Focal Points- Part IV: Truth, The Ultimate Focal Point!

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In-game theory, the concept of a focal point is a conceptual locus of convergence in the absence of pre-arranged communication. Generally, these mutually agreed-upon center points are culturally contingent. Although, there is one focal point that transcends culture and is arguably the ultimate point of unspoken convergence; that is truth. Some social commentators claim that truth is relative, quickly dispelling the argument that truth is a universal focal point. The facts are the facts. When something is axiomatically true, it is self-evident. To claim that truth is subjective is a puzzling assertion. We cannot simply deny the laws of mathematics, then suddenly, the rules governing the order of operations become invalid. The assumption of truth being subjective confuse methodology with results. Pluralism is valid so long as it reflects the truth. For example, there are multiple ways to solve an equation, but only one correct answer.

When people formulate rules, they must do so in a manner congruent with the immutable laws of the social and natural sciences. Otherwise, we will fall victim to the natural consequences of violating these eternal laws. Truth is such a magnetic focal point that it is inescapable. Sure, it is possible to contrive a convincing delusion, but while delusions may dissolve, the truth remains fixed. Regardless of whether we are truth-orientated immutable facts pull us in like the force of gravity bringing us back down to Earth. We can fight gravity; however, even when interpersonal communication is absent, any semi-rational person already knows that such resistance is inevitably futile.

Legal Tender Laws and The Circulation of Money

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It may be fair to suggest that Thier’s Law and Gresham’s Law are not necessarily opposing ideas. Rather they are both rule-based phenomena. Essentially, the nature of legal tender laws dictates which variety of money (higher-valued money or lower-valued money) is hoarded. How can we be so sure? Let’s take Thier’s Law for example. Let’s take the below definition of the monetary concept from an outstandingly well-written undergraduate thesis on cryptocurrency.

“Thiers’ Law, named after French historian Adolphe Thiers, asserts that in the absence of legal tender laws forcing them to accept both currencies, sellers will choose to transact with the currency of higher perceived long-term value. (P.9)”

In the context of this very description of the concept, the mention of the “absence” of legal tender laws comes into play. Meaning that given there are no rules coercively forcing us to accept the two currencies of varying degrees of intrinsic value at the same nominal value. Giving the observant reader the impression that the occurrence of Thier’s Law is the byproduct of the rules governing monetary exchange. In contrast, Gresham’s Law has always implied the existence of legal tender laws. The overvalued money with the distorted nominal value would never be assigned such a value by the market. Such a proclamation could only come in the form of government fiat. Gold and silver (bi-metallism) are of equal nominal value because the king says so. Regardless of the edicts of royal decree individual market participants are going to respond accordingly to the irrational rules set forth by the king. That would be to use the less valuable silver in day-to-day transactions and save the gold.

Thier’s Law Applied to Human Capital

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This blog entry was inspired by feedback from Enrique at the Prior Probability blog.

If Gresham’s Law applies to retain human capital in the job market, is it possible that Thier’s law (p.9) could also be applicable in certain contexts? On money, when legal tender laws forcing vendors to accept both forms of money at nominal value, economic agents will choose to transact with the higher valued currency. Presenting an axiom that is the opposite of Gresham’s Law, “ Good money drives out bad money”. Typically in the arena of monetary economics, the divide between advocates of Gresham’s Law and Thier’s Law is a sharply delineated dichotomy. Most proponents of one will not defend the possibility that the principle could apply to the circulation of money.

However, in terms of the circulation of human capital these concepts are not necessarily opposed. Employee retention is the byproduct of several highly qualitative attributes that are generally specific to a certain firm. In corporate vernacular, the term “culture” is thrown around so frequently that it has become a buzzword deeply embedded in the American psyche. Companies such as Google, go to great lengths to demonstrate that they have a flexible, open, and innovative corporate culture. The veracity of the claims is ultimately judged by the perceptions of the individual employees. One employee may adore working at Google, while their colleague completely despises the company’s ethos. Making the ebbs-and-flows of human capital even more complex. Employee retention at the individual level is based upon a multitude of various factors. The aggregated collection of the opinions of all the individual employees regarding their work-life satisfaction tends to paint a fuller picture. If while perusing Glassdoor, you happen to see a company with eighty-five two-star ratings, chances are this is not the petty slander of a few disgruntled employees. This is why oftentimes companies will periodically send out surveys to their employees in an attempt to measure overall morale throughout their organization.

