run lead to extinction, not to speak of interest in long-run. (2) The victim and pseudo-equilibrium are required in human evolution. Because all the concessions of the authorities, all from all, based on you can not completely eliminate them. Lies maintenance illustrates an important principle: the practices that appear unfair may in fact have legitimate purposes. So how to avoid becoming victims of evolution? Please recall the tax incidence: A tax burden falls more heavily on the side of the market that is less elastic. Similarly, this logic can be applied to any game in social evolution. Keep that in mind: No one can restrict you, when your supply and demand are very elastic. (3) Do not play a strictly dominated strategy. In the game of sex-service, paid sex strictly dominates free sex for women, and you need to be down-to-earth woman because any imaginary is not involved in any real-equilibrium, except pseudo-equilibrium. In the end, there is no consensus about whether government intervention is good or bad for human evolution. Like many institutions, their influence is probably beneficial in some circumstances and adverse in others, but one thing I am sure that government intervention is inevitable. Like Oliver Wendell Holmes Jr. said, “taxes are what we pay for civilized society”, similarly, the government intervention and victims are what we have to pay for human civilization, because you cannot completely eliminate them immediately . Here, “civilized society” refers to contract civilization. This is the process of democratization, and victims and lies exist simultaneously in the pseudo-equilibrium because some are irreconcilable contradictions. 

Two ways of interventions

What means does the government take to intervene in the market in general? I think there are two ways: One is to resort to laws for mandatory constraint; the other is to resort to lies (morality, religion and love) for Non-mandatory constraint. What is the difference between the two? Let me illustrate to you one by one. We always go through a cycle of “Trade space for time”: Step 1: The mutation happens in law and victims appear (the change from polygamy to monogamy); Step 2: Try to stop victims exiting the market by brainwashing (moral preaching and love); Step 3: Watch the laws of economics unfold (the suckers awakening). 

Newton's laws of motion are also applicable to social evolution: In an inertial reference frame, an object either remains at rest or continues to move at a constant velocity, unless acted upon by a force. The law is the force to change the original equilibrium. First, what kind of reasons can be used to change the original law? In general, it is tempting to decry original system for “profiteering” at the expense of the public. In other words, authorities could change the original system under the guise of “unfairness” or “market failure”. Because externalities lead markets to allocate resources inefficiently, and the policymakers must choose control policies, which they think can move the allocation of resources closer to the social optimum, to regulate behavior directly under the guise of externalities. Indeed, policymakers are led to control prices because they view the market's outcome as unfair. Price controls are often aimed at helping the poor. To be honest, politicians are people too and subject to the limitations of the times, so their cognitive ability is very limited. Before we embrace an activist government, we need to consider one more fact: The government is also an imperfect institution, including democratic government. The government rarely has more information than the private parties. I don't know who first proposed a monogamous policy, and whether he claimed this monogamy was both equitable and efficient, but what I am sure is his ideas won him a large political following. Obviously, monogamy was intended to cater to lots of poor guys. Any policy is used to maintain stability. Prohibition of sex selective abortion is to stabilize the aggregate supply of sex-service. What is the nature of policy intervention? It uses outside force to change the payoffs of the game players in original game, so there must be someone who can gain a benefit from a policy, and someone who would suffer a loss from the same policy. So, who loses, who benefits? I think the one who is closer to authorities or kidnaps them with cruel bind is the beneficiary; conversely the one who is sucker or has no common interest with authorities is the loser. Each dictator has tried to replace market prices with his own. In a planned economy such as that of Cuba, North Korea, or the former Soviet Union, these allocation decisions are made mostly by the government. The benevolent social planner always thinks he is an all-knowing, all-powerful, well-intentioned dictator and wants to maximize the economic well-being of everyone in society by altering the market outcome in his way, but unfortunately dictators are rarely benevolent, and even if we found someone so virtuous, he would lack crucial information. Ridiculous laws also happen in democracies. Like I said the essence of democracy is a game to cater to the public, and this is a political bandwagon effect. This is fatal injury of democratic system; the voters are ultimately to blame. So, as we see, monogamy not welfare at all! It's sex bribery. We know from microeconomics that if everyone trades in the competitive marketplace, all mutually beneficial trades will be completed and the resulting equilibrium allocation of resources will be Pareto efficient. If an allocation of resources maximizes total surplus, we say that the allocation exhibits efficiency. If an allocation is not efficient, then some of the potential gains from trade among buyers and sellers are not being realized. Prohibition of prostitution is not efficient. Apparently, prostitution is win-win game for both suppliers and demanders, but still why prohibition? The answer is the legalization of prostitution must cause free sex-service to be a strictly dominated strategy for rational women, and women must delete it immediately, therefore there is no free sex-service in society. The key problem is many poor guys who can't afford the price of prostitution must inevitably lead to social instability. When thinking about any policy, remember that this policy is made not by a benevolent king but by real people with their own all-too-human desires. Sometimes they are motivated to further the national interest, but sometimes they are motivated by their own political and financial ambitions. We shouldn't be surprised when policy fails to resemble the ideals derived in fiction, because the individuals who set government policy may be motivated by self-interest rather than the national interest. 

