While I do not think this a Happy Thanksgiving for the reasons laid out in this blog and on the AIER site, I will thank Feedspot for listing my blog among the Top 35 American history blogs: https://blog.feedspot.com/american_history_blogs/. I may not get a ton of hits but I mostly attract quality readers.
This blog will show that financial history is both intrinsically interesting and of crucial importance to many aspects of public policy, ranging from Social Security to construction to macroeconomic stability.
Wednesday, November 25, 2020
Thank You Feedspot!
Friday, November 20, 2020
Unhappy Thanksgiving: Why We So Stoopid
HUMAN HUBRIS, THE HOLIDAYS, AND THE COVID CRISIS
This holiday season of senseless lockdowns, I would like to remind humanity that it ain’t “all that,”
not by a long shot, in the hopes that it displays more humility and less hubris during the next pandemic.
For all of our technology, Homo sapiens, wise humans, are more like Homo non sapientem, not so
wise humans. In fact, one of the wisest of our species, Jared Diamond, wrote a book explaining why we
should consider ourselves nothing more than a third type of chimpanzee.
If unwilling to change our genus to Pan, we should at least change our species name to Homo
superbus, or arrogant humans. The only objectively intelligent thing humans ever did was to unleash
the selective power of markets. Even that, though, is a relatively recent phenomenon understood and
embraced by far too few members of the species.
I say the selective power of markets because when governments allow them to function freely markets
work akin to natural selection. Most types of living things possess genes that vary from individual to
individual and that produce variations in key attributes like size, color, resistance to disease, behaviors,
and myriad other characteristics. In a given set of environmental circumstances, some of those
variations help individual organisms to reproduce relatively more successfully than organisms of the
same species that do not possess the genes for the successful trait. Unless environmental conditions
change, over generations the species will increasingly be composed of individuals with the
advantageous trait.
Evolution by means of natural selection is not “just a theory,” it is a powerful way of understanding the
world that has been observed in numerous instances even on an historical timescale. Perhaps the
most famous example occurred in Britain, where industrialization darkened trees with soot, leading to
the selection of darker-colored individuals of a certain species of moth that birds found more difficult to
spot, catch, and eat than the lighter-colored moths. As Britain de-industrialized and tree barks became
less sooty and hence lighter in color, selection worked in the opposite direction as the darker-colored
moths became easier to spot and hence were more likely to be eaten before passing on their genes,
so the lighter-colored moths again proliferated. Changes in the prevalence of different colored moths,
like all selective processes, occurred automatically, without the need to invoke a deity or other type of central planner.
Human economies also work through a selection process, though one Homo superbus rarely
acknowledges. Producers make goods with various attributes. Consumers select some of those
goods, causing them to be (re)produced. Others they eschew, causing their discontinuance
(extinction). Instead of birds eating moths, the selective pressure comes from people deciding which
type of hat to buy, which brand of toothpaste to prefer, which restaurant to frequent, and so forth. (The
difference is the moths who get consumed by birds are the losers while the producer whose goods get
consumed are the winners.)
Producing the right good at the right time looks like business or inventive “genius” but we cannot reject
the hypothesis that it is due simply to dumb luck, just as it was for the moths born a color that
happened to match the trees. As is well known, most entrepreneurial endeavors fail within the first five
years and the most even highly-motivated angel investors and venture capitalists can do is to winnow
out the most likely losers. And selective pressures continue throughout firm existence. In a famous
1950 article in the Journal of Political Economy entitled “Uncertainty, Evolution and Economic
Theory,” American economist Armen A. Alchian argued that the firms that come closest to
maximizing profits, even if due simply to dumb luck, are the most likely to survive.
In short, no intelligent design or strategic management plan is necessary for organisms or firms to
become adapted to their economies or environments, both of which automatically select the most
adapted and weed out the least adapted.
But humans, a staunch defender of Homo sapiens might retort, domesticated many plant and animal
species, forcing them to work for us (e.g. horses), or make stuff we want (e.g. sheep), or even to
render our breakfast easier to fetch, and tastier too (e.g. egg-laying chickens and milk cows). In other
words, wise humans boot-strapped ourselves out of the Stone Age and into modernity. It took us 10,000
years but, clearly, humans rule!
