Gross Incompetence: Theresa May’s Three ‘Remaining’ Options On Brexit

Authored Raul Ilargi Meijer via The Automatic Earth blog,

Here’s the lowdown: the EU’s single market mechanism dictates freedom of movement for labor, capital, services and goods. These are not divisible; you cannot have one without the other. Still, that’s precisely what Theresa May, again, is proposing. She basically wants to keep the UK in the single market for goods, and make other arrangements for the rest. The EU will not accept that because it could have 27 other countries coming with their own versions of single market à la carte.

So why does she come with version 826 of what she already knows will not be accepted? And why did her cabinet comply? There are a few possibilities. Perhaps May has finally understood that there is no manner of leaving the EU left to her that will not lead to utter disaster. Maybe she just wants the whole thing to stop. Or maybe Boris Johnson et al, sensing failure for May, see a chance to dethrone her and take over power. Then again, maybe they all look for a way to blame the EU for their own failures.

[ZH: Obviously the resignation of 60% of her 5-person ‘Brexit’ team is not a positive (especially David Davis’ strongly worded email), but as is always the case with Brexit discussions, the next news cycle might/will change everything again]

It’s hard to say, really. What’s obvious, through the comments of industries like Airbus and Jaguar Land Rover, is that 100,000s of jobs are at stake, along with 100s of billions of investments in Britain. Large enterprises are often branched out all through the EU, and they need to comply with EU rules; separate rules for their business with the UK would be a nightmare.

And even smaller companies, to varying degrees, face those same problems. For all you may think of the EU, it has arranged the single market strictly and successfully. There are enormous advantages for companies in that. Take those away and they will look at relocating towards the continent, where they would regain those advantages.

There appear to be three options (and May’s plan is not one of them): a hard Brexit, new elections, or no Brexit at all.

A hard Brexit would be an unmitigated disaster, because everything in Britain runs according to EU rules and regulations. Changing that to British rules is a Herculean task, and one for which the UK is not at all prepared (and they just lost 2 years). An example: thousands of new border officials will be needed, something for which preparations reportedly haven’t even started in earnest. And that’s just one obvious example. A hard Brexit would ruin the country. Not because Britain couldn’t function as a country, but because it’s so utterly unprepared to do so.

New elections wouldn’t solve the issues, they probably would even necessitate an extension of the March 29 2019 date by which the UK is set to leave the EU. But they would open the way to have another look at what’s actually at stake. Do Britons really want to lose all those jobs, and see their standard of living deteriorate accordingly? Because from what I’m reading all the time, the Tories’ austerity has already hit hard, and infrastructure – roads, schools, hospitals, NHS etc.- is being dismantled. A hard Brexit on top of that would be very painful.

No Brexit at all : that’s the most interesting option. Quite a few of the protagonists involved must realize by now how bad things are. Not just May. And that’s where the jockeying for position starts. On the one hand the sociopaths want the power, on the other they want to deflect the blame if things go awry.

A nice angle is emerging for Labour leader Jeremy Corbyn, who has so far insisted his party must protect the people’s Brexit voice: he can now make the case that since the Tories wasted two years, that vote has lost validity, because a ‘decent split’ is no longer possible. It would even be against national security (no joke).

A stronger case could perhaps be found in the campaign financing of the Leave campaign. It seems clear that there have been irregularities, it’s just a matter of how much. If it was too much, the entire referendum could be declared null and void.

But what do the media focus on?

Yes, the Russians, who allegedly furnished capital for the campaign. At the very time that the May government comes out with a Novichok 2.0 tale, which has even less credibility than its older sibling (which led to 324 diplomats being expelled). Britain has a Russia problem. Or, its government does. The English football team and its supporters do not.

Cut out the Russia stuff. Focus on Arron Banks and the money flows around him. It may be the way for everyone involved, except for those close to Leave.EU, to get out of this mess unscathed. The path is clear, says lawyer Jessica Simor:

Why It’s Not Too Late To Step Back From The Brexit Brink

[..] the government does not deny that reversal is legally possible. Its position accords with advice, which I am told from two good sources the prime minister has received, namely that the article 50 notification can be withdrawn by the UK at any time before 29 March 2019, resulting in the UK remaining in the EU on its current favourable terms. [..] As a lawyer, I agree with them. Article 50 provides for the notification – not of withdrawal but of an “intention” to withdraw. In law, an “intention” is not a binding commitment; it can be changed or withdrawn.

Article 50(5) is, moreover, clear that it is only after a member state has left that it has to reapply to join. Had the drafters intended that once a notification had taken place, a member state would have to request readmission (or seek the consent of the other member states to stay), then article 50(5) would have referred not just to the position following withdrawal, but also following notification. Such an interpretation is in line with the object and purpose of article 50.

I’d say this has turned into a story not of political preferences or ideology, but into one of sheer incompetence. Britain risks being thrown back into the age of Marx and Dickens. I’m all for independece and sovereignty, and I fully agree the EU is a massive threat to both, but this is not the way to go about these things. Get in, stay in, while you can.

Oh, and as for incompetence, that’s something you’ll see everywhere as economies dwindle, it’s not a British trait. They’re just among the first to face the challenges. The vast majority of politicians in the west will be exposed as grossly incompetent once the markets start to really go down. It’s easy to make the impression that you know what you’re doing in times of growth, but the litmus test is trying to deal with crisis. Most ‘leaders’ will fail.

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Russia’s Black Sea Fleet To Hold Missile Drill Off Syria’s Coast Ahead Of Trump-Putin Summit

According to the latest Notice to Airmen (NOTAM), the Russian Navy’s Mediterranean task force will host naval exercises off the coast of Syria for several weeks. The starting point of the naval exercise will begin on July 11, just five days before Russian and US Presidents Vladimir Putin and Donald Trump meet in Finland’s capital of Helsinki to discuss the complicated situation in Syria.

The location of the war drill will be in the Eastern Mediterranean between the Syrian coast and the Southern part of Cyprus across the port of Tartus, which will be reserved for 10 to 20 warships conducting missile drills from July 11, 12, 18, 19, 25 and 26, the Russian News Agency TASS reported.

During the exercise, the airspace will be shut down from 10:00 a.m. to 6:00 p.m. Moscow time. The NOTAM mentioned that the Turkish Republic of Northern Cyprus is the “only legitimate and competent authority to provide air traffic and aeronautical informational within the limits of the advisory airspace.”

“REFERENCE IS MADE TO THE NOTAMS A1006/18 AND A1007/18 DATED 05 JULY 2018 ISSUED BY THE GREEK CYPRIOT ADMINISTRATION OF SOUTHERN CYPRUS CONCERNING RUSSION NAVAL EXERCISE AND THE IMPLEMENTATION DCTS AND ROUTE PLANNING. WE WOULD LIKE TO STATE THAT THE GOVERNMENT OF THE TURKISH REPUBLIC OF NORTHERN CYPRUS IS THE ONLY LEGITIMATE AND COMPETENT AUTHORITY TO PROVIDE AIR TRAFFIC AND AERONAUTICAL INFORMATION SERVICES WITHIN THE LIMITS OF ERCAN ADVISORY AIRSPACE. THEREFORE NOTAMS A1006/18 AND A1007/18 DATED 05 JULY 2018 ISSUED BY THE GREEK CYPRIOT ADMINISTRATION OF SOUTHERN CYPRUS SHOULD BE CONSIDERED NULL AND VOID,” the NOTAM read.

TASS mentioned that the warships would conduct missile drills with a variety of precision-guided weapons. In particular, Russian frigate Admiral Essen, a guided missile frigate of the Admiral Grigorovich class – based with the Black Sea Fleet at Sevastopol, armed with the Kalibr missile system (NATO codename: ‘Sizzler’) will be participating in the exercise.

Quoted by TASS, the press office of the Russian Black Sea Fleet reported on June 18, Buyan-class corvettes Grad Sviyazhsk and Veliky Ustyug armed with Kalibr missile systems started their journey to the Mediterranean Sea from Sevastopol.

With a dozen or more Russian warships mainly from the Black Sea Fleet gather off Syria’s coast for future missile drills ahead of the Trump-Putin summit, it seems as Moscow is sending the CIA and the Pentagon a stern warning if relations after the summit falter.

Let us hope that does not happen because Trump’s desire to remove US forces from Syria before October will enable him to declare the proverbial “Mission Accomplished” in defeating Daesh or Islamic State for the upcoming US mid-term elections.

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Brickbat: Standards and Practices

AbayaTV broadcaster Shireen al-Rifaie has fled Saudi Arabia after the nation’s broadcasting authority began investigating her for wearing indecent clothing. A clip of her reporting on women drivers in the nation shows that her abaya is open, clearly exposing the blouse and trousers underneath.

