Quotulatiousness

October 22, 2023

The “Green New Deal” is great … for the well-connected wealthy elites

Filed under: Cancon, Economics, Environment, Government, Politics — Tags: , , , — Nicholas @ 05:00

Elizabeth Nickson — who lives in British Columbia, hands-down the “greenest” province in Canada — somehow isn’t a fan of the way our kakistocratic “elites” are pushing us all toward their utopian “green” world:

A few years ago when I was building my house, I attended a “green” building conference in San Francisco. Gavin Newsom and Bobby Kennedy, Jr. were giving keynote addresses, and across the conference floor were strewn hundreds of booths of builders, engineers, architects, visionaries, and commercial interests selling every manner of material, equipment, skill sets, and propaganda. Buildings, I was told, emit 59 percent of carbon emissions, and green builders would shut that down. And it would be profitable.

At the time I was neutral but dubious. I had completed a “green” subdivision and had promised puzzlingly powerful members of “the community” that I would build a “green” house. It wasn’t a requirement but it was an acceptable challenge and I knew I would be fascinated by the exercise.

I followed the LEED (Leadership in Energy and Environmental Design) platinum template, contracted the job myself. I wanted to build a healthy house, which meant as little chemical off-gassing as possible. Despite my savings, which were considerable, it still cost 40 percent more than a traditional stick-frame. The geothermal system cost $35,000 more than traditional heating and no, I have not “made back that money.” Today that cost would be north of $150,000.

We’re all in this together, right?

The only reason I am not bankrupt is that where I live is so restricted as to land use, housing prices have skyrocketed. Only the rich can afford to live here. My property with its “improvements,” which is to say my money and labor, is now worth 30 times my initial investment. This is known as old-fashioned economics, wherein you restrict supply and prices, via demand, go up.

This too is a perfect micro-illustration of the “Green Economy” or the the “Green New Deal.” It is “green” only for the wealthy or privileged by virtue of education. It is very, very “green” for those who profit from it. The people who took my extra money, other than the giant suction hose of government, were mostly those demanded by “green” theology: engineers (5), lawyers (3), surveyors (2), wildlife consultants (2), and permitting bureaucrats. Those requirements have doubled in the intervening years.

Today, life is very green for the hosts of eager young professionals at that conference who have in the intervening years insinuated themselves into every government structure, inserting siphons whereby they literally suck money out of the system in torrents of green. When I think of that conference, full of bright-eyed (expensively educated) enthusiasts, who were hell-bent on selling their ideas to the wider culture, I think: who the hell brought you up? Because this is a moral question, a profoundly ethical question. And everything you do is profoundly immoral.

The U.S. Supreme Court recently rejected an appeal that would overturn the econometrics of carbon pricing, i.e. that the Biden administration is placing too high an estimate on the future social cost of carbon emissions. Who can know the social cost of carbon emissions? But it means shuttering 450,000 shale jobs because think of the future.

October 21, 2023

Paul Krugman lives in a fantasy world where “The war on inflation is over. We won, at very little cost”

Filed under: Economics, Government, Media, Politics — Tags: , , , — Nicholas @ 03:00

Inflation continues to roar, despite calming words from government officials and legacy media pundits, as anyone who buys groceries could tell you. We long ago gave up going out for dinner, and now we’re very much living week-to-week and hoping the money lasts the whole month. Until my wife’s pension comes in late in the month, we’re utterly skint and trying to avoid spending any money at all. At Ace of Spades H.Q., Buck Throckmorton refutes the pro-government propaganda of, among others, Paul Krugman:

Monty used to use this image at Ace of Spades H.Q., and I certainly think it’s appropriate to include it here.

My household’s monthly grocery bill continues to steadily increase, despite the grocery list containing a pretty consistent basket of goods. We are spending more but not bringing home any more groceries. I am blessed that inflation has not forced us to cut back what we buy, but that hardly seems like an “expectation smashing” spending spree.

This article points out that several categories of retailers are not seeing any revenue growth at all, including clothing stores, electronics and appliance retailers, and sporting goods stores. In other words, these dry goods retailers are seeing declining unit sales as consumers are forced to redirect their decreasing purchasing power toward food, housing, and utilities.