The government indeed can maintain stability in very short-run by make certain law either required or forbidden. Why, to the perplexity of naturalists, has nature condescended to the tricks of the stage? Because the situation will fall into chaos immediately after the new losers caused by the new law can respond by choosing to exit the market. The controls also have led to frequent product shortages and the emergence of a thriving black market. Rich men still have more than one wife, and some rational women are skirting the rules rather sell them at a loss. With the development of human rights, they can't force women into the free sex-service market with a knife or a gun. What should authorities do? God had to resort to trickery and liars. Their first ruse having failed, they tried another. They turn to imaginary part which substitutes for the law and enforces. Any authority must weigh the costs and benefits of himself before making a regulation. Of course, the lie is necessary. Love and morality have never been so useful in pseudo-equilibrium. In my view, the moral system, which ignores all vicious conditions, defects, incapacities and human nature, is based on the avoidance or concealment of contradictions aimed at maintenance of pseudo-equilibrium by rationalizing some foolishness and irrationalizing some rationalities, while love is like a pyramid selling scam aimed at brainwashing women to be free sex slaves. As a result, stupid women were exploited to be stabilizers under the guise of love, and inculcated that prostitution is immoral, aiming at maintaining free sex-service market. Bullying and moralism have a lot in common. They both use force (either directly or through the power of the law) to enrich someone else at your involuntary expense. Frankly speaking, morality forms loopholes where rational people can arbitrage from. The rise of moralism or love was a bugbear to the world. Hume has a famous like “if all factual questions were resolved, no moral questions would remain.” If we can regard law as a kind of external sanctions, we can view the morality as a kind of internal sanctions. You use external force to save an antelope because you think it is unfair that a tiger kills an antelope, but you never thought it is unfair to tiger because the tiger would die soon without food. Intervention only transfers costs, instead of eliminate them. The West has fallen into mediocrity. Don't change an original equilibrium if you can't find next advanced equilibrium to replace it. To be honest, at least in China, no men can force women into marriage. Except love, there is another thing forcing women into marriage: Custom. Cicero said, “Custom is a second nature”. To be honest, after the first-time women went out to work outside (economic independence), they should quit the marriage market which is based on demand-supply sex-services. They don't, because of inertia. Similarly, after the first-time people entered the pension system, they should refuse breeding, because children became a losing business only from an economic point of view. They don't, because of inertia. About human reproduction, I would talk about in latter chapter of Chinese. Women viewed entering marriage as a compulsory subject, or took it for granted. We can view custom in human world as inertia in physics. Inertia carries women into free sex-service market named marriage. This inertia depends on people's stupid cognition. Because sexual mating is the only way of reproduction chosen by God, people take P-V model for granted. Every man takes the mating rights more or less for granted as a privilege of having been born given by God. We human are too shortsighted, and to be honest, nothing should be taken for granted. Custom is a very terrible thing. If one truth shines through, it is that people are not consistent or fully rational decision makers. We have nothing to do about it, because victims and lies should exist simultaneously in the pseudo-equilibrium. In short, there are two factors to maintain the pseudo-equilibrium: One is lies; the other is custom. If the law is used to change the original equilibrium to pseudo-equilibrium, the lies are used to maintain the pseudo-equilibrium. How to break the pseudo-equilibrium? Cheat is always eternal stability strategy in evolution, and the only reason for the existence of cheat is the existence of sucker. Then how to wake up these suckers? We must go beyond this general framework that women must benefit from P-V model because men can benefit from it. The biggest misconception is that God is fair. People are unfair forever. We have to learn to accept this inequality, and poor guys have to learn to accept that mating right is a luxury. Benjamin Franklin says, “If you would persuade, you must appeal to interest rather than intellect.”  That is fate when I cannot awaken them by appealing to interests either. In the end, it must be a selfish heart to break this pseudo-equilibrium, and my mission in my life is to awaken the rational egoism of women, but it takes long time. 