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via IFTTT

Europe Cannot Cope With Any Further Armed Conflict On The Continent

Via GEFIRA,

European leaders are not only unable to counteract the demographic crisis on the Old Continent, but are also losing ground in terms of defense. President Trump’s skepticism and reservation about the military ideas of European bureaucrats Ankara’s increasingly aggressive actions towards Cyprus and Greece, and the rapprochement between Turkey and Russia highlight NATO’s weakness on the eve of its summit in Brussels.

Europe stands no chance if forced to face conflict on three fronts. Two of them are of conventional character: on the eastern flank, where there are continuous tensions with Russia, and in the Balkans near the border with Turkey. The third concerns the Mediterranean area, where young and strong men from Africa and Central Asia cross European borders with the support of a thousand people from the continent’s heartland. Europeans are also militarily involved in Afghanistan, Syria and take part in the growing conflict in Mali.

While Europe is losing its allies, Russia and Turkey are looking for alternative directions of cooperation. Turkey has ceased to be a credible member of NATO, and there are growing fears of the US’s non-engagement in European conflicts. The Gefira team compares the capabilities of the North Atlantic Alliance, without taking into account the American and Turkish armed forces, with those of Moscow and Ankara. The conclusion is clear: the European potential is too weak to deal with any dispute on NATO’s eastern and south-eastern borders.

The comparison shows that European NATO countries spend more than four times on armaments than the Kremlin and Ankara. Despite the fact that the size of the Alliance’s European troops is greater by more than 350,000 people, the advantage of Russian and Turkish ground and air forces is noticeable. NATO’s Navy seems to be stronger, as evidenced by the ratio of nine aircraft carriers to one Russian, but Russia has three times more nuclear submarines. An important element is nuclear equipment: in total, European NATO countries only have 515 nuclear warheads, while Russia has 7,000.

An additional obstacle to the European part of the Alliance is that their troops do not have uniform command. Actions taken by Italy, Poland and Hungary, as well as the euro crisis and migration issues show that Berlin is not able to lead Europe in the face of external threats. France is also trying to take control of European troops, but this has led to the destruction of Libya, while military adventures in Mali are doomed to disaster.

The lack of command procedures without Washington participation is one problem. Logistics is another. Although there are plans to transfer the Alliance forces to the eastern flank, the distance is too large to respond to an unexpected attack. However, given the increasing risk of conflict between Greece and Turkey, NATO countries should reconsider organizational issues that will allow their armies to move more efficiently not only to the east, but also to the south of Europe. Instead of focusing on deterrents, Europe should determine the appropriate logistical procedures that are the basis for a smooth response to an attack on one of the Alliance members.

Although NATO troops are more numerous than Russian and Turkish, even if Article 5 has come into force, no country will sacrifice all of its armed forces. The North Atlantic Treaty gives freedom to members in choosing the means and methods of military defense of a NATO member. Even if each state allocates 10-20% of its soldiers and military equipment (which we consider as a limit anyway), it will not be able to oppose Russian or Turkish troops.

Drawing on the Global Firepower ranking, in the table below, we have compiled the data related to the number of military personnel and items of equipment for three types of armed forces as well as NATO’s and Russia’s budget expenditures. Numbers apart, also technological issues are important i.e. a state’s ability to modernize its military equipment. The Turkish and Russian weapons are regularly tested in operations in the Middle East, which makes it possible to improve them. Most European armies use their equipment only on the training ground and during maneuvers.

First border: USA and Europe

Diplomats admit it openly: Transatlantic relations have been deteriorating for years. Washington is less willing to finance European defense, which is not to the liking of European decision makers who have become accustomed to the United States’ sponsorship to such an extent that many countries are not increasing defense spending to reach the agreed 2% of GDP in 2024. Washington spends USD 647 billion a year on defense, while the military expenditures of other NATO states amount to USD 268 billion. The American president announces that he he is sick and tired of funding European defense. On the other hand, European leaders state that this new American doctrine “has no friends but enemies.” The rejection of the climate change conference provisions by the United States as well as Washington’s withdrawal from the nuclear agreement with Iran, resulting in the re-imposition of sanctions on Tehran, is a bone of contention that brought about a rise in oil prices by hitting importers of this raw material, including Europe.

The trade war waged between the EU and the United States negatively affects transatlantic relations as demonstrated by the recent G7 summit. In addition, Washington is skeptical about European defense plans related to the creation of the European Intervention Initiative, stating that they undermine current forms of cooperation. The growing tension between Europe and the United States may have its apogee at the July NATO summit, when the United States, in order to show the weakness of European allies, may decide to limit its military presence on the Old Continent, and possibly leave the organization altogether. It is important that a few days after the meeting of the Alliance leaders, a meeting of President Putin and President Trump will take place in Helsinki. It is also worth adding that Ukrainian President Petro Poroshenko (Ukraine is not a NATO member) will take part in the July NATO summit in Brussels. spreading the Alliance’s influence to the East may elicit Moscow’s decisive response.

The second border: NATO and Turkey

Europe is openly pointing to Russia as an enemy that could intensify operations in eastern Ukraine or open a new front in the Baltics or Transnistria. However, while the war with Russia in our view is rather less likely, the second – more realistic – place of conflict is the Balkans and Asia Minor. Ankara raises territorial claims against Nicosia and Athens. It can be exemplified by the border violation of Greek air zone by Turkish fighters, or even the Turkish blockade of European ships exploring gas fields in the economic zones of Cyprus. The annexation of Cyprus by Turkey and the attack on Greece (which is also a NATO member) would launch Article 5 of the North Atlantic Treaty.

Turkey and the other NATO members have diverging interests. An example of this is the “Olive Branch” launched at the beginning of this year against the US-equipped People’s Protection Units (YPG), which is the largest Kurdish militia in Syria.10)This causes Ankara to be marginalized by the North Atlantic allies, which Gefira’s team had previously signaled.11)In the current situation, Turkey is not an actual member of the Alliance. Erdoğan’s victory and the strengthening of his position under the presidential system will result in Turkey’s greater activity, and the confrontation between Europe and Ankara, whether it concerns Cyprus or the Greek islands in the Aegean Sea, has become very likely.

Europe distances itself from its military allies. Australia, Canada or Japan, potential partners of the Old Continent, do not see any special interest in engaging their own troops in possible disputes in this area. While European policy-makers lose their allies, Moscow and Ankara are trying to create bilateral and multilateral forms of military cooperation. The Old Continent is unable to cope with the escalation of the aforementioned conflicts, without the support of the United States and Turkey. The North Atlantic Pact depleted by two members is losing importance, and the diverging interests of NATO countries deepen existing divisions. Considering the above list of hypothetical events, it should be noted that the Alliance, contrary to the opinion of many analysts and the mainstream media citing them, cannot be perceived as a permanent military arrangement.

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Comparing Average Rent In 540 Cities Around The Globe

If you’ve ever wanted to know how much it costs to live around the world by budget, look no further. A Reddit user used data extrapolated from Numbeo to create a chart of the average cost to rent a dwelling in 540 cities worldwide, separated in $50 increments and color-coded by geographic region.

It costs an average of $800 per month, for example, to rent in Bangkok, Montreal and Muscat, Oman.

KyleKun’s process

I used Numbeo’s Cost of Living Index Rate (pulled on June 16, 2018) to obtain the rent index for the cities featured in this chart. I used my home town of Cincinnati’s average monthly rent (about $950) as the reference number to calculate every other city’s average monthly rent, based on each city’s respective rent index.

Next, I rounded each rental value to the nearest $50 interval. You can check my work here… I tried to choose cities that somewhat contrasted with each other, were in totally different geographies, or in cases where it was sort of unexpected (to me) that the cities had similar rental costs based on the data.

That said, things such as affordability and average dwelling size are absent this analysis – which KyleKun says he plans to integrate in the future. Crime rate, happiness index and average temperatures would also be interesting metrics to be able to filter and sort by in an interactive format – but let’s not get carried away. 

(click to enlarge)

In terms of affordability – the most expensive (San Francisco) doesn’t necessarily mean it’s the least affordable. As UBS reported recently, Hong Kong may not be the most expensive city to live in – but it’s the world’s most unaffordable – as a skilled service worker needs to work an average of 20 years to buy a 650-square-foot (60 square meter) apartment near the city center. 

[insert: ubs unaffordable.jpg , hong kong centaline.jpg ]

It will be interesting to see what KyleKun’s chart looks like 10 years from now, and how many years the average skilled service worker in Hong Kong needs to afford a tiny apartment. 