    Sales excluding auto and gas increased 0.6%, above estimates for a 0.1% increase compiled by Bloomberg.

That 0.6% monthly increase in spending annualizes to a 7.2% increase in spending over one year. As we’ve discussed often, the government’s published inflation figures are completely fraudulent, with the Bureau of Labor Statistics reporting that as of September the annual inflation rate is just 3.7%, down from 4.0% in May 2023.

John Williams’ website (shadowstats.com) tracks inflation using the same measurements used in the Carter era. The chart below is updated through May 2023, showing the official 4% inflation as reported by the US government (red line) versus inflation if calculated the same way it was calculated in 1980 (blue line.) Actual inflation is more than 12%, which is 3 times the official bogus government figure.

Therefore, the “expectation smashing” consumer spending that the media is reporting is not even keeping up with actual inflation, which means that consumers are bringing home less in the way of retail goods, despite the increased dollar amount they are spending.

This tweet below is not a parody. Nobel Prize winning propagandist economist Paul Krugman actually stated that excluding food, energy and shelter, “The war on inflation is over. We won, at very little cost.”

Thanks, Mr. Krugman, that’s very helpful. While inflation may be out of control on food, energy, and shelter, those are unnecessary discretionary expenditures. If people will just forego extravagances such as feeding their families and putting a roof over their children’s heads, they’ll do just fine in Biden’s economy.

October 11, 2023

QotD: A rational army would run away …

Filed under: Economics, History, Military, Quotations — Tags: , , , , — Nicholas @ 01:00

It is a thousand years ago somewhere in Europe; you are one of a line of ten thousand men with spears. Coming at you are another ten thousand men with spears, on horseback. You do a very fast cost-benefit calculation.

    If all of us plant our spears and hold them steady, with luck we can break their charge; some of us will die but most of us will live. If we run, horses run faster than we do. I should stand.

Oops.

I made a mistake; I said “we”. I don’t control the other men. If everybody else stands and I run, I will not be the one of the ones who gets killed; with 10,000 men in the line, whether I run has very little effect on whether we stop their charge. If everybody else runs I had better run too, since otherwise I’m dead.

Everybody makes the same calculation. We all run, most of us die.

Welcome to the dark side of rationality.

This is one example of what economists call market failure — a situation where individual rationality does not lead to group rationality. Each person correctly calculates how it is in his interest to act and everyone is worse off as a result.

David D. Friedman, “Making Economics Fun: Part I”, David Friedman’s Substack, 2023-04-02.

September 25, 2023

QotD: The economics of American slavery

Filed under: Economics, History, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

Growing cotton … unlike sugar or rice, never required slavery. By 1870, freedmen and whites produced as much cotton as the South produced in the slave time of 1860. Cotton was not a slave crop in India or in southwest China, where it was grown in bulk anciently. And many whites in the South grew it, too, before the war and after. That slaves produced cotton does not imply that they were essential or causal in the production.

Economists have been thinking about such issues for half a century. You wouldn’t know it from the King Cottoners. They assert, for example, that a slave was “cheap labor”. Mistaken again. After all, slaves ate, and they didn’t produce until they grew up. Stanley Engerman and the late Nobel Prize winner Robert Fogel confirmed in 1974 what economic common sense would suggest: that productivity was incorporated into the market price of a slave. It’s how any capital market works. If you bought a slave, you faced the cost of alternative uses of the capital. No supernormal profits accrued from the purchase. Slave labor was not a free lunch. The wealth was not piled up.

The King Cotton school has been devastated recently in detail by two economic historians, Alan Olmstead of the University of California at Davis and Paul Rhode of the University of Michigan. They point out, for example, that the influential and leftish economist Thomas Piketty grossly exaggerated the share of slaves in U.S. wealth, yet Edward Baptist uses Piketty’s estimates to put slavery at the center of the country’s economic history. Olmstead and Rhode note, too, from their research on the cotton economy that the price of slaves increased from 1820 to 1860 not because of institutional change (more whippings) or the demand for cotton, but because of an astonishing rise in the productivity of the cotton plant, achieved by selective breeding. Ingenuity, not capital accumulation or exploitation, made cotton a little king.

