January 5, 2022
Fair Shares: Who Owes What to Whom?
H. Woody Brock
President, Strategic Economic Decisions, Inc.
Richard Trenner, Introducer, and H. Woody Brock
Minutes of the 14th Meeting of the 80th Year
In President Stephen Schreiber’s place, Gregory Dobbs called the meeting to order at 10:15 AM. Attendance was recorded at 149 persons. David Vilkomerson, substituting for the absent Peter Epstein, read the minutes of the prior meeting.
Three guests were introduced by Richard Trenner: Paul Haaga, Hope Winthrop, and Stephen Brock.
Mr. Dobbs noted that President Stephen Schreiber had, at the previous meeting, thanked everyone who helped to organize and run Old Guard meetings and social events during 2021. Gregory thanked Stephen himself for all he does for us and congratulated him on taking a brief sabbatical from his Old Guard responsibilities.
Richard Trenner introduced H. Woody Brock, president, Strategic Economic Decisions, Inc. Horace “Woody” Brock is a well-known economist and political philosopher and the founder of a successful think tank called Strategic Economic Decisions. Dr. Brock has a B.A., an M.B.A., and an M.S. (mathematics) from Harvard, and an M.A. (International Relations) and Ph.D. (mathematical foundations of political economy) from Princeton. He advises corporations and other institutions about structural changes in the global economy. He has been an invited speaker at the World Economic Forum, the CIA, the Aspen Institute, and the boards of directors of corporations and banks, private equity, hedge funds, etc. He is also wonderful pianist and a superb art collector. His topic today is the profound social, economic, and ethical issues that he explores in his new book Fair Shares.
Dr Brock began by explaining that his analytic approach is to lay down axioms about what you want to solve and then find a solution consistent with those axioms. He said that data plays no role and, to quote him, “Data is for low IQ people.”
He then introduced his first main topic: the decline of the West and particularly the decline of the United States. He described the demographic changes in the last 70 years, which have resulted in the number of children per woman falling to 1.4 in the Northern Hemisphere, well below the number required to maintain the population. This means there will be no workers to build and maintain our infrastructure. In the past, large families and extended family structures provided the social care, welfare, and care for the sick and aged. With small families we will need institutions to provide these services, but the demographic catastrophe will mean there will be no workers for these institutions.
His second main theme was borrowing and debt. The population is weak and spoiled. Unemployment payments are preposterous. The inflation we see is pure Keynesian economics: printing money, giving it to the whole population, generates excess demand, which, by definition, means higher prices. Couple that with supply shortages and the result is inflation. Dr. Brock pointed out that the Banking Act of 1933 was designed to prevent the conditions that caused the crash of 1929 and the Depression. He said we did not have a crisis until the 1980s when Alan Greenspan agreed to widespread financial deregulation, believing that the market and competition were sufficient. However, as Adam Smith pointed out, in the absence of proper regulation, the banking sector will over-leverage. One consequence was the financial crisis of 2008. Dr. Brock argues that the pattern is repeating itself today. Despite this, he argued that the demographic crisis will mean inflation in the future will be caused by wage and price rises rather than increased money supply.
Dr Brock moved on to discuss what constitutes the power of a nation. He listed four ingredients: a strong military; committed allies; presentation of a greater threat to potential opponents than they present to you; and, above all, the resolve to exercise this power to oppose and defeat threats. He believes that over recent decades the populations of Western nations expect high incomes and benefits, and their governments feel no need to increase taxation to pay for these entitlements. The result is that we lack resolve.
Dr. Brock described the impact of novel mathematical techniques to extend our knowledge. He cited Newton’s application of calculus to the physics of motion and Einstein’s use of Riemannian geometry in general relativity. The application of game theory has allowed him to identify solutions to new problems, such how to tax income and wealth fairly and how to provide universal health care at reasonable cost.
Dr. Brock finished by saying that he hoped his talk had been a little provocative.
Respectfully submitted,
Bernard Abramson
Three guests were introduced by Richard Trenner: Paul Haaga, Hope Winthrop, and Stephen Brock.
Mr. Dobbs noted that President Stephen Schreiber had, at the previous meeting, thanked everyone who helped to organize and run Old Guard meetings and social events during 2021. Gregory thanked Stephen himself for all he does for us and congratulated him on taking a brief sabbatical from his Old Guard responsibilities.
Richard Trenner introduced H. Woody Brock, president, Strategic Economic Decisions, Inc. Horace “Woody” Brock is a well-known economist and political philosopher and the founder of a successful think tank called Strategic Economic Decisions. Dr. Brock has a B.A., an M.B.A., and an M.S. (mathematics) from Harvard, and an M.A. (International Relations) and Ph.D. (mathematical foundations of political economy) from Princeton. He advises corporations and other institutions about structural changes in the global economy. He has been an invited speaker at the World Economic Forum, the CIA, the Aspen Institute, and the boards of directors of corporations and banks, private equity, hedge funds, etc. He is also wonderful pianist and a superb art collector. His topic today is the profound social, economic, and ethical issues that he explores in his new book Fair Shares.
Dr Brock began by explaining that his analytic approach is to lay down axioms about what you want to solve and then find a solution consistent with those axioms. He said that data plays no role and, to quote him, “Data is for low IQ people.”
He then introduced his first main topic: the decline of the West and particularly the decline of the United States. He described the demographic changes in the last 70 years, which have resulted in the number of children per woman falling to 1.4 in the Northern Hemisphere, well below the number required to maintain the population. This means there will be no workers to build and maintain our infrastructure. In the past, large families and extended family structures provided the social care, welfare, and care for the sick and aged. With small families we will need institutions to provide these services, but the demographic catastrophe will mean there will be no workers for these institutions.
His second main theme was borrowing and debt. The population is weak and spoiled. Unemployment payments are preposterous. The inflation we see is pure Keynesian economics: printing money, giving it to the whole population, generates excess demand, which, by definition, means higher prices. Couple that with supply shortages and the result is inflation. Dr. Brock pointed out that the Banking Act of 1933 was designed to prevent the conditions that caused the crash of 1929 and the Depression. He said we did not have a crisis until the 1980s when Alan Greenspan agreed to widespread financial deregulation, believing that the market and competition were sufficient. However, as Adam Smith pointed out, in the absence of proper regulation, the banking sector will over-leverage. One consequence was the financial crisis of 2008. Dr. Brock argues that the pattern is repeating itself today. Despite this, he argued that the demographic crisis will mean inflation in the future will be caused by wage and price rises rather than increased money supply.
Dr Brock moved on to discuss what constitutes the power of a nation. He listed four ingredients: a strong military; committed allies; presentation of a greater threat to potential opponents than they present to you; and, above all, the resolve to exercise this power to oppose and defeat threats. He believes that over recent decades the populations of Western nations expect high incomes and benefits, and their governments feel no need to increase taxation to pay for these entitlements. The result is that we lack resolve.
Dr. Brock described the impact of novel mathematical techniques to extend our knowledge. He cited Newton’s application of calculus to the physics of motion and Einstein’s use of Riemannian geometry in general relativity. The application of game theory has allowed him to identify solutions to new problems, such how to tax income and wealth fairly and how to provide universal health care at reasonable cost.
Dr. Brock finished by saying that he hoped his talk had been a little provocative.
Respectfully submitted,
Bernard Abramson