Typical Homo superbus thinking I say. We think ourselves gods who can simply dominate nature and
bend economic reality to our will. While we can certainly influence the environment or the economy, we can
barely understand either, much less control them in any deep or lasting way. Moreover, the
domestication of wild species to produce cattle, cats, dogs, goats, horses, sheep, and other barnyard
critters shows not our dominance but just how little control we really have.
The traditional story of animal domestication, it turns out, is all wrong. Humans did not choose species
to domesticate, then bravely capture and tame wild varieties and selectively breed them to serve us. If
anything, domesticates banked on humans. Do not confuse that claim with the joke about cats having
domesticated humans rather than vice versa. (Anyone who has lived with a feline understands the
sentiment!) Rather, it is a claim about the process of domestication first laid out for a popular audience
by Stephen Budiansky in his 1992 book The Covenant of the Wild: Why Animals Chose
Domestication. It shows that the individual animals that allied with humans were rewarded with higher
levels of reproduction than their wild progenitors, just as the darker-colored moths were rewarded when dark, satanic mills dominated Britain’s environment.
Budiansky shows that man’s best friend, the dog, was likely the first domesticate and the direct
descendant of Canis lupus, the wolf, humanity’s longtime foe and competitor as apex predator. Their
millennia long partnership seems bloody unlikely, yet it occurred and without the aid of a brave, genius
caveman. An example of spontaneous order one might call it.
First came toleration. Wolves and humans are both dangerous critters that hunt in packs. Better to live
and let live than to try to exterminate the other side. Inevitably, though, humans and wolves went after
the same prey at the same time and discovered that they had specialized, complementary skills. In
short, they learned that they could eat more critters by working together rather than apart. Wolves have
much keener senses of smell and hearing than humans, who are better at dispatching large,
dangerous prey animals at a safe distance with their arrows, javelins, spears, and stones.
(Rudimentary pieces of technology evolved from trial and error and selection as much as from innate
intelligence.)
Wolf packs and human hunters began to travel in tandem because it was mutually advantageous to do
so. (Caribou and humans still do the same, trading the salt in human urine for herd culling.) Naturally
less aggressive wolves were welcomed close by but aggressive wolves were obviously problematic
and hence driven off and perhaps even killed. Humans became the alphas, the leaders, of relatively
tame packs of wolves, some of the pups of which were genetically predisposed to see humans not as
threats but as lead wolves. They were subservient and hence valuable additions to camp and within
several generations were boon companions.
That’s right, your canine best friend doesn’t think it is human, it thinks you are a dog, an alpha dog. Your
dog is in essence a wolf, but one at first unconsciously infantilized by human beings and only in the last
few hundred years deliberately bred for specific traits.
That story of canine domestication is more than mere speculation as another type of wild canine,
Vulpes vulpes (the fox) was deliberately domesticated in the twentieth century in a Soviet experiment.
It took only five generations to go from Reynaud (the name that horse-riding fox hunters gave their wily
wild quarry) to essentially another breed of dog eager to lick your face and chase a ball.
Okay, but surely humans deliberately domesticated camels, cattle, goats, horses, llamas, sheep, and
such. In fact, according to some animal rights activists, we enslaved them for our own selfish benefit.
Not so much as it turns out. Many creatures benefit from interacting, even trading, with Homo
superbus and prefer to live in our midst to a greater or lesser degree. In sub-Saharan Africa the wild
Greater Honeyguide bird (Locator locator) calls to and directs humans to trees containing active
honeybee hives, allowing the dull bipeds to do the hard work in return for the yummy leftovers.
Similarly, ravens will lead humans to big game animals so that they can feast on the entrails and
carcass after the hunter does the hard work of harvesting and butchering the beast. A tribe in
Kamchatka even trades with mice, exchanging the carbohydrate-laden tubers the mice collect in winter
for bits of protein-rich fish. (The humans figured out that when they simply stole the tubers the mice
died.)