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NATO Is Obsolete

Authored by Christian Whiton via The National Interest,

“Europe is prosperous and treats America like a patsy. Let it stand on its own.”

Before President Donald Trump attempts real diplomacy with Russian President Vladimir Putin at a summit in Helsinki on July 16, he’ll first be subjected to another summit. That first summit is a gathering of leaders of the North Atlantic Treaty Organization (NATO). These leaders continually assure the United States they are America’s best allies, even as most contribute little to America’s defense and rack up huge trade surpluses with the United States. Trump will insist on a better deal but should go farther and wind down U.S. membership in NATO.

After the alliance was established in 1949, its first secretary general, Lord Hastings Ismay, summed up its purpose concisely: “to keep the Russians out, the Americans in, and the Germans down.” The unofficial mission matched the time well: Western Europe’s postwar future was clouded by the prospect of a Soviet invasion, American insularity, or German militarism—all possible given the preceding decades of history.

Nearly seventy years later, none of these concerns still exist. Furthermore, NATO’s opposing alliance during the Cold War, the Warsaw Pact, quit the Soviet Bloc in 1989, and the Soviet Union itself passed into history in 1991—twenty-seven years ago.

Despite endless searches for a new mission to justify its massive burden on U.S. taxpayers, NATO has failed to be of much use since then. As its boosters like to remind us, after 9/11, the alliance invoked its Article 5 mutual-defense provision on our behalf. But action from America’s allies did not follow the grandiose gesture—the NATO mission in Afghanistan relied mostly on U.S. forces and effectively failed.

Today, the alliance’s bureaucrats and some member states spotlight a threat from Russia as a reason for keeping the organization alive, along with a laundry list of “train and equip” missions.

Yet NATO members’ defense budgets don’t reflect a real sense of danger from Russia or anyone else. Among the twenty-nine members, only the United States is really serious about its Article 3 obligations to defend itself, spending approximately $700 billion or 3.5 percent of its GDP on defense. No other NATO member comes close to this proportion, and the vast majority fail even to meet the modest, self-imposed requirement to devote at least 2 percent of GDP to defense.

Britain and Poland are rare members that meet the 2 percent requirement. One of the worst free-riders is Canada, which spends just 1 percent of its GDP on security, amounting to $20 billion. Furthermore, Germany spends a similarly pathetic 1.2 percent.

Compare that to non-NATO members facing real threats, some of which spend 5-10 percent of their GDPs on defense. These include Saudi Arabia and the United Arab Emirates, who must contend with Iran and spend nearly a combined $100 billion. Israel, which faces the same enemy, adds $15 billion to the equation.

Despite protestations of poverty at a time when their economies have never been larger, NATO members are more than willing to rack up additional liabilities, knowing America has their back. Last year, the alliance welcomed Montenegro. It is now poised to admit the Former Yugoslav Republic of Macedonia, which would mean the United States is pledged to defend a nation that devotes just $120 million per year to its own defense, not quite as much as the Cincinnati Police Department.

But the reality is there is no truly capable Russian foe seriously threatening the West. Russia has one million uniformed personnel in its military, the world’s second-largest behind America, but the European Union could easily afford to match that with its combined $17 trillion economy—ten times larger than Russia’s. However, it needn’t bother as Moscow spends just $61 billion on its overwrought military, which doubles as an employment program.

Russia’s Vladimir Putin has gotten the most from Russia’s military, occupying parts of Georgia and Ukraine and gaining influence in Syria by backing the Assad regime. Still, his success in all three cases rested heavily on surprises that Moscow seems unlikely to be able to repeat against prepared and adequately funded European militaries.

Yer we should expect to hear none of this nuance at the NATO summit, as poohbahs of the dying old European political order gather to tut-tut President Trump in the alliance’s fancy new $1.4 billion headquarters, funded predominantly by American taxpayers.

To get out of this abusive relationship, Trump should begin the process of limiting America’s role in NATO. A good model is that of Sweden, which cooperates with NATO on some matters and not on others. Such an approach could allow joint training, but end the practice of having over-burdened U.S. taxpayers foot the bill for wealthy Europeans’ security. As part of this plan, Trump could mothball U.S. bases in Europe and shift most resources spent there and in the Atlantic to the Indo-Pacific region, where China and Iran pose real threats to America—and against which NATO is irrelevant.

Europe is prosperous and treats America like a patsy. Let it stand on its own.

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The Most Intolerant Wins: Nassim Taleb Exposes The Dictatorship Of The Small Minority

Authored by Nassim Nicholas Taleb via Medium.com,

(Chapter from Skin in the Game)

How Europe will eat Halal …  Why you don’t have to smoke in the smoking section …  Your food choices on the fall of the Saudi king… How to prevent a friend from working too hard… Omar Sharif ‘s conversion …  How to make a market collapse

The best example I know that gives insights into the functioning of a complex system is with the following situation. It suffices for an intransigent minority –a certain type of intransigent minorities –to reach a minutely small level, say three or four percent of the total population, for the entire population to have to submit to their preferences. Further, an optical illusion comes with the dominance of the minority: a naive observer would be under the impression that the choices and preferences are those of the majority. If it seems absurd, it is because our scientific intuitions aren’t calibrated for that (fughedabout scientific and academic intuitions and snap judgments; they don’t work and your standard intellectualization fails with complex systems, though not your grandmothers’ wisdom).

The main idea behind complex systems is that the ensemble behaves in way not predicted by the components. The interactions matter more than the nature of the units. Studying individual ants will never (one can safely say never for most such situations), never give us an idea on how the ant colony operates. For that, one needs to understand an ant colony as an ant colony, no less, no more, not a collection of ants. This is called an “emergent” property of the whole, by which parts and whole differ because what matters is the interactions between such parts. And interactions can obey very simple rules. The rule we discuss in this chapter is the minority rule.

The minority rule will show us how it all it takes is a small number of intolerant virtuous people with skin in the game, in the form of courage, for society to function properly.

This example of complexity hit me, ironically, as I was attending the New England Complex Systems institute summer barbecue. As the hosts were setting up the table and unpacking the drinks, a friend who was observant and only ate Kosher dropped by to say hello. I offered him a glass of that type of yellow sugared water with citric acid people sometimes call lemonade, almost certain that he would reject it owing to his dietary laws. He didn’t. He drank the liquid called lemonade, and another Kosher person commented: “liquids around here are Kosher”. We looked at the carton container. There was a fine print: a tiny symbol, a U inside a circle, indicating that it was Kosher. The symbol will be detected by those who need to know and look for the minuscule print. As to others, like myself, I had been speaking prose all these years without knowing, drinking Kosher liquids without knowing they were Kosher liquids.

Figure 1 The lemonade container with the circled U indicating it is (literally) Kosher.

Criminals With Peanut Allergies

A strange idea hit me. The Kosher population represents less than three tenth of a percent of the residents of the United States. Yet, it appears that almost all drinks are Kosher. Why? Simply because going full Kosher allows the producer, grocer, restaurant, to not have to distinguish between Kosher and nonkosher for liquids, with special markers, separate aisles, separate inventories, different stocking sub-facilities. And the simple rule that changes the total is as follows:

A Kosher (or halal) eater will never eat nonkosher (or nonhalal) food , but a nonkosher eater isn’t banned from eating kosher.

Or, rephrased in another domain:

A disabled person will not use the regular bathroom but a nondisabled person will use the bathroom for disabled people.

Granted, sometimes, in practice, we hesitate to use the bathroom with the disabled sign on it owing to some confusion –mistaking the rule for the one for parking cars, under the belief that the bathroom is reserved for exclusive use by the handicapped.

Someone with a peanut allergy will not eat products that touch peanuts but a person without such allergy can eat items without peanut traces in them.

Which explains why it is so hard to find peanuts on airplanes and why schools are peanut-free (which, in a way, increases the number of persons with peanut allergies as reduced exposure is one of the causes behind such allergies).

Let us apply the rule to domains where it can get entertaining:

An honest person will never commit criminal acts but a criminal will readily engage in legal acts.

Let us call such minority an intransigent group, and the majority a flexible one. And the rule is an asymmetry in choices.

I once pulled a prank on a friend. Years ago when Big Tobacco were hiding and repressing the evidence of harm from secondary smoking, New York had smoking and nonsmoking sections in restaurants (even airplanes had, absurdly, a smoking section). I once went to lunch with a friend visiting from Europe: the restaurant only had availability in the smoking sections. I convinced the friend that we needed to buy cigarettes as we had to smoke in the smoking section. He complied.

Two more things.