Slavery was of course appalling, a plain theft of labor. The war to end it was righteous altogether — though had the South been coldly rational, the ending could have been achieved as in the British Empire in 1833 or Brazil in 1888 without 600,000 deaths. But prosperity did not depend on slavery. The United States and the United Kingdom and the rest would have become just as rich without the 250 years of unrequited toil. They have remained rich, observe, even after the peculiar institution was abolished, because their riches did not depend on its sinfulness.

Dierdre McCloskey, “Slavery Did Not Make America Rich: Ingenuity, not capital accumulation or exploitation, made cotton a little king”, Reason, 2017-07-19.

September 23, 2023

“Canada is, as a whole, a naive, spoiled country that stands a pretty good chance of getting punched in the face by reality”

Filed under: Cancon, Economics, Government, Media, Politics — Tags: , , — Nicholas @ 05:00

In The Line, Matt Gurney praises both the delivery and the content of a recent report by the Business Council of Canada urging Canadian governments to pay a lot more attention to economic security issues that seem to be almost universally neglected in favour of mediagenic gestures and battlespace prep for the next election.

But as I was reading the report, there was this nagging thought in the back of my mind. Why is the Business Council of Canada trying to impress upon the government (and the country at large) the importance of economic security? Why do we need a report from top business leaders to remind our political leadership that poor countries aren’t generally safe and peaceful ones, and that there are countries out there that would wish us harm and that we need to be on guard against? Like, shouldn’t we know that already? Because none of this stuff is revolutionary. It’s all extremely basic stuff that any mature country should just sort of intuitively grasp. Right?

And that’s when the shoulder-slumping realization lands on you like a ton of bricks. We should, but in this country, we don’t. We just don’t. Because, well ….

Uh oh.

It seems to me that a country shouldn’t need a report to impress upon key civilian leadership that economic prosperity is the cornerstone of all security, or that, on the flip side, security is a prerequisite for prosperity. Toronto is a fair bit rougher than it used to be these days — join us at our event next month! — but when I leave the house to run an errand, I’m reasonably confident I’m not going to be abducted by a band of roving pirates prowling the leafy streets of Leaside. When I head up north for the weekend, it doesn’t occur to me that there’ll be a checkpoint along the route, looking to shake me down or carry off my children into slavery. In the mornings, when I lurch out of bed with a groan that gets louder with each passing year, I expect that the light switch will indeed result in light and that the faucet in the bathroom will provide clean water. I don’t have to worry about whether the water treatment plant has been bombed or the power lines shelled.

Many of my Canadian readers may find the above absurd or, at least, a bit of hyperbole. But that’s the point. As I have written many times before, almost everything we do in this country, and almost our entire self-identity as Canadians, accepts internal security and safety from military attack as an ironclad given, just by default. That makes sense: that has been the norm for us, for a long time. It seems absurd precisely because how distant it seems from our normal.

But it isn’t the norm in any historical sense much beyond a human lifetime or two or three, even in Canada. And more to the point, as the voice-over guys in the commercials say, past performance may not be indicative of future results.

We are not owed prosperity in perpetuity. We are not guaranteed security by virtue of our niceness. These are precious things that require more than just good luck — and good luck, thank God, is something Canada still does seem to have. In addition to luck, though, we need realistic understandings of our strengths, weaknesses and the threats we face. We need political leadership that is mature and aware enough to understand the difference between political interest and national interest, and that is seized enough with these issues to devote the necessary resources to building up and preserving our security, from all reasonably foreseeable threats. That includes not just investments of money and people, but also simply intellectual bandwidth and emotional toil. We have to think, hard, about things that aren’t nice to think about, and have robust, effective institutions and a critical mass of people with the necessary combination of mindset, academic and professional training and lived experience to be effective at foreseeing, heading off and, when necessary, managing crises that threaten our safety and prosperity. We need a supportive bureaucracy that is efficient and task-focused and doesn’t get in the way of all this vital work.

Does any of this sound like Canada to you?!

Does it sound like the leader of any of our governments, or any of the people who’ll replace those leaders? Does it sound like any of our institutions except the ones specifically tasked with security and defence? You know, the ones we habitually starve so we can spend a few extra bucks and a bit more political capital on something a bit more pleasing to the average voter? Does it sound like the sort of thing smart, well-read and educated Canadians spare a single solitary moment thinking about as they go about their day to day lives?

