Archive for July 2011
Finally, Mt. Evans Again
Over the last couple of years, I’ve been unable to race Mt. Evans for whatever reason. This year I couldn’t race it because we had our 9th annual ATF party out east in Bennet, CO on race day. Hopefully next year I’ll be able to give it a go. I also haven’t actually ridden Evans for a couple of years. The last time I tried, with my Uncle Steve in town, we got shut out because of re-paving. We were only able to get to the visitor center about 18 miles and 11,000 feet up. Anyways, Beefy called me on Friday and suggested I ride Evans with him and a friend on Saturday. I told him about the race happening that day and suggested we all go on Sunday instead. He agreed. It was set. Sunday we’d meet across the street from Squaw Pass – the manly way of climbing Evans by the way – and ride the 33 miles straight up the beast.
Long story short, I felt really good all the way up to the visitor center. I left Beefy a couples miles in because I wanted to ride my own pace. I must have passed 15 or 20 people on the way up just riding solid TEMPO. A couple people rode with me for a bit and we chatted about the perfect weather and perfect scenery all around us. The views were amazing as always. Upon hitting the visitor center to fill bottles, the next 15 miles to the top were less solid. I went from riding zone 3 to zone 2 pretty quickly. Around mile 28, I went to barely eeking out zone 2. In the last couple of miles I was struggling to push 150 watts. It was brutal. I’m not sure what happened to me, but it got really tough in the homestretch. Regardless, I wasn’t concerned with keeping any sort of pace, I was more concerned with taking in the beauty that surrounded me. I took mental snapshots of the incredible landscape, as it turned from lush forest to the rocky moonscape above treeline.
Now for some pictures from the top of the world:
This is "the sign."
Having seen this fortress thing for the second time, I still have no idea what it was.
This is the payoff. A view from the top of the world.
The obligatory shot with THE sign. (the sun was in my eyes)
Then on my way down, I came across the BEEF himself:
The Beef almost made it up this time, but the clouds were looking too ominous...
Thoughts on the Price System
When Vladimir Lenin came to power in 1917, he mistakenly believed that running the Soviet economy would be easy. I remember reading a quote from him where he more or less said, “I know a lot of businessmen and they are not nearly as smart as I am. If they can run a business successfully, I can run an economy. After all, an economy is just one giant business.” Under War Communism, Lenin and his team nationalized everything and set all the prices in the economy. The result of these actions is not surprising to anyone who understands markets: millions of people died of starvation and Lenin suffered several major uprisings. After 3 years of this, Lenin woke up to the reality of the starving masses and implemented the New Economic Policy (NEP). The NEP was Lenin’s attempt at introducing markets – albeit on a small scale – to his centrally planned Soviet economy. With the introduction of some small markets and market prices (signals), agricultural production soared and many people who would have died under War Communism were fed and survived. The NEP was incredibly successful at pulling the Soviet economy out of its death march.
Where did Lenin go wrong? Lenin suffered from what Hayek called the “fatal conceit.” He believed he could design a functioning economy with the help of some smart friends. What he did not recognize was that markets work because of the decentralization of knowledge and of people acting on that knowledge. Knowledge is tacit, incomplete, local, and diffuse. There is no possible way one man, no matter how smart, can know what millions upon millions of people know individually. Moreover, there is no way one person, or group of people, can accurately replicate the signals that arise from the spreading of knowledge.
Prices are signals traversing from location to location. As people interact with each other in the marketplace using their local, tacit, and incomplete knowledge, prices emerge from the transactions. They contain important information that would be impossible to uncover otherwise. Like whether there is a drought in southern Florida or hoards of gluten-free fans in Boulder. Yes, it would be easy to observe a drought in Florida or gluten-free fanatics in Boulder, but prices reflect what those particular situations mean for the real people interacting there. They quantify the subjective values and desires of the people in Florida and Boulder. All while simultaneously indicating where scarce resources ought to flow. Additionally, with repeated interactions, prices are never “out of date.” Again, you can observe a drought in Florida, but only prices can dictate how hard the orange community was hit, the depth of the devastation, and how long it will take for them to recover. A person cannot replicate these vital processes.