Many species, like raccoons (Procyon lotor), eat human trash and leave behind nothing but a mess.
Pests we call them. But some animals, like goats, offered up milk in return. While it seems “obvious”
that any creature with genes that predisposed it to allow humans to kill it would soon lose that trait or go
extinct, domesticates have done amazingly well in relative and absolute terms. They far outnumber
wild creatures and make up the bulk of the terrestrial world’s mammal biomass.
Think about it: humans destroy the habitat of wild creatures that offer them nothing in return but
preserve and even create habitat for critters that offer up something in exchange, be it a Yellowstone
photo op or a plate of yummy chislic. Again, conscious genius is not necessary to achieve the
outcome, just some genetic variation upon which selective pressures toward docility, fur production,
tastiness, and such could work.
The novel coronavirus, by contrast, has not placed much selective pressure on the human genome
because the vast bulk of its victims are well past prime reproductive and even child rearing age.
Humans may not be so lucky next time but likely will remain insufficiently wise and too arrogant to learn
from our many mistakes. We convince ourselves that we have developed wonderful technologies but it
might all be due to selective pressures on more-or-less random ideas. Humans did not even jumpstart
the Agricultural Revolution by deliberately domesticating animals, which it turns out evolved to live with
us because it benefited them. In short, we cannot outlaw a virus nor make the economy blossom by
diktat. All we can do is to improve our institutions to leverage the awesome power of the economic
selection process.
Tuesday, November 10, 2020
It's the Zombie Apocalypse!
This year has witnessed so many strange happenings that it remains difficult to keep track of them all:
botched elections (predicted to be so to boot!), corporate donations to BLM, CHOP/CHAZ
(Seattle autonomous zone), “murder” hornets, peaceful protests that destroyed lives and property,
wildfires gone wild, and, of course, the Covid pandemic and incredible attempts to stop it via
socioeconicide.
Viewed separately, each phenomenon appears bizarre. Viewed holistically, we are clearly in the midst
of the zombie apocalypse. I don’t mean some Hollywood concoction like The Dawn of the Walking Dead
28 Weeks Later (that’s a mashup of three different franchises for the uninitiated), I mean the original,
authentic zombie, a person whose mind has been taken over by another.
Mind control sounds all sci- fi but it need not be. In fact, even fungi can do it. Scientists have discovered
new types of fungus that infect ant brains, forcing the ants to anchor themselves to leaves and other
stable places where the spores develop, kill the ant, feed on it, and then use it as a platform to spread to
other ants.
Other examples abound: A type of wasp larvae infects a spider, inducing it to build a nice cocoon in
which the larvae lives after it kills and eats the spider. Another type of wasp partially paralyzes a
cockroach, leads it by its antennae to her underground lair, then feeds the roach to its youngin’.
A type of flatworm lives in live cow liver. It places its eggs in the cow’s GI tract, where the inevitable
happens. Cow dung-eating snails then consume the flatworm eggs, which the snail turns into slime
balls that ants eat. The flatworm larvae then infect the ants’ brains, inducing the ants to sit motionless
on the tips of grass leaves where, you guessed it, a cow is likely to chomp ‘em down.
Another type of fluke produces larvae in a type of ocean snail, inducing it to attach to the gills of a type
of small fish, from whence the larvae can infect the fish’s brain, inducing it into spasms that attract
the attention of sea birds. Once in the sea bird, the flukes mature and reproduce. Their eggs land on
someone’s head or, more likely, the ocean, where ocean snails eat them and repeat the cycle anew.
Hairworms infect crickets, driving them toward lights, which in nature often means moonlight dancing on
water. The crickets then drown, allowing the hairworms to reproduce in the wet cricket corpse.
You might think that your brain is too sophisticated to be as easily controlled as that of an insect or other
creepy crawler. That’s true but the defining characteristic of zombies is that they don’t realize they are
being controlled. If they realized their plight, they could resist.