Of course not. No one does, and our politics reflect this. These just aren’t issues of concern in Canada outside of the military, the intelligence agencies and a few fellow journalists and academics I could probably recount here in their totality by their first names.

September 8, 2023

QotD: Rents and taxes in pre-modern societies

Filed under: Economics, Europe, History, Middle East, Quotations — Tags: , , , , , , — Nicholas @ 01:00

In most ways […] we can treat rent and taxes together because their economic impacts are actually pretty similar: they force the farmer to farm more in order to supply some of his production to people who are not the farming household.

There are two major ways this can work: in kind and in coin and they have rather different implications. The oldest – and in pre-modern societies, by far the most common – form of rent/tax extraction is extraction in kind, where the farmer pays their rents and taxes with agricultural products directly. Since grain (threshed and winnowed) is a compact, relatively transportable commodity (that is, one sack of grain is as good as the next, in theory), it is ideal for these sorts of transactions, although perusing medieval manorial contacts shows a bewildering array of payments in all sorts of agricultural goods. In some cases, payment in kind might also come in the form of labor, typically called corvée labor, either on public works or even just farming on lands owned by the state.

The advantage of extraction in kind is that it is simple and the initial overhead is low. The state or large landholders can use the agricultural goods they bring in in rents and taxes to directly sustain specialists: soldiers, craftsmen, servants, and so on. Of course the problem is that this system makes the state (or the large landholder) responsible for moving, storing and cataloging all of those agricultural goods. We get some sense of how much of a burden this can be from the prominence of what seem to be records of these sorts of transactions in the surviving writing from the Bronze Age Near East (although I should note that many archaeologists working on the ancient Near Eastern economy are pushing for a somewhat larger, if not very large, space for market interactions outside of the “temple economy” model which has dominated the field for quite some time). This creates a “catch” we’ll get back to: taxation in kind is easy to set up and easier to maintain when infrastructure and administration is poor, but in the long term it involves heavier administrative burdens and makes it harder to move tax revenues over long distances.

Taxation in coin offers potentially greater efficiency, but requires more particular conditions to set up and maintain. First, of course, you have to have coinage. That is not a given! Much of the social interactions and mechanics of farming I’ve presented here stayed fairly constant (but consult your local primary sources for variations!) from the beginnings of written historical records (c. 3,400 BC in Mesopotamia; varies place to place) down to at least the second agricultural revolution (c. 1700 AD in Europe; later elsewhere) if not the industrial revolution (c. 1800 AD). But money (here meaning coinage) only appears in Anatolia in the seventh century BC (and probably independently invented in China in the fourth century BC). Prior to that, we see that big transactions, like long-distance trade in luxuries, might be done with standard weights of bullion, but that was hardly practical for a farmer to be paying their taxes in.

Coinage actually takes even longer to really influence these systems. The first place coinage gets used is where bullion was used – as exchange for big long-distance trade transactions. Indeed, coinage seemed to have started essentially as pre-measured bullion – “here is a hunk of silver, stamped by the king to affirm that it is exactly one shekel of weight”. Which is why, by the by, so many “money words” (pounds, talents, shekels, drachmae, etc.) are actually units of weight. But if you want to collect taxes in money, you need the small farmers to have money. Which means you need markets for them to sell their grain for money and then those merchants need to be able to sell that grain themselves for money, which means you need urban bread-eaters who are buying bread with money, which means those urban workers need to be paid in money. And you can only get any of these people to use money if they can exchange that money for things they want, which creates a nasty first-mover problem.

We refer to that entire process as monetization – when I talk about economies being “monetized” or “incompletely monetized” that’s what I mean: how completely has the use of money penetrated through this society. It isn’t a one-way street, either. Early and High Imperial Rome seem to have been more completely monetized than the Late Roman Western Empire or the early Middle Ages (though monetization increases rapidly in the later Middle Ages).