First, the geography of the terrain, that is, the spatial structure, matters a bit; it makes a big difference whether the intransigents are in their own district or are mixed with the rest of the population. If the people following the minority rule lived in Ghettos, with their separate small economy, then the minority rule would not apply. But, when a population has an even spatial distribution, say the ratio of such a minority in a neighborhood is the same as that in the village, that in the village is the same as in the county, that in the county is the same as that in state, and that in the sate is the same as nationwide, then the (flexible) majority will have to submit to the minority rule.

Second, the cost structure matters quite a bit. It happens in our first example that making lemonade compliant with Kosher laws doesn’t change the price by much, not enough to justify inventories. But if the manufacturing of Kosher lemonade cost substantially more, then the rule will be weakened in some nonlinear proportion to the difference in costs. If it cost ten times as much to make Kosher food, then the minority rule will not apply, except perhaps in some very rich neighborhoods.

Muslims have Kosher laws so to speak, but these are much narrower and apply only to meat. For Muslim and Jews have near-identical slaughter rules (all Kosher is halal for most Sunni Muslims, or was so in past centuries, but the reverse is not true). Note that these slaughter rules are skin-in-the-game driven, inherited from the ancient Eastern Mediterranean [discussed in Chapter] Greek and Semitic practice to only worship the gods if one has skin in the game, sacrifice meat to the divinity, and eat what’s left. The Gods do not like cheap signaling.

Now consider this manifestation of the dictatorship of the minority. In the United Kingdom, where the (practicing) Muslim population is only three to four percent, a very high number of the meat we find is halal. Close to seventy percent of lamb imports from New Zealand are halal. Close to ten percent of the chain Subway carry halal-only stores (meaning no pork), in spite of the high costs from the loss of business of nonpork stores. The same holds in South Africa where, with the same proportion of Muslims, a disproportionately higher number of chicken is Halal certified. But in the U.K. and other Christian countries, halal is not neutral enough to reach a high level, as people may rebel against forceful abidance to other’s religious norms. For instance, the 7th Century Christian Arab poet Al-Akhtal made a point to never eat halal meat, in his famous defiant poem boasting his Christianity: “I do not eat sacrificial flesh”. (Al-Akhtal was reflecting the standard Christian reaction from three or four centuries earlier — Christians were tortured in pagan times by being forced to eat sacrificial meat, which they found sacrilegious. Many Christian martyrs starved to death.)

One can expect the same rejection of religious norms to take place in the West as the Muslim populations in Europe grows.

So the minority rule may produce a larger share of halal food in the stores than warranted by the proportion of halal eaters in the population, but with a headwind somewhere because some people may have a taboo against Moslem food. But with some non-religious Kashrut rules, so to speak, the share can be expected converge to closer to a hundred percent (or some high number). In the U.S. and Europe, “organic” food companies are selling more and more products precisely because of the minority rule and because ordinary and unlabeled food may be seen by some to contain pesticides, herbicides, and transgenic genetically modified organisms, “GMOs” with, according to them, unknown risks. (What we call GMOs in this context means transgenic food, entailing the transfer of genes from a foreign organism or species). Or it could be for some existential reasons, cautious behavior, or Burkean conservatism –some may not want to venture too far too fast from what their grandparents ate. Labeling something “organic” is a way to say that it contains no transgenic GMOs.

In promoting genetically modified food via all manner of lobbying, purchasing of congressmen, and overt scientific propaganda (with smear campaigns against such persons as yours truly), the big agricultural companies foolishly believed that all they needed was to win the majority. No, you idiots. As I said, your snap “scientific” judgment is too naive in these type of decisions. Consider that transgenic-GMO eaters will eat nonGMOs, but not the reverse. So it may suffice to have a tiny, say no more than five percent of evenly spatially distributed population of non-genetically modified eaters for the entire population to have to eat non-GMO food. How? Say you have a corporate event, a wedding, or a lavish party to celebrate the fall of the Saudi Arabian regime, the bankruptcy of the rent-seeking investment bank Goldman Sachs, or the public reviling of Ray Kotcher, chairman of Ketchum the public relation firm that smears scientists and scientific whistleblowers on behalf of big corporations. Do you need to send a questionnaire asking people if they eat or don’t eat transgenic GMOs and reserve special meals accordingly? No. You just select everything non-GMO, provided the price difference is not consequential. And the price difference appears to be small enough to be negligible as (perishable) food costs in America are largely, about up to eighty or ninety percent, determined by distribution and storage, not the cost at the agricultural level. And as organic food (and designations such as “natural”) is in higher demand, from the minority rule, distribution costs decrease and the minority rule ends up accelerating in its effect.

Big Ag (the large agricultural firms) did not realize that this is the equivalent of entering a game in which one needed to not just win more points than the adversary, but win ninety-seven percent of the total points just to be safe. It is strange, once again, to see Big Ag who spent hundreds of millions of dollars on research cum smear campaigns, with hundreds of these scientists who think of themselves as more intelligent than the rest of the population, miss such an elementary point about asymmetric choices.

Another example: do not think that the spread of automatic shifting cars is necessarily due to the majority of drivers initially preferring automatic; it can just be because those who can drive manual shifts can always drive automatic, but the reciprocal is not true.

The method of analysis employed here is called renormalization group, a powerful apparatus in mathematical physics that allows us to see how things scale up (or down). Let us examine it next –without mathematics.

Renormalization Group

Figure 2 shows four boxes exhibiting what is called fractal self-similarity. Each box contains four smaller boxes. Each one of the four boxes will contain four boxes, and so all the way down, and all the way up until we reach a certain level. There are two colors: yellow for the majority choice, and pink for the minority one.

Assume the smaller unit contains four people, a family of four. One of them is in the intransigent minority and eats only non-GMO food (which includes organic). The color of the box is pink and the others yellow . We “renormalize once” as we move up: the stubborn daughter manages to impose her rule on the four and the unit is now all pink, i.e. will opt for nonGMO. Now, step three, you have the family going to a barbecue party attended by three other families. As they are known to only eat nonGMO, the guests will cook only organic. The local grocery store realizing the neighborhood is only nonGMO switches to nonGMO to simplify life, which impacts the local wholesaler, and the stories continues and “renormalizes”.

By some coincidence, the day before the Boston barbecue, I was flaneuring in New York, and I dropped by the office of a friend I wanted to prevent from working, that is, engage in an activity that when abused, causes the loss of mental clarity, in addition to bad posture and loss of definition in the facial features. The French physicist Serge Galam happened to be visiting and chose the friend’s office to kill time. Galam was first to apply these renormalization techniques to social matters and political science; his name was familiar as he is the author of the main book on the subject, which had then been sitting for months in an unopened Amazon box in my basement. He introduced me to his research and showed me a computer model of elections by which it suffices that some minority exceeds a certain level for its choices to prevail.

So the same illusion exists in political discussions, spread by the political “scientists”: you think that because some extreme right or left wing party has, say, the support of ten percent of the population that their candidate would get ten percent of the votes. No: these baseline voters should be classified as “inflexible” and will always vote for their faction. But some of the flexible voters can also vote for that extreme faction, just as nonKosher people can eat Kosher, and these people are the ones to watch out for as they may swell the numbers of votes for the extreme party. Galam’s models produced a bevy of counterintuitive effects in political science –and his predictions turned out to be way closer to real outcomes than the naive consensus.

The Veto

The fact we saw from the renormalization group the “veto” effect as a person in a group can steer choices. Rory Sutherland suggested that this explains why some fast-food chains, such as McDonald thrive, not because they offer a great product, but because they are not vetoed in a certain socio-economic group –and by a small proportions of people in that group at that. To put it in technical terms, it was a best worse-case divergence from expectations: a lower variance and lower mean.

When there are few choices, McDonald’s appears to be a safe bet. It is also a safe bet in shady places with few regulars where the food variance from expectation can be consequential –I am writing these lines in Milan’s cental train station and as offensive as it can be to a visitor from far away, McDonald’s is one of the few restaurants there. Shockingly, one sees Italians there seeking refuge from a risky meal.

Pizza is the same story: it is commonly accepted food and outside a fancy party nobody will be blamed for ordering it.

Rory wrote to me about the asymmetry beer-wine and the choices made for parties: “Once you have ten percent or more women at a party, you cannot serve only beer. But most men will drink wine. So you only need one set of glasses if you serve only wine  –  the universal donor, to use the language of blood groups.”

This strategy of the best lower bound might have been played by the Khazars looking to chose between Islam, Judaism, and Christianity. Legend has it that three high ranking delegations (bishops, rabbis and sheikhs) came to make the sales pitch. They asked the Christians: if you were forced to chose between Judaism and Islam, which one would you pick? Judaism, they replied. Then they asked the Muslim: which of the two, Christianity or Judaism. Judaism, the Muslim said. Judaim it was and the tribe converted.