Frankly speaking, the problem of pseudo-equilibrium is almost unsolvable. But often stupid human tries to solve this problem with a limited human intelligence, which often leads to a more tragic situation. For instance, G-spot and vagina orgasm. The doctrine of G-spot has been carried to an absurd extreme by some authors. Various cults made by scientist attempt to maintain pseudo-equilibrium from the real axis. To suppose this, would be to show equal ignorance of human nature and of fact. There is no word named “rape” in logic, if vagina orgasm or G-spot really exists. Essentially speaking, the change in law is intervention from real axis, and the moral or love, all lies I think, is intervention from imaginary axis. The only purpose of them is to distort incentives, and then change the people's choice, and then change the equilibrium point to maintain pseudo-equilibrium, because human don't have ability to achieve the next natural equilibrium. There is no perfect thing in the world, and under all perfection there are only two things: One is sucker; the other is cheater. There is an old saying, “The road to hell is paved with good intentions.” Pseudo-equilibrium is inevitable in human evolution, and there is no short-cut. From the standpoint of a practical policymaker, there may be little that can be done to improve it. If there is a unifying theme to these topics, it is that life is messy. Information is imperfect, government is imperfect, and people are imperfect, because everyone is destiny taker, including me. This fact is not surprising, but it is not obvious why it is true. What is a good government? Market economy is based on private ownership which clear property rights is the key of. To establish a legal system with clear property rights is the core of all production and trade. Good government aims to protect property right, and should not interfere with what kind of contract the two sides make based on both voluntary, but force both sides to perform the contract, because it is difficult to say something perfectly, precisely false. In my view, good government means you can cheat me into a market, but you can't force into a market. 

Individual selection VS Group selection

First of all, I must confess that I am a staunch individual selectionist, but here I have to defend “group selection” for a little bit especially in pseudo-equilibrium, a stage peculiar to mankind. Group selection is a proposed mechanism of evolution in which natural selection acts at the level of the group, instead of at the more conventional level of the individual. I do not completely deny the theory of “group selection”, and this is my second disagreement with Dawkins who wrote following words in The Selfish Gene: 

…This book will show how both individual selfishness and individual altruism are explained by the fundamental law that I am calling gene selfishness. But first I must deal with a particular erroneous explanation for altruism, because it is widely known, and even widely taught in schools. This explanation is based on the misconception that I have already mentioned, that living creatures evolve to do things 'for the good of the species' or 'for the good of the group'. It is easy to see how this idea got its start in biology. Much of an animal's life is devoted to reproduction, and most of the acts of altruistic self-sacrifice that are observed in nature are performed by parents towards their young. 'Perpetuation of the species' is a common euphemism for reproduction, and it is undeniably a consequence of reproduction. It requires only a slight over-stretching of logic to deduce that the 'function' of reproduction is 'to' perpetuate the species. From this it is but a further short false step to conclude that animals will in general behave in such a way as to favour the perpetuation of the species. Altruism towards fellow members of the species seems to follow…. If it is species that are competing in what Darwin called the struggle for existence, the individual seems best regarded as a pawn in the game, to be sacrificed when the greater interest of the species as a whole requires it. To put it in a slightly more respectable way, a group, such as a species or a population within a species, whose individual members are prepared to sacrifice themselves for the welfare of the group, may be less likely to go extinct than a rival group whose individual members place their own selfish interests first. Therefore the world becomes populated mainly by groups consisting of self-sacrificing individuals. This is the theory of 'group selection', long assumed to be true by biologists not familiar with the details of evolutionary theory, brought out into the open in a famous book by V. C. Wynne-Edwards, and popularized by Robert Ardrey in The Social Contract. The orthodox alternative is normally called 'individual selection', although I personally prefer to speak of gene selection. The quick answer of the 'individual selectionist' to the argument just put might go something like this. Even in the group of altruists, there will almost certainly be a dissenting minority who refuse to make any sacrifice. It there is just one selfish rebel, prepared to exploit the altruism of the rest, then he, by definition, is more likely than they are to survive and have children. Each of these children will tend to inherit his selfish traits. After several generations of this natural selection, the 'altruistic group' will be over-run by selfish individuals, and will be indistinguishable from the selfish group. Even if we grant the improbable chance existence initially of pure altruistic groups without any rebels, it is very difficult to see what is to stop selfish individuals migrating in from neighbouring selfish groups, and, by inter-marriage, contaminating the purity of the altruistic groups. The individual-selectionist would admit that groups do indeed die out, and that whether or not a group goes extinct may be influenced by the behaviour of the individuals in that group. He might even admit that if only the individuals in a group had the gift of foresight they could see that in the long run their own best interests lay in restraining their selfish greed, to prevent the destruction of the whole group. How many times must this have been said in recent years to the working people of Britain? But group extinction is a slow process compared with the rapid cut and thrust of individual competition. Even while the group is going slowly and inexorably downhill, selfish individuals prosper in the short term at the expense of altruists. The citizens of Britain may or may not be blessed with foresight, but evolution is blind to the future. Although the group-selection theory now commands little support within the ranks of those professional biologists who understand evolution, it does have great intuitive appeal. Successive generations of zoology students are surprised, when they come up from school, to find that it is not the orthodox point of view. For this they are hardly to be blamed, for in the Nuffield Biology Teachers' Guide, written for advanced level biology schoolteachers in Britain, we find the following: 'In higher animals, behaviour may take the form of individual suicide to ensure the survival of the species.' The anonymous author of this guide is blissfully ignorant of the fact that he has said something controversial…. Perhaps one reason for the great appeal of the group-selection theory is that it is thoroughly in tune with the moral and political ideals that most of us share. 