Extraction, paradoxically, can solve the first mover problem in monetization, by making the state the first mover. If the state insists on raising taxes in money, it forces the farmers to sell their grain for money to pay the tax-man; the state can then take that money and use it to pay soldiers (almost always the largest budget-item in an ancient or medieval state budget), who then use the money to buy the grain the farmers sold to the merchants, creating that self-sustaining feedback loop which steadily monetizes the society. For instance, Alexander the Great’s armies – who expected to be paid in coin – seem to have played a major role in monetizing many of the areas they marched through (along with breaking things and killing people; the image of Alexander the Great’s conquests in popular imagination tend to be a lot more sanitized).

Bret Devereaux, “Collections: Bread, How Did They Make It? Part IV: Markets, Merchants and the Tax Man”, A Collection of Unmitigated Pedantry, 2020-08-21.

August 30, 2023

It’s hard to believe, but the big cabinet shuffle didn’t help Trudeau’s poll numbers

Filed under: Cancon, Economics, Government, Media, Politics — Tags: , , , — Nicholas @ 04:00

Rather the opposite, as Paul Wells explains:

The good news for Team Trudeau is that sometimes new inertia pushes old inertia off the front pages. In June, the apparent decision to stall on an inquiry into foreign election interference seemed bold to the point of recklessness. Now the conventional wisdom barely notices it’s happened. Perhaps one explanation for Pierre Poilievre’s rise in the polls is that he is now complaining about things more Canadians care about.

From Abacus

Did somebody mention polls! For many more reasons than this, the polls are dire for the Liberals. A cottage industry sprang up over the weekend, consisting of Liberal sympathizers pointing out that polls have often been lousy at predicting the future: Dan Arnold and Tyler Meredith; Gerald Butts; David Herle. They all have this much of a point: polls don’t predict the future, opinions can change, campaigns matter. Neither you nor I know what the future holds.

And yet. If Brian Mulroney managed to overcome John Turner’s polling lead in 1986-88, it’s partly because Mulroney’s government was still new, Mulroney was much less of a known quantity than Turner, and Mulroney was able to turn Turner’s chosen issue, free trade, into a huge advantage. If Trudeau has won three times while his share of the popular vote declines, it’s partly because he was less of a known quantity in earlier elections. There’s a reason why the last leader to win four consecutive elections was Wilfrid Laurier. It’s hard.

What Trudeau used to have was agility. He was a critic of the status quo. Stephen Harper needed to have jets in the air over Iraq; Trudeau didn’t. Harper had a low cap on the number of Syrian refugees he could accept; Trudeau didn’t. Harper and Mulcair were obsessed with balanced budgets. Trudeau was less of a fuddy-duddy. He’d change everything, from the electoral system on up.

This sort of stuff is simply easier for the young leader of a third party than for a prime minister nearing a decade in office. But as their manoeuvring room and novelty wear off, incumbent leaders can usually offer compensating virtues: their experience and wisdom. Sure, he’s less exciting than before, but now he’s a surer hand.

Unfortunately, for that to work you need to be a surer hand.

August 29, 2023

QotD: Private versus public decision-making

Filed under: Economics, Government, Liberty, Quotations — Tags: , — Nicholas @ 01:00

Those who wish to turn ever-more decision-making power over to government – and, hence, to take such power from individuals operating in their private spheres (including, but not limited to, private markets) – believe this bizarre notion: when Jones has the power to spend Smith’s money and to order Smith about, Smith’s welfare is improved compared to when the power to spend Smith’s money and to determine how Smith will act is reserved to Smith, with Jones’s authority confined to his – Jones’s – own business.

In private-property markets each individual has the power to say “no”, and when each individual says “yes”, that individual spends only his or her own money. Also, in private-property markets each individual’s choices are significant: if Smith chooses to buy a new car, Smith gets the new car that he chooses; if Smith chooses not to buy a new car, Smith gets no new car.

These basic features of private-property markets, along with a handful of other features that are embodied in the common law, ensure not that markets operate “perfectly”, but that the market process is always in action to generally improve the operation and outcomes of markets.

The political marketplace is nearly the exact opposite. In the political marketplace, Jones spends Smith’s money, and Smith has no real power to say no. Nor [are] Smith’s choices ever genuinely significant (unless, of course, Smith becomes one of the relatively small percentage of people who succeed in grabbing hold of political power).