Lingua Franca

If a meeting is taking place in Germany in the Teutonic-looking conference room of a corporation that is sufficiently international or European, and one of the persons in the room doesn’t speak German, the entire meeting will be run in… English, the brand of inelegant English used in corporations across the world. That way they can equally offend their Teuronic ancestors and the English language. It all started with the asymmetric rule that those who are nonnative in English know (bad) English, but the reverse (English speakers knowing other languages) is less likely. French was supposed to be the language of diplomacy as civil servants coming from aristocratic background used it –while their more vulgar compatriots involved in commerce relied on English. In the rivalry between the two languages, English won as commerce grew to dominate modern life; the victory it has nothing to do with the prestige of France or the efforts of their civil servants in promoting their more or less beautiful Latinized and logically spelled language over the orthographically confusing one of trans-Channel meat-pie eaters.

We can thus get some intuition on how the emergence of lingua francalanguages can come from minority rules–and that is a point that is not visible to linguists. Aramaic is a Semitic language which succeeded Canaanite (that is, Phoenician-Hebrew) in the Levant and resembles Arabic; it was the language Jesus Christ spoke. The reason it came to dominate the Levant and Egypt isn’t because of any particular imperial Semitic power or the fact that they have interesting noses. It was the Persians –who speak an Indo-European language –who spread Aramaic, the language of Assyria, Syria, and Babylon. Persians taught Egyptians a language that was not their own. Simply, when the Persians invaded Babylon they found an administration with scribes who could only use Aramaic and didn’t know Persian, so Aramaic became the state language. If your secretary can only take dictation in Aramaic, Aramaic is what you will use. This led to the oddity of Aramaic being used in Mongolia, as records were maintained in the Syriac alphabet (Syriac is the Eastern dialect of Aramaic). And centuries later, the story would repeat itself in reverse, with the Arabs using Greek in their early administration in the seventh and eighth’s centuries. For during the Hellenistic era, Greek replaced Aramaic as the lingua franca in the Levant, and the scribes of Damascus maintained their records in Greek. But it was not the Greeks who spread Greek around the Mediterranean –Alexander (himself not Greek but Macedonian and spoke a different dialect of Greek) did not lead to an immediate deep cultural Hellenization. It was the Romans who accelerated the spreading of Greek, as they used it in their administration across the Eastern empire.

A French Canadian friend from Montreal, Jean-Louis Rheault, commented as follows, bemoaning the loss of language of French Canadians outside narrowly provincial areas. He said: “In Canada, when we say bilingual, it is English speaking and when we say “French speaking” it becomes bilingual.”

Decentralize, Again

Another attribute of decentralization, and one that the “intellectuals” opposing an exit of Britain from the European Union (Brexit ) don’t get. If one needs, say a three pct. threshold in a political unit for the minority rule to take its effect, and on average the stubborn minority represents three pct. of the population, with variations around the average, then some states will be subject to the rule, but not others. If on the other hand we merged all states in one, then the minority rule will prevail all across. This is the reason the U.S.A. works so well as, I have been repeating to everyone who listens, we are a federation, not a republic. To use the language of Antifragile, decentralization is convex to variations.

Genes vs Languages

Looking at genetic data in the Eastern Mediterranean with my collaborator the geneticist Pierre Zalloua, we noticed that both invaders, Turks and Arabs left little genes and in the case of Turkey, the tribes from East and Central Asia brought an entirely new language. Turkey, shockingly, still has the populations of Asia Minor you read about in history books, but with new names. Further, Zalloua and his colleagues have shown that Canaanites from 3700 years ago represent more than nine tenth of the genes of current residents of the state of Lebanon, with only a tiny amount of new genes added, in spite of about every possible army having dropped by for sightseeing and some pillaging. While Turks are Mediterraneans who speak an East Asian language, the French (North of Avignon) are largely of Northern European stock, yet they speak a Mediterranean language.

So:

Genes follow majority rules; languages minority rule

Languages travel; genes less so

This shows us the recent mistake to build racial theories on language, dividing people into “Aryans” and “Semites”, based on linguistic considerations. While the subject was central to the German Nazis, the practice continues today in one form or another, often benign. For the great irony is that Nordic supremacists (“Aryan”), while anti-Semitic, used the classical Greeks to give themselves a pedigree and a link to a glorious civilization, but didn’t realize that the Greeks and their Mediterranean “Semitic” neighbors were actually genetically close to one another. It has been recently shown that both ancient Greeks and Bronze age Levantines share an Anatolian origin. It just happened that the languages diverged.

The One-Way Street of Religions

In the same manner, the spread of Islam in the Near East where Christianity was heavily entrenched (it was born there) can be attributed to two simple asymmetries. The original Islamic rulers weren’t particularly interested in converting Christians as these provided them with tax revenues –the proselytism of Islam did not address those called “people of the book”, i.e. individuals of Abrahamic faith. In fact, my ancestors who survived thirteen centuries under Muslim rule saw advantages in not being Muslim: mostly in the avoidance of military conscription.

The two asymmetric rules were are as follows.

First, if a non Muslim man under the rule of Islam marries a Muslim woman, he needs to convert to Islam –and if either parents of a child happens to be Muslim, the child will be Muslim.

Second, becoming Muslim is irreversible, as apostasy is the heaviest crime under the religion, sanctioned by the death penalty. The famous Egyptian actor Omar Sharif, born Mikhael Demetri Shalhoub, was of Lebanese Christian origins. He converted to Islam to marry a famous Egyptian actress and had to change his name to an Arabic one. He later divorced, but did not revert to the faith of his ancestors.

Under these two asymmetric rules, one can do simple simulations and see how a small Islamic group occupying Christian (Coptic) Egypt can lead, over the centuries, to the Copts becoming a tiny minority. All one needs is a small rate of interfaith marriages. Likewise, one can see how Judaism doesn’t spread and tends to stay in the minority, as the religion has opposite rules: the mother is required to be Jewish, causing interfaith marriages to leave the community. An even stronger asymmetry than that of Judaism explains the depletion in the Near East of three Gnostic faiths: the Druze, the Ezidi, and the Mandeans (Gnostic religions are those with mysteries and knowledge that is typically accessible to only a minority of elders, with the rest of the members in the dark about the details of the faith). Unlike Islam that requires either parents to be Muslim, and Judaism that asks for at least the mother to have the faith, these three religions require both parents to be of the faith, otherwise the person says toodaloo to the community.

Egypt has a flat terrain. The distribution of the population presents homogeneous mixtures there, which permits renormalization (i.e. allows the asymmetric rule to prevail) –we saw earlier in the chapter that for Kosher rules to work, one needed Jews to be somewhat spread out across the country. But in places such as Lebanon, Galilee, and Northern Syria, with mountainous terrain, Christians and other Non Sunni Muslims remained concentrated. Christians not being exposed to Muslims, experienced no intermarriage.

Egypt’s Copts suffered from another problem: the irreversibility of Islamic conversions. Many Copts during Islamic rule converted to Islam when it was merely an administrative procedure, something that helps one land a job or handle a problem that requires Islamic jurisprudence. One do not have to really believe in it since Islam doesn’t conflict markedly with Orthodox Christianity. Little by little a Christian or Jewish family bearing the marrano-style conversion becomes truly converted, as, a couple of generations later, the descendants forget the arrangement of their ancestors.

So all Islam did was out-stubborn Christianity, which itself won thanks to its own stubbornness. For, before Islam, the original spread of Christianity in the Roman empire can be largely seen due to… the blinding intolerance of Christians, their unconditional, aggressive and proselyting recalcitrance. Roman pagans were initially tolerant of Christians, as the tradition was to share gods with other members of the empire. But they wondered why these Nazarenes didn’t want to give and take gods and offer that Jesus fellow to the Roman pantheon in exchange for some other gods. What, our gods aren’t good enough for them? But Christians were intolerant of Roman paganism. The “persecutions” of the Christians had vastly more to do with the intolerance of the Christians for the pantheon and local gods, than the reverse. What we read is history written by the Christian side, not the Greco-Roman one.

We know too little about the Roman side during the rise of Christianity, as hagiographies have dominated the discourse: we have for instance the narrative of the martyr Saint Catherine, who kept converting her jailors until she was beheaded, except that… she may have never existed. There are endless histories of Christian martyrs and saints –but very little about the other side, Pagan heroes. All we have is the bit we know about the reversion to Christianity during the emperor Julian’s apostasy and the writings of his entourage of Syrian-Greek pagans such as Libanius Antiochus. Julian had tried to go back to Ancient Paganism in vain: it was like trying to keep a balloon under water. And it was not because the majority was pagan as historians mistakenly think: it was because the Christian side was too unyielding. Christianity had great minds such as Gregorius of Nazianzen and Basil of Caesaria, but nothing to match the great orator Libanius, not even close. (My heuristic is that the more pagan, the more brilliant one’s mind, and the higher one’s ability to handle nuances and ambiguity. Purely monotheistic religious such as Protestant Christianity, Salafi Islam, or fundamentalist atheism accommodate literalist and mediocre minds that cannot handle ambiguity.)