Prices allow for a profit and loss system. The importance of profit and loss cannot be overstated. Mises proved, long before 1989, that socialism was impossible because a socialist economy “cannot calculate.” What he meant was, when the means of production are owned by the government, there are no markets for these capital goods. Without prices in the capital goods market, there are no prices in the consumer goods market. So what’s the big deal? As the Soviets learned, with no prices to determine what should be made and how much, there is no rational way to determine the allocation of scarce resources. Massive inefficiencies would be putting it lightly.
For example, Lenin knows that his people like bread and vodka. Okay, well how much bread should be made? How much vodka? How much bread should go to St. Petersberg? How many kinds of vodka should be produced? What ratio of bread to vodka makes sense? Do the people want more wheat bread or more oat bread? How the hell do we get bananas over here??? These questions are impossible to answer. Lenin could only guess. Worse, innovation is completely stifled. What incentive is there to come up with new and better products? And how would Lenin know what new and better products people want? (Can you imagine trying to figure out how many soccer balls, nails, and vacuums to make?)
Profit and loss are the measuring stick to determine whether a business is using its resources efficiently. When a business earns a profit, this signal is absolutely crucial. It tells the owner that not only are they using resources efficiently, they are providing a good or service to consumers that they want and in a way that pleases them. On the contrary, when a business loses money, it is a signal that they need to shape up or go under. The loss part of the profit and loss scenario is just as critical, if not more so, than the profit part. Losses are what weed out bad businesses and transfer their previously owned labor and resources elsewhere, where they can be put to better use. (Side note: this is yet another reason why bailouts are so devastating to an economy. You destroy wealth by insulating bad companies from going under).
Mises’ a priori critique of socialism was devastating in that it conceded all the assumptions that socialists wanted (a “new socialist man,” observing world prices and using them, altruistic responses to incentives, etc) and still defeated them. Without prices, an economy cannot rationally allocate scarce resources. Without prices, there is no profit and loss mechanism to alert the planners of what is working and what is not. It is literally impossible to not starve a population on a massive scale if a country rejects markets and attempts to centrally plan their economy.
Lenin was no doubt a very smart man. Definitely smarter than anyone I’ve ever met. But he could not know, nor replicate, the knowledge embedded in the price signals that emerge from a functioning marketplace. If you’ve ever seen a long line for a good or service, then odds are someone messed with the prices. Take for example the food lines in Soviet Russia or the Weimar Republic. Or take the long lines for gas during the Nixon administration’s price controls. Lines are an indication that prices are not accurately reflecting current conditions. And it doesn’t necessarily have to be government intervention. If a venue does not price concert tickets high enough, there will be a line. If a road owner does not increase the price to drive on his road during peak hours, then there will be traffic (sound familiar…?) But at least when a private entity misses the correct price, they can adapt to the situation and correct it either in the short term or in the future. Government on the other hand, does not face the same incentives.
The foremost authority on prices and the importance of knowledge is Nobel Prize winner F.A. Hayek. Hayek has received some much deserved popularity of late due to a certain rap video or two, but perhaps his greatest contribution (in my opinion) is his essay, “The Use of Knowledge in Society.”
Hayek demanded his readers respect the power of the price system. I took heed many years ago. I hope you will too.
Consider Consent
Imagine a violent gang moved into your neighborhood. They began to rob houses and residents at will. No one could stop them, they were far too strong to resist. Feeling empowered, the gang decreed that they were not going anywhere and residents who did not like their company ought to leave. Liking your neighborhood and its surroundings, leaving town seemed like a poor choice. However, the gang was terrorizing the neighborhood, including many of your friends.
The question is: if you do not leave town, are you “consenting” to the gang’s rule? What if the gang formally writes a contract that states their bad intentions and includes a clause guaranteeing no harm to residents who choose to leave?
What if the violent gang only harms 30% of the residents in the neighborhood, leaving the other 70% completely alone. Do the 30% have to leave?
What if the gang takes from the 30% and gives some of the stolen goods to the remaining 70%? The gang then holds an election. What percentage of the neighborhood has to vote to approve of the gang’s activities for the gang’s rule to be just?