Actually, behaviour taken the form of individual suicide to ensure the survival of the species did happen in the past in human history called “Sacrifice yourself for communism.” I think there is only one possibility that can make individual sacrifices himself/herself: He/She was brainwashed or deceived completely into sacrificing for some certain cheaters, while at the same time these certain cheaters kidnapped the good of the species by “cruel bind” idea. We can view this scenario of group selection as a special case of individual selection. In other words, any individual would not sacrifice for the species if the fundamental unit of self-interest is individual, but what happens if the fundamental unit of self-interest is gene? I believe that individual selection is just the matter of frame. When you stand at a personal point of view, altruism is absurd, and no rational individual would choose to sacrifice himself/herself for the group, so selfish individual could choose to benefit from cheating group; similarly, when you stand at a gene point of view, altruism is also absurd, because no rational gene would choose to sacrifice itself for the individual, so selfish gene could choose to benefit from cheating individual. One of the most striking properties of selfish gene behaviour is its apparent purposiveness, so from a genetic standpoint, what is the purpose of the gene? I think the true purpose of genes is to be eternal, so they chose to make all kinds of survival machines for themselves containers, vehicles for their continued existence, and chose asexual or sexual reproduction for their eternity. The fact that genes are motivated by purpose causes that the survival machines made by genes behave as if motivated by purpose. To be honest, genes never care about the happiness of any individuals, but only their own eternity, and that is why God chose to snipe homosexuality because homosexuality must lead to the demise of genes before the emergence of Tube baby. I bet that gay genes did it. Similarly, for their eternal, genes had to snipe women's orgasm because the truth of female orgasm must lead to the demise of all genes before the emergence of fertility machine. I bet all genes did it in collusion. My view is that no individual would choose to sacrifice for the good of species actively, but sometimes particularly in the pseudo-equilibrium some individuals have to be sacrificed for the good of species passively and selfish individuals prosper in the short term at the expense of altruists. I do not deny the correctness of the theory of individual selection, but there is another situation that cheaters taking advantage of suckers would not lead to the demise of suckers. Parasitism is a typical example. The host is the complete loss of the side, while the parasite is the full benefit of the party. But this loss does not lead to the demise of the host. How do you explain the altruistic behavior of the host? I can assert that host chooses altruism passively as same as women because it has no choice. 

Self-interest VS General-will

In our human Social Sciences, we can see that the ideas of “self-interest” and “general-will” alternately dominate human. We can view self-interest as an extension of individual selection in social sciences and general-will as an extension of group selection. They come from two different cultures and two different races. The idea of “self-interest” comes from British, and the idea of “general-will” comes from France and German. Here I would like to briefly introduce them one by one. 

The representatives of British individualism are Thomas Hobbes, Adam Smith, John Stuart Mills, Charles Robert Darwin and Richard Dawkins. They thought the analysis should start always with individual, and society should start always from the individual. Hobbes was first rational choice theorist, and thought people are quite evil. People all have appetites, desires and needs, and in order to satisfy our needs, it always has costs, therefore we have to measure up what the price of our action will be, and then we decide whether it is worth to pay this price or it is not worth to pay this price. In other words, we have to somehow negotiate out between our desires, appetites, and our fears or aversions. Hobbes' theory is very close to Adam Smith's theory of “Self-love” in economic theory, John Stuart Mills' theory of “Utilitarianism”, Darwin's theory of “Survival of the fittest” and Dawkins' theory of “Selfish gene”, who can be considered as rational choice. He is the sort of inspiration for neoclassical economics and rational choice theory, and methodological individualism, to put it this way. Smith is saying that everyone is motivated by self-interest and that the “invisible hand” guides this self-interest into promoting general economic well-being. Each person neither intends to promote the public interest, nor know how much he is promoting it, but only intends his own gain. We address ourselves not to their humanity, but to their self-love, and we never talk to them of our own necessities but of their advantages. It is appealing to the self-interest of the person for whom I expect something, and not is benevolence. Good relationships are always based on self-interest. You want people acting out of self-interest. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. In other words, only “self-interest”, as invisible hand, can lead self-interested buyers and sellers to maximize the total benefit. There is also saying if you are seeking self-interest, if you chose it rationally, this will be in the common good. Which is best for you is also the best for society. In a cold rational world filled with competitive and isolated individuals, all people are led by self-interest, and then we figure out the way how to live with them, by interacting with them. This is what contract world Enlightenment produced. Mills thought the correct action of people is to maximize pleasure and minimize pain. Darwin thought natural selection is based on individual differences, and acts by life and death, – by the preservation of individuals with any favourable variation, and by the destruction of those with any unfavourable deviation of structure. From his book, you would find that Dawkins is a typical and firm 'individual selectionist'. 