In fact we can observe in the history of Mediterranean “religions” or, rather, rituals and systems of behavior and belief, a drift dictated by the intolerant, actually bringing the system closer to what we can call a religion. Judaism might have almost lost because of the mother-rule and the confinement to a tribal base, but Christianity ruled, and for the very same reasons, Islam did. Islam? there have been many Islams, the final accretion quite different from the earlier ones. For Islam itself is ending up being taken over (in the Sunni branch) by the purists simply because these were more intolerant than the rest: the Wahhabis, founders of Saudi Arabia, were the ones who destroyed the shrines, and to impose the maximally intolerant rule, in a manner that was later imitated by “ISIS” (the Islamic State of Iraq and Syria/the Levant). Every single accretion of Sunni Islam seems to be there to accommodate the most intolerant of its branches.

Imposing Virtue on Others

This idea of one-sidedness can help us debunk a few more misconceptions. How do books get banned? Certainly not because they offend the average person –most persons are passive and don’t really care, or don’t care enough to request the banning. It looks like, from past episodes, that all it takes is a few (motivated) activists for the banning of some books, or the black-listing of some people. The great philosopher and logician Bertrand Russell lost his job at the City University of New York owing to a letter by an angry –and stubborn –mother who did not wish to have her daughter in the same room as the fellow with dissolute lifestyle and unruly ideas.

The same seems to apply to prohibitions –at least the prohibition of alcohol in the United States which led to interesting Mafia stories.

Let us conjecture that the formation of moral values in society doesn’t come from the evolution of the consensus. No, it is the most intolerant person who imposes virtue on others precisely because of that intolerance. The same can apply to civil rights.

An insight as to how the mechanisms of religion and transmission of morals obey the same renormalization dynamics as dietary laws –and how we can show that morality is more likely to be something enforced by a minority. We saw earlier in the chapter the asymmetry between obeying and breaking rules: a law-abiding (or rule abiding) fellow always follows the rules, but a felon or someone with looser sets of principles will not always break the rules. Likewise we discussed the strong asymmetric effects of the halal dietary laws. Let us merge the two. It turns out that, in classical Arabic, the term halal has one opposite: haram. Violating legal and moral rules –any rule — is called haram. It is the exact same interdict that governs food intake and all other human behaviors, like sleeping with the wife of the neighbor, lending with interest (without partaking of downside of the borrower) or killing one’s landlord for pleasure. Haram is haram and is asymmetric.

From that we can see that once a moral rule is established, it would suffice to have a small intransigent minority of geographically distributed followers to dictate the norm in society. The sad news, as we will see in the next chapter, is that one person looking at mankind as an aggregate may mistakenly believe that humans are spontaneously becoming more moral, better, more gentle, have better breath, when it applies to only a small proportion of mankind.

The Stability of the Minority Rule, A Probabilistic Argument

A probabilistic argument in favor of the minority rule dictating societal values is as follows. Wherever you look across societies and histories, you tend to find the same general moral laws prevailing, with some, but not significant, variations: do not steal (at least not from within the tribe); do not hunt orphans for pleasure; do not gratuitously beat up passers by for training, use instead a boxing bags (unless you are Spartan and even then you can only kill a limited number of helots for training purposes)and similar interdicts. And we can see these rules evolving over time to become more universal, expanding to a broader set, to progressively include slaves, other tribes, other species (animals, economists), etc. And one property of these laws: they are black-and-white, binary, discrete, and allow no shadow. You cannot steal “a little bit” or murder “moderately”. You cannot keep Kosher and eat “just a little bit” of pork on Sunday barbecues.

Now it would be vastly more likely that these values emerged from a minority that the majority. Why? Take the following two theses:

Outcomes are paradoxically more stable under the minority rule — the variance of the results is lower and the rule is more likely to be emerge independently across populations.

What emerges from the minority rule is more likely to be be black-and-white.

An example. Consider that an evil person wants to poison the collective by putting some product into soda cans. He has two options. The first is cyanide, which obeys a minority rule: a drop of poison (higher than a small threshold) makes the entire liquid poisonous. The second is a “majority”-style poison; it requires more than half the liquid to be poisonous in order to kill. Now look at the inverse problem, a collection of dead people after a dinner party, and you need to investigate the cause. The local Sherlock Holmes would assert that conditional on the outcome that all people drinking the soda having been killed, the evil man opted for the first not the second option. Simply, the majority rule leads to fluctuations around the average, with a high rate of survival.

The black-and-white character of these societal laws can be explained with the following. Assume that under a certain regime, when you mix white and dark blue in various combinations, you don’t get variations of light blue, but dark blue. Such a regime is vastly more likely to produce dark blue than another rule that allows more shades of blue.

Popper’s Paradox

I was at a large multi-table dinner party, the kind of situation where you have to choose between the vegetarian risotto and the non-vegetarian option when I noticed that my neighbor had his food catered (including silverware) on a tray reminiscent of airplane fare. The dishes were sealed with aluminum foil. He was evidently ultra-Kosher. It did not bother him to be seated with prosciutto eaters who, in addition, mix butter and meat in the same dishes. He just wanted to be left alone to follow his own preferences.

For Jews and Muslim minorities such as Shiites, Sufis, and associated religions such as Druze and Alawis, the aim is for people to leave them alone so they can satisfy their own dietary preferences –largely, with historical exceptions here and there. But had my neighbor been a Sunni Salafi, he would have required the entire room to be eating Halal. Perhaps the entire building. Perhaps the entire town. Hopefully the entire country. Hopefully the entire planet. Indeed, given the total lack of separation between church and state, and between the holy and the profane (Chapter x), to him Haram (the opposite of Halal) means literally illegal. The entire room was committing a legal violation.

As I am writing these lines, people are disputing whether the freedom of the enlightened West can be undermined by the intrusive policies that would be needed to fight fundamentalists.As I am writing these lines, people are disputing whether the freedom of the enlightened West can be undermined by the intrusive policies that would be needed to fight Salafi fundamentalists.

Clearly can democracy –by definition the majority — tolerate enemies? The question is as follows: “ Would you agree to deny the freedom of speech to every political party that has in its charter the banning the freedom of speech?” Let’s go one step further, “Should a society that has elected to be tolerant be intolerant about intolerance?”

This is in fact the incoherence that Kurt Gödel (the grandmaster of logical rigor) detected in the constitution while taking the naturalization exam. Legend has it that Gödel started arguing with the judge and Einstein, who was his witness during the process, saved him.

I wrote about people with logical flaws asking me if one should be “skeptical about skepticism”; I used a similar answer as Popper when was asked if “ one could falsify falsification”.

We can answer these points using the minority rule. Yes, an intolerant minority can control and destroy democracy. Actually, as we saw, it willeventually destroy our world.

So, we need to be more than intolerant with some intolerant minorities. It is not permissible to use “American values” or “Western principles” in treating intolerant Salafism (which denies other peoples’ right to have their own religion). The West is currently in the process of committing suicide.

The Irreverence of Markets and Science

Now consider markets. We can say that markets aren’t the sum of market participants, but price changes reflect the activities of the most motivatedbuyer and seller. Yes, the most motivated rules. Indeed this is something that only traders seem to understand: why a price can drop by ten percent because of a single seller. All you need is a stubborn seller. Markets react in a way that is disproportional to the impetus. The overall stock markets represent currently more than thirty trillions dollars but a single order in 2008, only fifty billion, that is less than two tenth of a percent of the total, caused them to drop by close to ten percent, causing losses of around three trillion. It was an order activated by the Parisian Bank Société Générale who discovered a hidden acquisition by a rogue trader and wanted to reverse the purchase. Why did the market react so disproportionately? Because the order was one-way –stubborn — there was desire to sell but no way to change one’s mind. My personal adage is:

The market is like a large movie theatre with a small door.

And the best way to detect a sucker (say the usual finance journalist) is to see if his focus is on the size of the door or on that of the theater. Stampedes happen in cinemas, say when someone shouts “fire”, because those who want to be out do not want to stay in, exactly the same unconditionality we saw with Kosher observance.