Now consider this thought experiment:
“The Tale of the Slave”
from Robert Nozick, Anarchy, State, and Utopia, pp. 290-292.
Consider the following sequence of cases, which we shall call the Tale of the Slave, and imagine it is about you.
1. There is a slave completely at the mercy of his brutal master’s whims. He often is cruelly beaten, called out in the middle of the night, and so on.
2. The master is kindlier and beats the slave only for stated infractions of his rules (not fulfilling the work quota, and so on). He gives the slave some free time.
3. The master has a group of slaves, and he decides how things are to be allocated among them on nice grounds, taking into account their needs, merit, and so on.
4. The master allows his slaves four days on their own and requires them to work only three days a week on his land. The rest of the time is their own.
5. The master allows his slaves to go off and work in the city (or anywhere they wish) for wages. He requires only that they send back to him three-sevenths of their wages. He also retains the power to recall them to the plantation if some emergency threatens his land; and to raise or lower the three-sevenths amount required to be turned over to him. He further retains the right to restrict the slaves from participating in certain dangerous activities that threaten his financial return, for example, mountain climbing, cigarette smoking.
6. The master allows all of his 10,000 slaves, except you, to vote, and the joint decision is made by all of them. There is open discussion, and so forth, among them, and they have the power to determine to what uses to put whatever percentage of your (and their) earnings they decide to take; what activities legitimately may be forbidden to you, and so on.
Let us pause in this sequence of cases to take stock. If the master contracts this transfer of power so that he cannot withdraw it, you have a change of master. You now have 10,000 masters instead of just one; rather you have one 10,000-headed master. Perhaps the 10,000 even will be kindlier than the benevolent master in case 2. Still, they are your master. However, still more can be done. A kindly single master (as in case 2) might allow his slave(s) to speak up and try to persuade him to make a certain decision. The 10,000-headed monster can do this also.
7. Though still not having the vote, you are at liberty (and are given the right) to enter into the discussions of the 10,000, to try to persuade them to adopt various policies and to treat you and themselves in a certain way. They then go off to vote to decide upon policies covering the vast range of their powers.
8. In appreciation of your useful contributions to discussion, the 10,000 allow you to vote if they are deadlocked; they commit themselves to this procedure. After the discussion you mark your vote on a slip of paper, and they go off and vote. In the eventuality that they divide evenly on some issue, 5,000 for and 5,000 against, they look at your ballot and count it in. This has never yet happened; they have never yet had occasion to open your ballot. (A single master also might commit himself to letting his slave decide any issue concerning him about which he, the master, was absolutely indifferent.)
9. They throw your vote in with theirs. If they are exactly tied your vote carries the issue. Otherwise it makes no difference to the electoral outcome.
The question is: which transition from case 1 to case 9 made it no longer the tale of a slave?
Mike Horgan Hill Climb Race Report
Going into the race today, Primal had very little in the way of strategy or big aspirations. It was going to be a war soaked with suffering and pain. My thought going into the race was that it would be relatively calm on Canyon Road and then get really hectic about 500 meters before the left turn onto Magnolia – where the fireworks would begin. Then my thinking was to make the selection on Magnolia (or at least keep them in view) and use the rest of the race to fight (or bridge) for the win or the podium.
Promptly at 8:25am, we headed out onto Canyon Road. The pace was quicker than I expected, with much of the group strung out in a single line. My positioning for the first couple of miles sucked, but I could see the Zilla guy on the front keeping the pace high. Why he was choosing to do this was beyond me. As we made our way up Canyon, the cars started to back up next to us and we were forced to push our single file line down the right shoulder. Very shortly we came upon a grizzly scene: an ambulance and paramedics attending to a badly hurt man who appeared to have been the official’s moto. The motorbike was on the ground near the man facing the wrong direction. Not a good sight to see. We made our way through the wreck and continued on. Then, to my surprise and sheer joy, a rider came along side of the pace line with no one behind catching the free ride. “Don’t mind if I do,” I said to myself. This rider was like a godsend. He allowed me to sit on his wheel the entire rest of the way up Canyon. Not only that, he was moving us to the front and keeping us in the front. It was like having a teammate I didn’t know, wearing another kit, selflessly helping me. Thanks random dude!