The French and Germans are methodological collectivists. They believe there is such a thing as society which is more than the sum total of the individuals. The representatives of collectivism are Montesquieu and Rousseau, and later Karl Marx. The argument what Montesquieu makes, repeated by Rousseau and Durkheim, that you can't explain society from the individual, there should be some general-will, or there must be some consciousness above the individual consciousnesses. Our individual interests have to be overruled by the general will. Individuals can not just follow their self-interests, because the general-will has to prevail. The individuals will have to be constrained otherwise we are in trouble. Individuals occasionally have to be forced to go by this general will, by the public good. Rousseau believed that the individuals will have to be forced to be free, which paves the road to totalitarianism. This is a very disturbing idea which opens Rousseau up to a totalitarian interpretation that he argues that the government knows better, so there must be a central planner rather than an individual actor which tells people what their needs are. Totalitarian regimes very often advocate it, because the idea of general paves the foundation towards Marxism and Communist ideologies. Collective education is particularly important. I dare say the initial personal education was derived from skill learning, and the initial collective education must be derived from indoctrinating the public with general-will. In childhood we learn, we internalize those ideas. I do believe that education has two faces: One is positive, the other is negative. The positive effect of education is we can stand on the shoulders of our predecessors because many relationships have already been in equilibrium, so education allows us to have a cumulative effect on knowledge, instead of every generation starting from zero; the negative effect of education is we also inherit the fallacy, so education should be purely negative because we need opportunity to correct mistakes we made before. It consists not at all in teaching virtue and the truth, but in securing the heart from vice and the mind from fallacy. I think the really good education is giving an opportunity for people to use their mind, rather than indoctrinating them, and the task of education is to help your brain operate sufficiently to tell what fallacy is and to figure out when you are making an error. Education is the process in which we force you to think on your own. 

In my theory, self-interest and general-will are both important in human evolution, because equilibrium must be based on self-interest and pseudo-equilibrium should be based on general-will. We can regard general-will as a kind of expediency-philosophy in pseudo-equilibrium when self-interest would lead to extinction. The pendulum of social dominant consciousness should swing back and forth between self-interest and general-will. In my view, the general-will is an intervention from selfish genes in order to prevent the death of genes, but sometimes they failed. For example, like I said before gay genes tried to do everything to stop homosexuality legalization by general-will, because the legalization of homosexuality must lead to the demise of gay genes before tube baby, so for their eternal, selfish gay genes have to create a general-will of homophobia to push gay people into P-V model which is based on sexual reproduction, but their intervention failed on some people, like Alan Mathison Turing, so his genes disappeared as same as dinosaurs. What blocks the truth of female orgasm？The only answer is reproduction. God would try everything possible or impossible to prevent the truth of female orgasm until reproduction machine appears. Eternity is always selfish gene's primary purpose, and individual liberty can't interfere with eternity because everyone including Saviors has to face the limitation by times, and any general-will, as a threshold, is always used to maintain stability. I agree that the government's actions are not necessarily just, but the public must be just? The human mind is far from mature, and don't figure out what is right or what is wrong. Just has been thought about differently in different times, and everyone are ruled by the external world. The workshops where ideals are fabricated, they stink of lies, and what is in our mind is a distortion of the reality at any time. Modern contract civilization is coming from repression, and people must learn to acknowledge and accept that you are an unqualified trader. 