If a malevolent all-powerful being were intent on designing a market that is destined to abuse the vast bulk of people, that devil could do no better than to impose on his victims majoritarian politics largely unconstrained by constitutional rules. This devil – being, of course, ill-mannered, and evilly-intentioned – would seek to destroy private-property markets.

Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2019-07-31.

August 28, 2023

Why Britain Advanced Before Other European Nations | Thomas Sowell

Filed under: Britain, Economics, History, Law, Technology — Tags: , , , — Nicholas @ 02:00

Thomas SowellTV
Published 17 Dec 2021
(more…)

August 27, 2023

When the techno-utopians proclaimed the end of the book

Filed under: Books, Business, Economics, Media, Technology — Tags: , , — Nicholas @ 03:00

In the latest SHuSH newsletter, Ken Whyte harks back to a time when brash young tech evangelists were lining up to bury the ancient codex because everything would be online, accessible, indexed, and (presumably) free to access. That … didn’t happen the way they forsaw:

By the time I picked up Is This a Book?, a slim new volume from Angus Phillips and Miha Kova?, I’d forgotten the giddy digital evangelism of the mid-Aughts.

In 2006, for instance, a New York Times piece by Kevin Kelly, the self-styled “senior maverick” at Wired, proclaimed the end of the book.

It was already happening, Kelly wrote. Corporations and libraries around the world were scanning millions of books. Some operations were using robotics that could digitize 1,000 pages an hour, others assembly lines of poorly paid Chinese labourers. When they finished their work, all the books from all the libraries and archives in the world would be compressed onto a 50 petabyte hard disk which, said Kelly, would be as big as a house. But within a few years, it would fit in your iPod (the iPhone was still a year away; the iPad three years).

“When that happens,” wrote Kelly, “the library of all libraries will ride in your purse or wallet — if it doesn’t plug directly into your brain with thin white cords.”

But that wasn’t what really excited Kelly. “The chief revolution birthed by scanning books”, he ventured, would be the creation of a universal library in which all books would be merged into “one very, very, very large single text”, “the world’s only book”, “the universal library.”

The One Big Text.

In the One Big Text, every word from every book ever written would be “cross-linked, clustered, cited, extracted, indexed, analyzed, annotated, remixed, reassembled and woven deeper into the culture than ever before”.

“Once text is digital”, Kelly continued, “books seep out of their bindings and weave themselves together. The collective intelligence of a library allows us to see things we can’t see in a single, isolated book.”

Readers, liberated from their single isolated books, would sit in front of their virtual fireplaces following threads in the One Big Text, pulling out snippets to be remixed and reordered and stored, ultimately, on virtual bookshelves.

The universal book would be a great step forward, insisted Kelly, because it would bring to bear not only the books available in bookstores today but all the forgotten books of the past, no matter how esoteric. It would deepen our knowledge, our grasp of history, and cultivate a new sense of authority because the One Big Text would indisputably be the sum total of all we know as a species. “The white spaces of our collective ignorance are highlighted, while the golden peaks of our knowledge are drawn with completeness. This degree of authority is only rarely achieved in scholarship today, but it will become routine.”

And it was going to happen in a blink, wrote Kelly, if the copyright clowns would get out of the way and let the future unfold. He recognized that his vision would face opposition from authors and publishers and other friends of the book. He saw the clash as East Coast (literary) v. West Coast (tech), and mistook it for a dispute over business models. To his mind, authors and publishers were eager to protect their livelihoods, which depended on selling one copyright-protected physical book at a time, and too self-interested to realize that digital technology had rendered their business models obsolete. Silicon Valley, he said, had made copyright a dead letter. Knowledge would be free and plentiful—nothing was going to stop its indiscriminate distribution. Any efforts to do so would be “rejected by consumers and ignored by pirates”. Books, music, video — all of it would be free.

Kelly wasn’t altogether wrong. He’d just taken a narrow view of the book. He was seeing it as a container of information, an individual reference work packed with data, facts, and useful knowledge that needed to be agglomerated in his grander project. That has largely happened with books designed simply to convey information — manuals, guides, dissertations, and actual reference books. You can’t buy a good printed encyclopedia today and most scientific papers are now in databases rather than between covers.