When the left turn onto Magnolia came into sight, BW shot straight to the front and hammered it. I tucked into the line, about 4th wheel. Goal #1 accomplished. I made it onto Magnolia with very few riders ahead of me, and thus, very few riders to go past as they all started dropping like flies. And indeed they did. I knew this was where I could make some moves and identify who would make up the podium. The main contenders were two Zilla guys and the really strong Mexican rider from University bikes we raced with at Dead Dog. I followed their wheels, but mostly the U-bikes guy. The Zilla guys on the other hand were starting to make a little gap on us. I rode with the U-bikes guy for a bit on the sadistically steep road going around 6mph with a 50rpm cadence. It was brutal.
Eventually, the U-bikes fella started gaping me. He would dance on his pedals like Contador around the really steep switchbacks and I would attempt to follow. His standing was much better than my standing. It was starting to take a toll on me. His gap was growing. In other words, the podium was dancing away from me.
“Justin. Go get the podium. It’s right there.” I kept repeating that statement in my head over and over again.
I’ll save you the gory details of my suffering. But rest assured, I suffered and suffered and suffered. The first 4 miles of Magnolia are so steep and so slow, they seem to take forever. I remember looking down at my computer and seeing just over 7 miles ridden. “We still have 14 to go. Fuck.” Then I’d look just ahead of me and see the podium riding away. “Fuck. I gotta get that guy.” And so I tried. But as hard as I pushed, I could not bridge the gap to 3rd place. Every time I’d make some headway and get closer. Close enough to spit on his back wheel, he’d look behind, see me, and turn it up a notch. Headway eliminated.
2K to go. My legs are broken.
Right before we hit the rolling dirt section, a rider with some Zipp 303s rolled up beside me. We worked together through most of the dirt section. He took some great pulls on the flats and downhills in the dirt. I kept him motivated by reminding him that the guy in the white jersey right in front of us was the podium. “There he is. Go get him.” So we inched closer and closer. About the time he looked to be in striking distance is about the time I started to come undone. The guy who was working with me took a monster pull on a relatively flat section and I tried to come around. It was a bit too much. I told him that I was cracking and that if he had the legs, he should go get that podium. My words seemed to have inspired him, because he took off and caught the U-bikes guy. Good for him.
After coming out of the dirt section, we turned right onto what I believe was Peak to Peak Highway. It was mostly downhill until the final turn towards Eldora Ski Resort. My legs were in dire straights on the downhill. I did a lot of tucking and hurting. Making the left towards Eldora marked 2 miles to go. My legs were toast. I pushed down on my pedals and was rewarded with searing pain coming from my acid-filled legs. “There goes my podium. There goes 4th place.” I can’t go any faster. I can’t bridge the gap. I can’t even make myself pant anymore. It’s like the Dead Dog TT all over again. I hit the 1 mile to go marker. Ugh. “I can’t take another mile of this.” A couple more minutes passed and I could see Brika in the distance. Phew. I knew I was close to the finish. I crawled my way up to her and then past her as she took photos of my feeble attempt at pedaling with broken legs. With the finish line in sight, a guy in a black and green kit went by me. “What the…” I looked at his number. It was 400 hundred something. Shit. This guy just took 5th place from me. And guess what? There is nothing I can do about it. (Garmin file)
And that was it. 6th 7th place. No win. No podium. Just 6th 7th place and a couple of broken ass legs.
Oh, and a damn good time with friends.
Blake and I. We are JACKED.
Team Primal Racing p/b First Bank:
NOTE: I contacted the ACA and they insist that the results posted at the end of the race (with timing chips) were wrong. So they did indeed celebrate the wrong 5 guys on the podium. I was not 6th says the ACA, I was 7th. Which I still can’t understand. I was there when the race exploded and I saw who took off and gapped me. It was not 4 guys, it was 3 guys. It was the 2 Zilla race leaders and the Mexican guy of U-bikes who I had in my sights for 15 miles. Then I was caught and dropped by the guy with the 303s and then passed with 500 meters to go by some other dude when I had broken legs. I honestly have no idea where this other phantom rider came from. Oh well. I didn’t win. That much I know for sure.
Economic Cycles 