We have a certain degree of freedom, limited by space and time. We can't do whatever we want to do, because we may not have enough ability to afford it. That is when we are actually beginning to figure out we deliberate what on earth is worse for us. God will give people a proper freedom as long as no harm principle. We can view human history as the unfolding of human consciousness step by step, and material advance goes first and ideological awakening goes second. The government and the law represent the general-will, at the beginning of pseudo-equilibrium people can get along with each other peacefully because victims are controlled by the general-will, but in the end of pseudo-equilibrium there are all conflicts and contradictions in this system because self-interest begins to awaken. Conflicts and contradictions drive the change. Marx thought technology is always advancing, but the growing, evolving technology eventually gets into conflict with the relations of production between the property relationships and social relationships in society. Eventually these outmoded social relationships become in a conflict with the forces of production. Therefore, at one point there will become a tension between the outmoded, outlived, old relations of production and the need to create new spaces for the development of forces of production. This is the revolutionary moment, as Marx defines it. This is the time when the revolution will come, because this is when we will rise against the old social relationships and replace them with new social relationships which will create new space for further growth after development of forces of production. I basically agree with Marx that productivity determines production relations, and relations of production should change with the change of productivity, but he did not take into account the lag problem. The lag problem is unavoidable at all times. Additional, the revolutionary moment which Marx mentioned, is easy to lead people to back to the violent civilization after abandoning the contract civilization. There is a big tendency for history that we are becoming increasingly rationalized, but rationalism is also a terrible thing, because it includes the balance between short-term and long-term interests. The proletarian revolution is an example of only caring short-term interests, because they only want to occupy the property owners' assets by violence, but do not realize that other proletarians also can occupy their assets by same violence when they become property owners. The violent revolution of the proletariat will only lead human to a vicious cycle. 

Fate

When rationality would lead to death, God chooses to cover up the victim's rationality to complete the strategy of “Trade space for time” by general-will, or by all kinds of Religions. In my eyes, G-spot or vaginal orgasm is a kind of obscurantism as same as religions. According to Wikipedia, obscurantism is the practice of deliberately presenting information in an imprecise and recondite manner, often designed to forestall further inquiry and understanding.  There are two historical and intellectual denotations of Obscurantism: (1) the deliberate restriction of knowledge—opposition to disseminating knowledge; and, (2) deliberate obscurity—an abstruse style (as in literature and art) characterized by deliberate vagueness. I can't say all religions are bad, but religions are indeed stabilizers, especially in pseudo-equilibrium. Religion is a deep and complex subject, and so are its interactions with deceit and self-deception, because almost all religions encourage deceit and self-deception. In my opinion, there is no good or bad in religion, but only useful and useless. Useful religions tend to brainwash victims to maintain pseudo-equilibrium before we have the ability to achieve next real equilibrium, conversely useless religions tend to break going equilibrium or pseudo-equilibrium before we do have the ability to achieve next advanced real equilibrium. Certain features of useful religion provide strong placebo to at least part of victims for self-deception, and various phantasmagorical things are easily imagined, and general-will should take the place of self-interest. We can view any religion as association with in group deceit and self-deception. And here comes the critical, all-encompassing self-deception: we are the measure of what is good, we represent the best, we have the true religion, and as believers we are superior to those around us, because we have been saved but they have not. Our religion is one of love and concern for the world, our God a just God, so our actions can't be evil when they are done in God's name. Religion encourages parochial idolatry and unconditional obedience because that is the will of God, so women never questioned the justice of P-V model because God chose it. Can we abolish religion? No, because we are in the stage of orcs, we would go back to the complete barbarism if religions all disappear now. Like I said before lies are shameless, but useful. In the end of pseudo-equilibrium when the truth does not lead to death or selfish genes find another way out or we get ready for the cruel truth, self-interest rises again on the history and leads to the collapse of the pseudo-equilibrium. Civilization evolution is coming from technological change. Like I said before there is no such thing called “equality” because everyone was made by different genes and you never ever expect me to beat Tyson; there is a thing called “justice” but people never ever know what the justice is, because justice should to be diluted in pseudo-equilibrium by general-will. There is no universal justice, because the law is changing over time. Nowadays homosexual acts were defined as a crime in many countries; otherwise Turing won't be forced to suicide.  

What is rationalism? We act controlled by self-interest instead of any emotion. Rational economic calculation is the key of self-interest spirit. The essence of self-interest based on rationalism and calculation is the only driving force for human evolution. There is also saying if you are seeking self-interest, if you chose it rationally, this will be in the common good. Which is best for you is also the best for society. When rationalism would lead to extinction, God must choose someone to be irrational, because exist prior to human rights. Unlimited competition is not right, unlimited egoistic behavior is not right. There is a strong element of coercion involved. God coerced people to obey its command. As a destiny taker, you are not in control of your own life, of your own fate. Power means that God can impose its will on somebody else, even if that other person opposes it. We can't beat God, or we would perish. If you keep breaking these God's plan, there will be penalties against you. God seemed to have two faces: Collectivism and individualism, like check and balance in western political system. God guides us to have a proper balance between passion and sympathy, and that is somehow God's will, what we follow. I have to admit I am a determinist; at least I can't change my destiny. We human beings need dictators as same as Saviors, and they are just chess pieces in God's plan of “Trade space for time”. We can view “self-interest” as a offense while “general-will” as a defense. I agree with Adam Smith that an invisible hand controls people's fate and cognitive abilities. 