What Kelly missed was that most people see the book as more than a container of information. They read for many reasons besides the accumulation of knowledge. They read for style and story. They read to feel, to connect, to stimulate their imaginations, to escape. They appreciate the isolated book as an immersive journey in the company of a compelling human voice.

QotD: Getting food to market in pre-modern societies

Filed under: Economics, Europe, Food, History, Quotations — Tags: , , , , — Nicholas @ 01:00

The most basic kind of transport is often small-scale overland transport, either to and from the nearest city, or in small (compared to what we’ll discuss in a moment) caravans moving up and down a region […]. The Talmud, for instance, seems to suggest that much of the overland grain trade in Palestine under the Romans was performed with itinerant donkey-drivers in small caravans – and I do mean small. Egyptian tax evidence suggests that most caravans were small; Erdkamp notes that 90% of donkey caravans and 75% of camel caravans consisted of three or less animals. These sorts of small caravans don’t usually specialize in any particular good but instead function like land-based cabotage traders, buying whatever seems likely to turn a profit at each stop and stopping in each town and market along the way. Some farmers might even do this during the off season; in Spain, peasants often worked as muleteers during the slow farming season, moving rents and taxes into town or to points of export for their wealthy landlords and neighbors.

Truly long-distance bulk grain transport overland wasn’t viable for reasons we’ve actually already discussed. There is simply nothing available in the pre-modern period to carry the grain overland that doesn’t also eat it. While moving grain short distances (especially to simply fill capacity while the main profit is in other, lower-bulk, higher value goods) can be efficient enough, at long distance, all of the grain ends up eaten by the animals or people moving it.

The seaborne version of this sort of itinerant, short-distance trade is called cabotage. Now today cabotage has a particular, technical legal meaning, but when we use this word in the past, it refers not to the legal status of a ship but a style of shipping using small boats to move mixed cargo up and down the coast. In essence, cabotage works much the same as the small caravans – the merchant buys in each port whatever looks likely to turn a profit and sells whatever [is] in demand. By keeping a mixed cargo of many different sorts of things, he protects against risk – he’s always likely to be able to sell something in his boat for a profit. Such traders generally work on very short distances, often connecting smaller ports which simply cannot accommodate larger, deeper-draft long-distance traders. Such cabotage trading was the background “hum” of commerce on many pre-modern coastlines and might serve to move grain up or down the coast, although not very much of it. Remember that grain is a bulk commodity, and cabotage traders, by definition, are moving small volumes.

But when it comes to moving large volumes, the sea changes everything. The fundamental problem with transporting food on land is that the energy to transport the food must come from food, either processed into muscle power by porters or animals. But at sea, that energy can come from the wind. So while the crew of a ship eats the food, the ship can be scaled up without scaling up the food requirements of the crew or the crew itself. At the same time, sea-transit is much faster than land transit and that speed is obtained from the wind without further inputs of food. It is hard to overstate how tremendous a change in context this is. Using the figures from the Price Edict of Diocletian, we tend to estimate that river transport was five times cheaper than land transport, and sea-transport was twenty times cheaper than land transport. So while the transport of bulk goods like grain on land was limited to fairly small amounts moving over short distances – say from the farm to the nearest town or port – grain could be moved long distances en masse by sea.

Now the scale and character of long-distance transport is heavily impacted by the political realities of the local waterways. If the seas are politically divided, or full of pirates, it is going to be hard to operate big, slow vulnerable grain-freighters and still make a profit after some of them get seized, pirated or sunk. But when we have periods of political unity and relatively safe seas, we see that this sort of transport can reach quite impressive scale. For instance the port regulations of late Hellenistic and Roman Thasos – itself a decent sized, but by no means massive port – divided its harbor into two areas, one for ships carrying 80-130 tons of cargo and one for ships 130+ tons (those regulations are SEG XVII 417). A brief bit of math indicates that the distribution of free grain in the city of Rome – likely less than a third of the total grain demands of the city – required the import, by sea of some 630 tons of grain per day through the sailing season. The scale of grain shipment in the back half of the Middle Ages (post-1000 or so) was also on a vast scale, with trade-oriented Italian cities exploding in population as they imported grain (Genoa being particularly well known for this, but by no means alone in it); with that came the reemergence of truly large grain-freighters.

