You are standing in the flea market, staring at a pile of jade rings in your hand. That jade guy is a scoundrel! Everybody at the market uses his jade rings as money, and that has made him rich. But now he has apparently run out of jade, so it looks like he's making plastic rings and calling them jade. The question is: how long are people going to keep on using them for money? If you keep them for a week, will they be worth the same as now, or worth nothing?
A voice at your shoulder makes you jump. "You thinking what I'm thinking?"
"Just wondering whether to keep these jade rings, or spend them today."
"Because they could be worth a lot less next week. I can sell you relief from that worry. I've got a system. You pay me twelve rings now, and I guarantee to pay you back ten rings next week, plus as many more rings as it takes to make up for any loss of value. For two rings, you can protect the value of ten rings."
"But if the value doesn't go down that much, I'll lose."
"But if it goes down more, you'll gain."
Clearly, this guy thinks the value of jade rings will not go down very much, or he would not offer that trade. If you think it will go down more, you might make the trade. That would be called a "derivative," because the value it brings to market is derived from value already in the market.
If the protection seller offered his scheme to a passive non-thinker, he would produce only a snicker. "Oh sure! I give you twelve rings and you give me back ten rings! What kind of an idiot do you think I am?" A good answer would be: "Derivative. The only time your thinking has any value is when it's derived from somebody else."
Thinking is the means I use to stay alive. If I cannot or do not think, then I must try to use the thoughts of others to keep me alive. If I have a strong back and willing arms, thinkers may hire me for physical labor, and maybe I'll get by with just enough thought to find the work. Of course, if disaster strikes, there'll be no survival by quick thinking. If that prospect is more frightening than the prospect of mental effort, I might ask myself a question: "What is thinking, anyway? Should I try it?"
Thinking is differentiation and integration. It is telling the difference, and putting things together.
"Well, sure," says my passive mind. "That's what senses do. They respond to difference. It's automatic."
Is it automatic to see the difference between real jade rings and fake jade rings? If not, I must make a comparison. That is, I must look for difference. If I see one, then I must decide what it means. That is, I must relate it to other things. To think, I must make comparisons and combinations. My mind does not do these things by itself, like my heart beats by itself. My mind, as the center of my human consciousness, is self-regulating. That is, I do it. I compare and combine. If I wait for some automatic function to compare and combine, nothing happens.
The great puzzlement of the passive mind is that, as it waits for thinking to happen, thinking happens only to other people. The passive mind does not know that those other people made it happen. It does not believe in making things happen. So it concludes that other people are better or luckier. Apparently, the best it can do is copy the thinking of others. That's how the passive mind becomes a derivative mind.
If my mind is passive, then understandably I hate to compare it with other minds. I hate to compare my accomplishments with those of others. I hate to compare my derivative ideas with the original ideas of others. I learn to avoid making any comparisons. Little do I know that by that action, I have killed my mind.
The difference between an active and a passive mind starts at the fundamental level. An active mind is eager to compare everything to everything else, to see the amount of difference, as a means of relating things. The passive mind makes comparisons only when prompted by an outside force—like getting burned on the stove, or losing half the value of stored money. The owner of the passive mind is the one who says, "Why do I have to learn everything the hard way?"
When the active mind, in making comparisons, attends to the amount of difference, that is measurement. One can compare jade rings to plastic rings, and see a difference, and then compare all the rings to the hand holding them. Measured against the hand, the rings are more alike. Plastic rings are similar to jade rings, but not as valued.
Those are the tools of the active mind: difference and similarity. By comparing everything to everything else in endless combinations, the active mind discovers how things differ, and how they are related. The result is not a grasp of some bit of reality, but a grasp of all reality. The active mind can see each particular in relation to the whole. It sees things in context.
A child whose mind was too dormant to discover similarity, could not learn to function at all. Mental passivity, however, does cause many people to function without seeing things in context. The passive mind tries only to grasp the bit of reality it is forced to deal with at the moment. It sees no advantage to knowing the big picture. It does not think of the big picture as a means of understanding the little picture, but as a useless distraction.
This mental mistake is taught to first graders by teachers who hate what they think of as "short attention spans". "That has nothing to do with this!" they scold. "Pay attention to one thing at a time!" In fact, active minds learn as they grow up to pay attention to everything at once. They drive cars on the freeway while listening to the radio, planning the day, and conversing about the latest Washington scandal. A concert pianist pays attention to ten fingers racing up and down eight-eight keys, while judging the effect of several pedals in interaction with the acoustics of the hall and the tone of that particular piano, while coordinating his efforts with those of a hundred players in an orchestra, and the direction of a conductor, while reminding himself to prepare for that difficult fingering in the next bar, while remembering the entire score.
Since no one has ever found the limits of how many things can be done all at once, it is ludicrous to assume, as passive minds do, that one should pay attention to only one thing at a time. Instead, one should ask how the mind does all things at once.