Here, are you surprised how unfairly God treat women? Yes, it is true, and the truth is always cruel. “What a misfortune to be a woman! And yet the misfortune, when one is a woman, is at bottom not to comprehend that it is one,” says Kierkegaard. Have you ever thought that whether men would give in when issue of female orgasm comes to light? Maybe men don't, but genes do, because in its long journey down the generations therefore, an average gene will spend approximately half its time sitting in male bodies, and the other half sitting in female bodies. Let's apply the theory of “veil of ignorance” developed by John Rawls in this problem. In this life, the fact you can have the privilege of orgasm, not because you are made by excellent genes, but only because all your genes are located in the environment of androgen. Are you willing to give up the 5 seconds of shiver if you made by the same genes in this life are located in the environment of estrogen in your next life? What is justice? Imagine that before any of us is born, we all get together for a meeting to design the rules that govern society. At this point, people do not know in advance what their individual endowments will be; in other words, we are all ignorant about the station in life each of us will be a woman or a man. In Rawls's words, we are sitting in an “original position” behind a “veil of ignorance.” In this original position, do you think women have the right to enjoy the 5 seconds of shiver? I know I can't convince men to compromise from the individual perspective, but I have confidence to convince them from the gene perspective. Please put yourself in women's shoes, because maybe you are sitting in female bodies in your afterlife. This can make a man give way who believes in reincarnation, not a bandit or a rascal. The veil of ignorance is also an important part of my thinking. To be honest, I came up with this idea to persuade men to give in independently, later I found I happened to coincide with Rawls on this theory. 

We also can apply the idea of “veil of ignorance” to public policy designed. If I will be a disabled person in my next life or a person without any talent, what benefits I want to get? Conversely, what benefits I would like to give up if I am a millionaire in next life? First, I present my view that I oppose egalitarianism and high welfare. Like I said God has a preference, people can never be equal. The gap between people and self-interest are the only two driving forces for human evolution. I think all governments should adopted equality of opportunity rather than equality of outcome. Equality of opportunities is more important than equality of incomes, so the government should enforce individual rights to ensure that everyone has the same opportunity to use his or her talents and achieve success. To use Adam Smith's famous metaphor, the “invisible hand” of the marketplace leads self-interested buyers and sellers in a market to maximize the total benefit that society derives from that market. Under legal society, the essence of the welfare is a kind of compensation the winners from free trade compensate the losers. No talking about the idea of “cruel bind”, Should the winners from free trade compensate the losers? Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? Public policy should not be designed to advance moral instincts that we all reject every day of our lives. Let's look at what the essence of evolution is? The essence of evolution means that some genes have to be eliminated, and some genes can spread through the population, and it has nothing to do with egalitarianism, or the dinosaurs would not die out. The human society evolution is the same way. The appearance of digital camera eliminated film camera, and car eliminated gharry. So, the economy suffered when automobiles caused the disappearance of the jobs of most blacksmiths, buggy makers, operators of livery stables, etc.? We must accept that some jobs are not coming back; government should choose to educate and retrain the workers for new jobs. If the government adopts the strategy of high welfare, people would have no incentive to work hard, society's total income would fall substantially, and the least fortunate person would be worse off. To be honest, facing the tradeoff between equity and efficiency, efficiency is more important than equity, because only efficiency can increase the size of the economic pie. Making the pie bigger is the first step, and next we are qualified to talk about how to allocate. If there is no pie, no one can get anything. We must require some difference between the best and worst-off member of society in order to make pie bigger.  There is no word named “equity”, because different people have different views on so called “equity”. When more than two people are involved, the meaning of the word equity becomes even more complex. What you call equity is at the expense of other's benefits. I think the outcome of the competitive market process is justice because it rewards those who are most able and who work the hardest. However, many people can not accept the results of justice, began to resort to violence to force the government to compromise. Like I said before, governments should aim at maintaining the contract society and the legal society, and the good government means you can cheat me into a market, but you can't force into a market. Lies are shameless, but useful.