Science acts similarly. We will return later with a discussion of how the minority rule is behind Karl Popper’s approach to science. But let us for now discuss the more entertaining Feynman. What do You Care What Other People Think? is the title of a book of anecdotes by the great Richard Feynman, the most irreverent and playful scientist of his day. As reflected in the title of the book, Feynman conveys in it the idea of the fundamental irreverence of science, acting through a similar mechanism as the Kosher asymmetry. How? Science isn’t the sum of what scientists think, but exactly as with markets, a procedure that is highly skewed. Once you debunk something, it is now wrong (that is how science operates but let’s ignore disciplines such as economics and political science that are more like pompous entertainment). Had science operated by majority consensus we would be still stuck in the Middle Ages and Einstein would have ended as he started, a patent clerk with fruitless side hobbies.

*  *  *

Alexander said that it was preferable to have an army of sheep led by a lion to an army of lions led by a sheep. Alexander (or no doubt he who produced this probably apocryphal saying) understood the value of the active, intolerant, and courageous minority. Hannibal terrorized Rome for a decade and a half with a tiny army of mercenaries, winning twenty-two battles against the Romans, battles in which he was outnumbered each time. He was inspired by a version of this maxim. At the battle of Cannae, he remarked to Gisco who complained that the Carthaginians were outnumbered by the Romans: “There is one thing that’s more wonderful than their numbers … in all that vast number there is not one man called Gisgo.

Unus sed leo: only one but a lion.

This large payoff from stubborn courage is not just in the military. The entire growth of society, whether economic or moral, comes from a small number of people. So we close this chapter with a remark about the role of skin in the game in the condition of society. Society doesn’t evolve by consensus, voting, majority, committees, verbose meeting, academic conferences, and polling; only a few people suffice to disproportionately move the needle. All one needs is an asymmetric rule somewhere. And asymmetry is present in about everything.

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Grand Bargain Taking Shape? U.S. To Pull Out Of Al-Tanf

Authored by Tom Luongo,

If you’ve followed my work for the past year you know that my default position has been there is a potential Grand Bargain for Peace in the Middle East.  From the moment President Trump first berated the Arabs in Riyidh last year on his first foreign trip for supporting terrorism, I’ve felt that the final outcome over Syria would culminate in such an agreement.

Elijah Magnier is reporting now that the framework for a U.S. pull out of its position at Al-Tanf near where the borders of Jordan, Syria and Iraq come together has pretty much been agreed upon in advance of Trump and Vladimir Putin’s Summit on July 16th in Helsinki.

Russian advisors visiting the Syrian capital Damascus are confident that the US forces will pull out of al-Tanf and will also aim to completely withdraw from north of Syria (al-Hasaka and Deir-Ezzour) in the next six months.

According to top decision makers based in Damascus, the US President Donald Trump is pushing his administration to approve an already prepared total withdrawal plan. Despite Trump’s limited knowledge of foreign policy and being unaware of the consequences of his decisions in the international arena, however, he found no convincing elements – said the sources, who asked to remain anonymous – in the presentation by his administration where US forces could benefit from the continuation of their presence in such a hostile environment and without suffering hits in the future. Trump’s biggest fear to see the US special forces deployed in the north of Syria and in Iraq returning to the country “in plastic bags”. He would certainly find it hard to offer any explanation for the US occupation of the Levant after the defeat of ISIS (the “Islamic State” group) or what remained of it in Syria and Iraq.

What Putin and Trump will work out is whether they can trust each other enough to allow each to do the job they need to do to make this work.  By the time the summit happens, the SAA Tiger forces should have taken back most of the province of Dara’a up to the Golan Heights, effectively restoring the 2011 border.

The Grand Bargain I’ve been proposing has been, simply put, the U.S. and the Russians acting as guarantors of the local actors behavior.  It requires Russia to remain in Syria indefinitely, supporting the Assad government’s rebuilding of the country.

And it requires the U.S. to remove its military presence, by declaring victory over ISIS and leaving.  But, in its wake leave an explicit guarantee of Israel’s and Saudi Arabia’s defense in the case of future Iranian adventurism.

The Russians act as a buffer to break up the Shia Crescent concerns of the Israelis, Turkey goes home, the Kurds negotiate a settlement with Damascus and the Saudis get to live a few more years before their domestic troubles overwhelm them.

I said on May 24th of last year just after Trump’s Speech in Riyadh:

Russia’s alliance with Iran and China is unbreakable at this point. They have designs to build a trade empire across Asia that the world hasn’t seen in centuries. Putin has the means and the respect by all parties on both sides to remove Iran’s troops from Syria and get Hezbollah to stand down if the right deal is signed.

He has the military might to make it all stick.

The Turks and President Erdogan have over-played their hand and have been abandoned by both Putin and Trump. He will behave himself or be removed from power. His days of playing both sides against each other are over…

… He [Putin] and Trump are in opposite domestic positions. Trump needs this win to shut up the loony left. Putin doesn’t, even though he’s facing a re-election campaign in 2018.

So, setting the table for Trump to come in, statesmanlike, and broker an historic peace deal is exactly his style.

We’re not there yet, but the pieces are in place. As long as Trump doesn’t make another mistake like the al-Shairat bombing and keeps a lid on his military commanders he will eventually gain Putin’s trust.

This story has not been without it twists and turns.  There have been the multitude of false flags, provocations and prevarications from Israeli Prime Minister Benjamin Netanyahu to try and scuttle this deal.

It even survived another colossal Trump mistake in responding to another false flag attack on civilians with chemical weapons this year.

But, over the course of it all, Trump has held firm while Putin made deals with everyone to give them a little of what they want.  The Saudis are going to get slightly more market share in oil to help with their fiscal situation.  Israel will likely get to keep the Golan Heights in perpetuity, much to the pleasure of the board of Genie Energy.

Trump and Netanyahu still wants regime change in Iran as part of this deal, but Trump is in no real position to get that concession from Putin.  That is exactly what the U.S. media is trying to position him to demand.

Bloomberg is trying to make this deal sound like Putin is betraying Iran by making deals over oil production caps, while offering up Iran’s withdrawal from Syria as some ‘big win.’

For Iran, the overriding goal is to maintain its influence inside Syria and keep supply lines open, said Ehud Yaari, an Israel-based fellow at the Washington Institute.

“Russia has an interest to bleed Iran in Syria, to weaken Iran but not collapse Iran because it may lose the Assad regime, which is its major card,” said Sami Nader, head of the Levant Institute for Strategic Studies in Beirut. “They want Iran in check and under control.”

This is pure Netanyahu-esque spin.  Russia doesn’t have the goal of bleeding out Iran in Syria, Israel does.  And every one of Bibi’s little lies have been calculated to convince Trump to extend the U.S. presence there indefinitely for his reasons.

If Magnier is correct then this strategy has failed completely.

Assad isn’t going anywhere and Iran has no desire to stay in Syria once the U.S. leaves.  As the Western media keeps trying to tell us, there’s a revolution happening back home.  IRGC forces are needed there, which is why Netanyahu is abjecting against any deal with Putin before said overthrow of the mullahs takes place.

Too bad Putin and Trump have both put the kibosh on that.  Trump needs another major geopolitical win to crush his deep state and Democratic (I repeat myself) opposition in the mid-terms while also changing the mandate for NATO.

Russia has Iran’s back when it comes to sanctions, fuel marketing, oil exports and the like.  Iran is key to the success of uniting Central Asia under China’s One Belt, One Road initiative, which includes making India and Turkey partners in the project.

For Putin to get a restructuring of NATO, border security in Syria, draw-down of U.S. troops there and probably in Afghanistan as well and potentially recognition of Crimea, there has to be something else on the table.

The bargaining chips are Jerusalem, Yemen, Nordstream 2 and Iranian regime change.  Nordstream 2 and regime change are off the table.  The big question is are the other two within their purview to negotiate.

Doubtful, certainly at this point in time.

For now, the Grand Bargain is taking shape.  Phase one is the hardest part, the trust part. Since U.S. and Russian military commanders have been in communication for nearly three years coordinating around each other it seems plausible the trust is there.

The work’s been done.  Now, just sing the deals and remove/reposition the troops.  It is the next phase that is murkier.  Trump wants explicit guarantees from Putin that Iran won’t develop a nuclear weapon.

For him to get that guarantee means removing the regime-change threat from the table as well as allowing Tehran to develop trade relations without the U.S. stifling them.  This is why I think the most likely casualty in this situation will be Yemen.  Iran will have to withdraw support from the Houthi rebels like Trump will remove the U.S. troops from Syria.

As one of my readers said to me privately, the other day, this is beginning to feel like 1945, the only difference is that Trump and Putin aren’t meeting at Yalta, to remake the world.