Putting aside the highly individualized variable of career satisfaction metrics for an entire firm, if there is a pattern of talented employees leaving, there is a retention problem. Sometimes this may be isolated to a specific department even if the firm as a whole has no issues keeping competent and productive workers. Certain companies and even job roles select for specific attributes that may not be conducive to attracting skilled and reliable labor. Some industries are notorious for high turnover rates, one salient example being the hospitality industry. I remember a few years back, being in between jobs, so I briefly worked at a call-center. For me, this was an income stream until I found something else, for many of the people in my training class it was a lifelong career path. This path was a volatile one. Staying only a few months at one company and then abruptly quitting, generally with no notice. Upon receiving a new job offer, I gave my supervisor my two-week notice and he was astonished by the fact I even bothered to take this step. After only six months, only five people (including myself) out of the twenty-five in my training class remained. Industries and job roles with high turnover may be more willing to retain employees with fewer skills or with a poor performance history, due to the outflow of higher-skilled employees. Perfectly mirror the effect described in Thier’s lawinstead of money, the commodity that is flowing out of the firms is quality human capital.

The question becomes how can these opposed ideas transpire concurrently in the same labor market or even the same company. The answer to this question is predicated upon a “rules of the game” type logic. Each company and each interior department within a firm operate as governing bodies directing the task of workers. Meaning both varying capacity function as “ruler-makers” within the company. Think of corporate policy as being analogous to the federal government, while the department formulated rules are similar to state law. Clearly, in most cases, corporate policy supersedes department policies. If these rules are too onerous or unjust there is little a qualified and skilled employee could other than leave. Either accept and abide by the rules set forth or resign. Resignation being a clear withdrawal of consent on the part of the employee. One relevant example of this is companies still drug testing for marijuana in states where it is legal. Granted, it is an organization’s prerogative to make employees refraining from drug use a contingency of employment. However, if enough high-caliber job candidates take to smoking cannabis they may be in a bit of a quandary. A few years back the FBI ran into this problem due to their “drug-free” employment policy.

If the rules governing the management of a firm are too oppressive, people with options are going to find another job opportunity. What the company is left with are those who lack the skills, ambition, and conscientiousness required for productivity. The employer is left with the staff that clings to their jobs for dear-life as odds are they do not carry too much value on the job market. Much how department policies such as catering to senior and skilled workers can impose an effect similar to Gresham’s Law the opposite is also true. If you create rules that disincentives tenure and self-development, odds are you will lose a lot of great workers. The kind of workers that can be a game-changer in managing strategic customers. As we have observed with the call-center example, frequently due to the oppressive rules, low pay, and dismal work environment people with potential tend to leave these positions. Leaving you with the unskilled and the desperate who are locked-in to the role due to their circumstances. Keeping this dynamic in mind, it is a wonder why people expect quality service whenever they call tech support.

Public Trust Doctrine: Part III- A Liberated Doctrine and Compromised Property Rights

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Part I

Part II


The initial shift towards an unconstrained Public Trust Doctrine may have begun with the Illinois Central case. The emergence of a truly fluid Public Trust jurisprudence did appear until the early 1970s. The cultural revolution of the 1960s permeated an activistic ethos that eventually made its way to the legal system. It was first noted by legal scholar Joseph Sax, an environmental lawyer who was a strong advocate of the conservation movement. Professor Sax was the first legal theorists to suggest the Public Trust Doctrine was not being used to its full potential. Sax believed that a more liberal application of the doctrine could be utilized to benefit the objectives of the environmental movement. Implicitly arguing that the preservation of natural resources is within the scope of the legal construct. Due to the fact that nature itself is a commons, that we all benefit from clean water, air, and a modest reserve of nonrenewable resources.

However, over the years the Public Trust Doctrine has been extended far beyond the original intentions of the concept. The doctrine was initially applied to manage public waterways, fishing, and commercial purposes. Since its inception in the United States has been stretched to be utilized in the interests of recreation and political objectives. The most disturbing aspect of this evolution to an unchained doctrine has been the blatant erosion of private property rights. In most applications of land seized by the government in the name of public trust, the takings clause under the fifth amendment. Meaning that equivalent property value compensation is not required for land commandeered for the “public good”. The lack of adequate compensation for land taken operates as nothing more than a redistribution of property. Whether this transfer is for the moral good of clean water, recreation, or free passage through a navigable body of water, it is the same result. As the doctrine becomes more malleable, less justifiable these coercive acquisitions become. The hapless side effect of the courts showing less discipline in their application of this construct starts to become arbitrary.