I do believe that, at very least, the governments should establish a “safety net” to help those most in need, but the key problem is where the government should set the threshold? What is the role of threshold? Its main function is to absorb all deviations less than the value of the threshold in order to maintain the stability. First of all, what the value of threshold the governments should set is very important and crafty, it determines how many people you let in. Additionally, the threshold should not be constant. Even within a country, you have to constantly adjust your threshold over time, because the environment has changed or people's preferences have changed. Keep in mind that people face trade-offs. When the government enacts policies to make the distribution of income more equal, it distorts incentives, alters behavior, and makes the allocation of resources less efficient. Here are two extremes: One is to adopt the strategy of “laissez-faire”, and in other words, they are losers of the economic economy and leave them to die. This is the idea of “Survival of the fittest” in animals. The other is to set the value of threshold so high that lots of people choose to stay in this “safety net”. High welfare creates incentives for people to become “needy”. I'll give you a ridiculous example in China. There is a “culture of poverty” in China. Because every year the government will give a lot of financial subsidy to poverty counties, this leads to a funny phenomenon that lots of middle counties fight for being poor counties. Some middle families are worse off when they earn more. By trying to help the poor, the government discourages those families from working. Many policies aimed at helping the poor can have the unintended effect of discouraging the poor from escaping poverty on their own. What effect would you expect this policy to have before you make your policy? Please use backward induction. Frankly speaking, I would choose to stay at home if Chinese government sends me 1000 US$. Welfare inevitably leads to moral hazard. Secondly, what manners governments choose to help the poor is also important. Give them money or in-kind transfers? By providing the poor with food and shelter, society can be more confident that it is not helping to support such addictions. This is one reason in-kind transfers are more politically popular than cash payments to the poor. For food, supermarket vouchers are a good choice to make sure what kind of foods can be purchased, both limited and free. For shelter, I have another real story to tell you. There is serious shortage in low-cost housing in China. Why? The threshold was set too high. Many people with cars live in low-cost housing. Only low standards can widely cover. I suggest that private bathroom should be replaced by public bathroom in low rent housing. How severe are these potential problems with the welfare system in China? No one knows for sure. Tax and subsidy are sensitive in every country, because they mean redistribution, as a supplement to the market economy. Policies that penalize the successful and reward the unsuccessful reduce the incentive to succeed. Thus, policymakers face a trade-off between equality and efficiency. Finally, I don't approve of high welfare in China. We must get lessons from “PIGS” in the European debt crisis, which triggered by high welfare. Of course, their high welfare is also purposeful. We will talk about it in detail later. 

I don't like government intervention, but I must admit it is inevitable in human evolution. I am for passive stabilization policy, because God adopted the same strategy. Please keep in mind both long-run and short-run goals: One is stability; the other is justice. Policymakers use of policy instruments or lies to stabilize aggregate demand or supply and, as a result, society. Social stabilization has been an explicit goal of any government, also a continuing policy and responsibility of any one. All the concessions of the authorities, all from all, based on you can not completely eliminate them in contract civilization, because the result of the barbaric civilization is life or death but the result of civilization is trading or not trading. The losers would resort to violence when they are the winners in barbaric civilization but losers in contract civilization. I don't like pseudo-equilibrium, and hate lies more, but I know these are necessary. The problem is: facing pseudo-equilibrium, the fast the victims react, the more aggressive and radical the society is. The God prefer soft landing. Lies are shameless, but very useful, so lies may even be a good thing in evolution. Victims are what we have to pay for so-called harmonious society, because so-called civilized people try to replace the savage civilization with contract civilization when we human are in half-orcs period. Authorities tried to replace violence by market economy through introduction of intelligence and knowledge, but apparently the losers in the market economy were not the same losers in barbarism civilization, and frankly speaking lots of the losers in the market economy are the winners in barbarism civilization. The key problem is that losers in barbarism civilization will be completely eliminated but the losers in market economy can not be completely eliminated, so as a result these new losers begin to resort to violence which they are good at. When the new losers become more and more, they can use violence to negotiate with the government, and the government, for the sake of their own interests, has to produce victims in order to cater to the new losers. If policymakers are farsighted, they should be willing to sacrifice some suckers for the temporary stability. The only reason why authorities adopt a policy is to maintain social stability, but from long-run view also plant hidden dangers. The G-spot is the result of irrational exuberance, but the bubble has to end. The coming boom, and the coming collapse. Lies can affect the social with a long lag, and that is the strategy of “Trade space for time”. Indeed, by clarifying the inevitable trade-offs that you face, it can make the choice more difficult, because victim is always inevitable in evolution. Everything is predestined, as a destiny taker, we can do nothing about destiny. It is a very normal phenomenon for fools to be exploited. With the development of civilization, it is clearly easier to make a decision when everyone agrees on the objective. Keep in mind that prostitution is always equilibrium in the game between two sexes. Here I end this chapter in some words said by Gregory Mankiw in his book of Microeconomics, “Difficult choices, however, have no right to seem easy. When you hear politicians or commentators proposing something that sounds too good to be true, it probably is. If they sound like they are offering you a free lunch, you should look for the hidden price tag. Few if any policies come with benefits but no costs. By helping you see through the fog of rhetoric so common in political discourse, the study of economics should make you a better participant in our national debates.”