A leading candidate for causing zombie-like behavior in humans is a cervid (deer) affliction called
Chronic Wasting Disease (CWD). The CDC has worried about CWD jumping the species barrier for
years and in Fall 2019 the popular media was awash in stories of “zombie deer.” I don’t mean fringe
sites, I mean the most trusted sources of news, including the almost infallible CNN. Like the ants
awaiting certain death by cow, zombie deer easily fall victim to predators, including orange-vested
ones and ones that go vroom vroom, allowing the nasties to spread to scavengers and humans.
While few people consume the flesh of wild cervids where CWD is endemic, it could have crossed into
domestic species via captive cervids and from there into humans. Unlike Mad Cow Disease, which
resided in bovine brains (and few eat such organs any more), CWD resides in the muscle
(meat) too and is not destroyed by cooking.
Consider the symptoms of people who have died of mysterious prion (brain) ailments in recent years,
as reported by the CDC (so it must be true because they are “the” scientists!):
“One of the patients died after an illness lasting 5–6 months that was characterized by progressive
aphasia [inability to understand language], memory loss, social withdrawal, vision disturbances, and
seizure activity leading to status epilepticus and induced coma.”
“The second patient died from an illness lasting ≈16 months. The patient’s illness began with behavioral
changes, including unusual outbursts of anger and depression. Confusion, memory loss, gait
disturbances, incontinence, headaches, and photophobia also developed.”
It is possible that further mutations have rendered the ailment less deadly and more contagious,
spreading perhaps through human saliva or a common blood vector like mosquitoes, as that is the most
successful reproductive “strategy” and hence the path of most pathogens. If zombification weren’t
plausible, why would the CDC maintain a zombie preparedness page?
Before you grab your shotgun and start hunting human zombies, I should explain how manipulative
the above narrative is. It cites authorities like CNN and the CDC and combines plausible but unproven
speculation about mutation with half-truths (if you actually follow the link, it turns out that the CDC’s
zombie page is a publicity hook) with real evidence of symptoms. I did everything but call it “novel”
because that would have made it too obvious that I was deliberately trying to mirror the tactics used to gin up fear over the coronavirus.
Were I an epidemiologist (or physicist), I daresay I could publish a model with Neil Ferguson,
funded by the Gates Foundation, showing that in a year 100 billion people will be zombified unless
[insert favorite policy here: stop hunting and trapping; release all captive animals “back” into the wild;
beg Gaia’s forgiveness through mass human sacrifice, etc.].
I am not joking about publication: a 2017 peer-reviewed study predicted that zombies would wipe out
humanity in 100 days. And it was published by physicists (like Ferguson) employing a standard
epidemiological model. Like an infamous Covid model, it was rooted in a student project and
somehow published even though the students involved were smart enough to realize that the
model’s assumptions drove the outcome: un-zombified people would not change their behaviors
and could not kill the zombies. Truth is (a) stranger!
The real zombie apocalypse occurring now didn’t start with Mother Nature. Humans caused it, but not
in a conspiratorial plot. According to impeccable sources like the New York Times, the Atlantic, and
NPR, zombification is slavery is zombification. New World enslavers, they show, sought to turn their
human chattels into biological machines who (that?) did as they were bid and nothing more. While
some slaves resisted zombified enslavement, many others succumbed and became the mindless
“tools” of their masters.
Slavery is now rightly eschewed as immoral and uneconomic (if profitable for enslavers) but
governments remained interested in zombification, in the creation of passive workers and citizens
easily tricked by mindless mantras like “Your vote is your voice” and “Flatten the curve.” It’s not that
any individual or state controls the thoughts of everyone all the time, it is that people are kept vulnerable
to manipulation by means of an educational system that encourages rote memorization and focuses
students on external rewards, like grades and awards, instead of the intrinsic joy of learning.
Unfortunately, modern zombies are more difficult to detect than the drooling, brain-hungry figments
of Hollywood’s imagination. Analogous to some alcoholics, they are “high- functioning” zombies, q
uite capable of serving as a specialized cog in some bureaucratic machine or running heavy machinery.
But they are not entirely free people either and hence horrible citizens in a Republic that requires
eternal vigilance for its success. But there is a tell: try explaining Public Choice theory to suspected
zombies. If they still don’t get it after the third attempt, definitely stay at least six Congressional
districts away.