The answer is that thinking consists of finding differences and making combinations. When you learn to drive a car, you combine a complicated interlocking series of actions into one action: driving. The separate actions become habitual, and connected together in your mind. Then you can combine driving with other actions, like talking, which also consists of a series of complicated habits connected together in your mind. The mind makes combinations of combinations without known limit.
Is there anywhere a mind so passive that its owner cannot learn to drive? For one saddled with a passive mind, that is an important question. It shows that passivity is not incapacity. A passive mind can choose at any time to start comparing everything to everything else. At first, that might seem pointless, but not for long. "Wait! Is trading at the flea market really like trading commodity futures? Is using jade for trading at the flea market really like using gold in international trade? Maybe economics is not that far over my head after all."
The active mind uses comparison and similarity to discover what things have in common. When a commonality is fundamental enough to help understand many things at once, it is called a principle. Trading at the flea market is, in principle, the same as trading in any market. That is, the similarities are more fundamental than the differences.
Therefore, to understand a complicated and exotic market, you can start by understanding the flea market. To understand human cell metabolism, you can start by understanding a one-celled animal. To understand universal gravity, you can start by watching an apple fall from a tree.
Since the passive mind does not put things together, it does not understand the big picture. But alas, since it does not take things apart, it also does not understand the little picture. To analyze is to examine the parts of a combination in relation to one another, and in relation to the whole. To analyze a machine is to examine each part in relation to the other parts, and in relation to the principles of operation. To analyze a market is to study how trades are made, in relation to the role of money, in relation to the role of rights, as they all depend on reason. That is, a market consists of a means of exchange, a medium of exchange, a right to the exchange, and a method to bring these into being.
As an example of applying principles, analyze unemployment. In the labor market, people trade their effort for money, as a step in the process of trading effort for goods. If some of the labor on offer is not bought, then apparently all labor has been done. But life requires constant labor, so all labor is never done. The glut must be caused by an artificially high price. Some kind of should committee has decreed some price that is not a market price.
You can see this by getting a job at the flea market. You are out of jade rings, but you are determined to buy that bracelet for your wife. So you offer to set up and take down booths in trade for enough jade to buy the bracelet. But you are only offered two rings for doing this, and you need four. "Well," you say finally, "how about if I come back next week and work for the other two?"
But then that means your employer has to lend you the other two rings until next week, for which he demands payment. So you end up working three times for meager pay. The price of the bracelet turns out to be a lot of effort. But at least you get the bracelet.
Or do you? What if a should committee decrees that four rings is too little pay for that much work, and you must be paid the four rings for working one time? Will the employer still hire you at all, or will he simply do what he was going to do in the first place, put up and take down his own booth? The committee did you a favor, except now you cannot afford the bracelet at all.
Passive non-thinkers hear wages talked about as if they were not prices, and accept that, because their ideas are derived from other minds. They assume that imposing wages is not the same as imposing prices. Even if they see that imposing prices kills a market, they don't think that imposing wages would kill the labor market. They operate on the fantasy that if you set a lower limit on wages, people who are objectively determined by the market to be worth less than that will have their wages increased instead of withdrawn. They think this because the subjectivists have declared that it should be so.
Subjective thinkers want prices to go down, and wages to go up. That is, they want to trade less effort for more goods. When you think of it that way, there is an obvious way to do it: increase the productivity of the effort. Employers do that by putting in machines that multiply effort, in hopes of increasing profits.
But passive and subjective thinkers hate machines. They blame the machines for throwing people out of work. Even as they complain that the streets are not getting cleaned, they assume that there is just not enough work to go around. So they cheer the efforts of all the should committees to limit machines and decree minimum wages. "Thank goodness for those committees! Lets hope they'll also do something about this unemployment!"
Would anybody be unemployed in a free labor market? Subjectivists have tried hard to say yes, but they are defeated by their own definitions. If "unemployed" refers to those who want to trade effort for money, and if a market is a process in which people who want to trade can trade, then by definition, the trading gets done. What the subjectivists really mean is that the trading does not get done at a "fair" price—as decided, of course, by themselves.
Has anybody met the merchant who thinks his goods sell for just the right price? The market gives him no choice, however. He gets the market price, or no price. If he or a committee tries to impose some other price, then it is either above or below the market price. If above, buyers go elsewhere, and he goes out of business. If below, buyers all come to him, so he runs out of goods without profit, and goes out of business.
Since passive non-thinkers tend to get low wages, they are happy to work at an imposed price—if they can find work. Those who give it a moment's thought find work by illegally accepting the market price. Then they figure out how to increase their value, and get a raise.
Subjectivists show their frustration at this state of affairs by hurling insults at the very people they want to get higher pay from. Employers, they say "could" pay what they "should" pay, but prefer to "exploit" the downtrodden. This frenzy of subjective thought is so taken for granted that businessmen rank down there with lawyers and politicians in general esteem. It is time to take a close look at the mental mistake of subjectivity.
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