*  *  *

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Vacant Lot In Silicon Valley Listed For $15 Million

Silicon Valley is one of the most expensive areas to live in the United States. In its epicenter, Palo Alto, California, the median price for a single-family home is roughly $2.6 million. Meanwhile, the median price of a single-family home across the country is $240,000. The housing bubble in Silicon Valley extends throughout the San Francisco Bay area to the north, which has developed into the housing affordability crisis.

Not too long ago, we reported on an 897 square feet Palo Alto bungalow – recently listed for $2.6 million. At $2,800 per square foot, the price was equivalent to the most extravagant penthouses in New York City and or Miami.

We even covered a listing back in April, where someone in the southern region of the San Francisco Bay Area listed their burned-out shack in San Jose’s Willow Glen neighborhood for $800,000.

Now, another absurdity has crossed our real estate bubble radar — this time, it is a vacant, one-acre dirt lot in Palo Alto, listed for a whopping $15 million.

The vacant lot at 4103 Old Trace Road “is the ONLY FLAT VACANT Acre parcel in Palo Alto available,” according to the Redfin listing. The plot of land is minutes away from venture capital firms, Stanford University, downtown Palo Alto, and about 15 minutes from Google’s Googleplex Headquarters.

The listing says “Dream it & Build it,” however the future owner must first shell out $15 million-plus the cost of a new structure. The listing emphasizes “Location! Location! Location!,” and tells prospective homebuyers to “visualize an exquisite villa with vineyard” on the 1.03-acre parcel.

The “exquisite villa” would be lacking privacy, as it is situated on the corner of a congested two-lane road. Nevertheless, this is the price one may pay very late into an overheated real estate market fueled by a tech bubble that could be large than in 2000. Tech workers in the region have the highest incomes in the country, and couple it with 10-years of zero lower bound rates via the Federal Reserve, well, a massive housing bubble was formed.

To visualize the extent of the housing bubble in Silicon Valley, Wolf Richter provides an excellent chart below:

“The index for “San Francisco” includes the counties of San Francisco, Alameda, Contra Costa, Marin, and San Mateo, a large and diverse area consisting of the city of San Francisco, the northern part of Silicon Valley (San Mateo county), part of the East Bay and part of the North Bay. The index jumped 1% from March, 11% from a year ago, and 38% from the insane peak of Housing Bubble 1. It’s up 164% since 2000.”

With new warnings of a global slowdown, the yield curve 2/10 nearly flat, James Powell’s auto-tightening, quantitative tightening, stretched real estate prices, trade wars, overvalued stock and bond valuations, and an exploding deficit, this is not a recipe for a sustained booming economy. President Trump and Wall Street have recently made their rounds of force-feeding economic propaganda to Americans, hoping that they could spur consumption, as if the heavily indebted middle class needs to buy more things they do not need, nor stuff they cannot afford.

As for now, it seems as Trump’s debt-fueled tax cut has spurred a monstrous stealth QE round for corporations, including trillions in buybacks, dividends, and merger and acquisitions.

The can has been effectively kicked down the road for the tech sector, but eventually, tax reform will evaporate and lead to the next round of tech layoffs. When that occurs, well, it could be straw that broke the camel’s back for real estate markets in Silicon Valley. Buyer beware.

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Headless Robespierre’s Cautionary Tale For The ‘Alt Left’ Unleashed On America

Submitted by John Griffing,

America is on the cusp of something it has never truly experienced: mob rule.

To “feed” a mob, witch-hunts are essential. New enemies must be in constant supply to keep the mob moving. Problematically, witch-hunts never end well for the witch-hunters.

Just ask Maximilien Robespierre, one of the chief architects of the French Revolution and the infamous “Reign of Terror.”

It was 1794. Heads were rolling, literally, and “Madame la Guillotine” was more popular than ever. At first, the mob was content with the heads of King Louis XVI and Queen Marie Antoinette. The king bankrupted France by helping America win its independence with mountains of debt, all while a horrible famine ravaged the nation simultaneously. Many died of starvation. It was during the famine that the queen told her subjects, “Let them eat cake.”

With the king and queen gone, the mob’s appetite grew. They now required the heads of the aristocracy.

After the aristocracy was gone, Robespierre’s Committee on Public Safety (a massive misnomer) began sending anyone and everyone to the Guillotine — even other members of the committee itself — in order to satisfy the appetite of the mob. Georges Danton, the other influential thinker behind the French revolution, was executed by the committee.

Royals lurked under every rock and behind every tree, and unsupported suspicion was the only thing needed to deprive a person of their head.

In the ultimate twist of irony, the mob eventually required Robespierre’s head.

The lesson? For mobs, it’s never enough. And communities that passively surrender to mob rule in the face of civil unrest are like those who feed a crocodile, hoping to be eaten last.

Replace the revolutionary French with the “alt left,” and a disturbing pattern emerges. With the violence perpetrated by the “alt left” reaching barbaric levels, it is time to stop tolerating lies about their motives.

The“alt left” is not against racism or white nationalism. They are for anarchy — and that’s a big difference. In short, the “alt left” is a mindless mob.

And just like Robespierre’s “Reign of Terror,” the “alt left” mob may eventually accomplish its presumed objectiveforcibly removing President Donald Trump from office, one way or another. But that will likely not be enough to satisfy the moving target of “alt-left” bloodlust, because the stated objective is never the real objective.

For the mob, breaking stuff and hurting people (often for pay) is the real objective. And for Antifas, the ever-evolving “cause” is a facade to justify animal behavior unfit for a free and open society.

Sure, not all Democrats are Antifas, but all Antifas are undoubtedly Democrats. Consider that top Democrats — many of them seasoned public servants — now regularly incite violent riots and actively promote the president’s assassination.

Here’s a list of 133 savage acts of documented violence (or incitement) by far-left Democrats against Trump supporters, Republicans and White House officials, including actor Peter Fonda’s call to throw Trump’s 11-year-old son Barron in a cage with pedophiles, and the latest example of outright assault against a person wearing a MAGA hat — this time a young teenager.

The violence advocated by the far left makes them complicit in the breakdown of society and the subsequent rise of mob rule. And the advocates of mob violence are not just fringe radicals or a few nut-jobs. Their ranks also boast senior Democratic Party officials and members of former President Barack Obama’s administration.

Only a week ago, California Democratic U.S. Rep. Maxine Waters openly called for the “harassment” and physical intimidation of Trump officials. Democratic Sen. Chuck Schumer condemned Waters, but it must be remembered that last year he told New York state to pull police protection from First Lady Melania Trump and Barron. Democratic 2016 vice presidential candidate Tim Kaine called for riots in streets after Trump’s victoryand was joined by former U.S. Attorney General Loretta Lynch, who also called for riots.

Former CIA Director John “Benghazi” Brennan — a man who once voted for a Communist presidential candidate and may have converted to Islam — twice called for a coup against Trump. Obama’s Undersecretary of Defense for Policy Rosa Brooks went as far as putting a plan for a military coup in writing around the same time CNN was running hypothetical “what if Trump was brutally murdered before the inauguration?” segments.

Democratic-aligned mainstream media and left-leaning entertainment icons are also guilty of perpetuating the rise of mob rule. Former MSNBC heavyweight Keith Olbermann begged foreign intelligence agencies to overthrow the U.S. government, and did not see the irony. More recently, the Washington Post’s Jennifer Rubin asked mobs to harass Trump and White House officials for “life.”

And what about entertainers? Well, they are getting a lot less entertaining, and a lot more felonious. Bill Maher joked that Ronald Reagan shooter John Hinckley, Jr. should be released, so that he can kill Trump, and only a few months ago, comedienne Kathy Griffin photographed herself holding a life-like wax model of Trump’s severed head in the style of ISIS. Last week, far-left filmmaker Michael Moore said he would lead a citizen army of “one million people” to “surround” Washington, D.C. in order to prevent lawful Supreme Court nominations by Trump. Famous musicians are also promoting violence. Madonna said she is “thinking” of bombing the White House to kill Trump, Snoop Dog released a music video depicting Trump’s murder and singer John Legend applauded Rep. Maxine Waters for advocating violence, while subsequently making similar appeals himself.

By any measure, Democrats now support mob ruleEvery single time a Democrat advocates violence in place of discussion, they are supporting mob rule, not democracy, and they should be treated as potentially hostile.

When someone – anyone – starts a conversation with an assumption that the other person is evil, there can be no further conversation. Moreover, logical debate is not possible with violent mobs in ninja costumes viciously attacking those with whom they politically disagree.

History repeats itself, especially when mobs burn the pages on which it is written, and destroy monuments to the events history records. Tragically, Democrats only pay attention to history when it involves Nazis, and mostly fictional Nazis.

Robespierre speaks from the grave: mobs are never good, especially for the mobs.

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