An Unchained Doctrine:

As previously mentioned, in the 1970s the doctrine began to radically drift away from its Common Law roots. These ties were severed by the “prima facie rule that extends state title to submerged lands, rather than as evidentiary presumption of the title” (p.195). Several courts have ever ruled that the alienation of any public lands is a clear violation of the state’s Public Trust obligations. Despite the fact that these opinions run counter decisions made by the Supreme Court (p.195). The 1970s being the formative years of the environmentalism movement, legal scholars started to turn to the doctrine as a means of reaching lofty political goals. Those sympathetic to the conservation movement calling for “..effective judicial intervention..” (p.195). Posing as the haunting battle cry of the ambitious legal scholar Joseph Sax. Sax called for a liberating doctrine. Fully proclaim the need shift in the doctrine’s utilization in his seminal paper: The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention (p.196)

Even a decade later Sax is just as fervent as he was back in the 1970s of being a proponent of loosely applied Public Trust Doctrine. In his paper,  Liberating the Public Trust Doctrine from Its Historical Shackles, Sax surmises that the concept has been constrained by historical precedence. He succinctly distills the general idea of the doctrine to the single function of generating stable expectations of common resources (p.4). He suggests is the purpose of all property rights is to create and maintaining expectations. Keeping within the obligations of the trustee (the government) must utilize mechanisms to preserve the stability of these expectations. Identify areas of destabilization that can benefit from a creative application of the construct (p.9). From the standpoint of judicial consistency, the advocacy of a “use-it-where-it-fits” approach is quite a trouble. If advocates of the doctrine want to expand the scope of its use, they could at the very least formulate unwavering parameters for its application. In the event, the situation does not meet the test, the doctrine cannot be used. However, this would require the Public Trust Doctrine to transition from a semi-unwritten rule to a codified legal convention. While there are many troubling aspects regarding making the doctrine into statutory law, at least there would be some institutional pressure to constrain frivolous or inappropriate application.

Sax goes so far as to suggest that the doctrine can and should be applied with no regard for previous case precedence. In other words, no need to cite previous cases because that will only limit the doctrine from achieving its ends. Staying within the context of historical uses of Public Trust only serves to continue to hold it back from serving its purpose (p.10). Past case precedence is the ultimate safeguard against arbitrary adjudication of law. To exposit the idea that this is unnecessary in the discretionary deliberations surrounding the doctrine is wrong on so many levels. With no institutional constraints or reliance on past adjudicatory history, the doctrine becomes formless. No rules limiting it, allowing it to become amorphous and be applied at the pleasure of the judge. Making it subject to the biases and whims of the judge(s) ruling on the case.

The First Victim of The Freed Public Trust Doctrine:

Just v. Marinette County

 One of the first cases to feature Sax’s brand of jurisprudence was in the Just case, decided in 1972 two years after his paper has been published (p.196). In 1961, the Just family purchased approximately thirty-six acres of land “along the south shore of Lake Noquebay”. The area in which they had purchased this land was designated as marsh/swampland. However, Marinette county’s shoreland zoning ordinance number 24, went into effect in October 1967 requiring permits for any alterations impacting wetland habits. In the months of February and March 1968, Mr. Just filled in an area of his property that was technically considered wetlands with sand. The litigant did so without procuring a permit. It should be noted that it has also been claimed that he was denied the ability to obtain a permit by the county. Operating as a circuitous form of unconstitutional “takings”(p.196). After all, he did own the portion of the shore in which he did fill in with sand. But it was ruled by the court that the police power of the state can extend to the enforcement of zoning laws. Declaring it within the scope of the state’s Public Trust duties to preserve the natural condition of the wetlands for navigation, fishing, recreation, and “scenic beauty” (p.196). Mr. Just was denied this right to alter his property in the absence of any degree of just compensation.

Regardless of the intention or objectives of denying the alteration of the wetlands two concerns arise. The first concern being would couldn’t have Just have been grandfathered out of having to acquire a permit? He did purchase the land years prior to the implementation of the new zoning ordinances. If we go by the laws governing water use rights (a different but adjacent area of law) in certain parts of the country there is a first-come, first-served policy. This is known as an appropriative system of water rights. Generally under this type of system whoever has the oldest prior use date of harvesting the water to beneficial use has the primacy to water usage. Keeping this logic in mind, could the same apply to other laws as well. Hence, why excluding the litigant from the permit requirement makes sense. He bought the land prior to the implementation of the zoning requirements, he gets grandfathered in.

The second and more profound concern is what does this court decision say about the state of property rights? There wasn’t any direct evidence that Mr. Just’s actions engendered any genuine harm to the environment. Per the courts’, ruling it appears there was a strong emphasis on keeping the wetlands intact. Versus cited or proving ecological harm caused by filling in that patch of wetlands with sand, the court justified the uncompensated takings with a blanket explanation defending their position. Of the core reasons, recreation and “scenic beauty” were cited as being reasonable justifications for invoking police power of the state. Both seem awfully frivolous reasons to violates some property rights. Also, how does the court ascertain the objective of maintaining “scenic beauty”. Isn’t that an extremely subjective criterion? One man’s eyesore is another man’s oasis.