Bret Devereaux, “Collections: Bread, How Did They Make It? Part IV: Markets, Merchants and the Tax Man”, A Collection of Unmitigated Pedantry, 2020-08-21.

August 26, 2023

QotD: The psychological value of “making”

Filed under: Economics, Health, Quotations — Tags: , , , , — Nicholas @ 01:00

The Domestic Revolution is a fascinating tour of the ways relatively minor changes snowball, changing the way people interact with the material world and with one another, but it’s also a tremendous pleasure for its lucid, practical explanations of how these things actually work. Goodman is deeply familiar with her tools and materials in a way that’s quite unusual today. Of course anyone who really makes things will have this familiarity — ask a software engineer about programming languages or his favourite text editor — but in most walks of life actually making things has become increasingly optional. Of the objects I interact with on a daily basis, the only ones I can really be said to have made (my kids don’t count) are the things I cook and the chairs I refinished and upholstered.1 Beyond that there’s the garden I planted with seeds and perennials I bought at a nursery, the furniture I assembled out of pieces some nice Swedish man machined for me, and the various bits of plumbing I’ve swapped out, but none of that is really “making” so much as it is “assembling things other people have made”. It’s mostly the productive equivalent of last mile delivery — nothing to sneeze at, but a far cry from the sort of deep involvement with the material world that was common only a few centuries ago.

This makes perfect sense, of course: I don’t have a deep and intimate knowledge of these things because I don’t need one. Still, though, it’s important to have a certain very basic familiarity with how the things around you work — enough, say, to know what to Google when something breaks and how to put the results into practice, or to turn fifteen feet of arching blackberry cane into an actual bush — because it gives you power over your world. The particular powers don’t really matter (it’s easy enough to pay someone else to fix your plumbing or grow your berries); the key is the patterns of thought they engender. There are, for example, apparently some enormous number of people who don’t change the batteries in their beeping smoke detectors. I have no idea whether it’s drug-induced apathy, ignorance of how things work (in the same way that drilling a hole in your wall to hang something seems scary if you don’t know that your wall is a lie just painted drywall in front of empty space between the studs), or simply a pathological lack of personal agency, but it’s hard to believe you can change anything dissatisfactory about your life if you can’t change a 9V battery.

Making and doing things, even when you don’t have to, is practice in believing that you can change your own world. It’s weightlifting for agency. You can outsource the making of your physical world, but social worlds — the arrangement of your family life, your personal relationships, the organizations and institutions you’re involved in — must be created by the participants themselves. A good society would be one where the default “builder-grade” scripts lead to human flourishing, but unfortunately that isn’t ours, so you have to be able to decide on your own changes. Start practicing now: find one little thing about your physical environment that annoys you and fix it. Put the new toilet paper roll actually on the holder. Replace the burned-out lightbulb. Hang the artwork that’s listing drunkenly against the wall. Pull some weeds. And then, once you’ve warmed up a little bit, go and make something new.

Jane Psmith, “REVIEW: The Domestic Revolution by Ruth Goodman”, Mr. and Mrs. Psmith’s Bookshelf, 2023-05-22.

    1. They’re oak dining chairs, probably (judging by the construction) about a hundred years old, and they looked a lot better on Facebook Marketplace than in real life. When I showed up to buy them, the sellers turned out to be an elderly couple moving to assisted living in six hours; they admired my baby and showed me pictures of their grandchildren and explained they had inherited the chairs from the wife’s mother, who in turn had gotten them from her friend’s mother, and by this point I couldn’t really say “yeah I can tell” and leave, so home they came. When I took apart the seats to recover them I discovered the original horsehair padding and some extremely questionable techniques applied over the years, but anyway now my chairs have eight-way hand-tied springs and I have some new calluses.

August 16, 2023

Facts about Africa’s Geography never taught in schools | Thomas Sowell

Filed under: Africa, Books, Economics, Environment, History — Tags: , , — Nicholas @ 02:00

Thomas SowellTV
Published 20 Nov 2021
(more…)

August 14, 2023

The WEIRDos – Western, Educated, Industrialized, Rich and Democratic societies

Filed under: Books, Economics, History — Tags: , , — Nicholas @ 03:00

Another anonymous book review at Scott Alexander’s Astral Codex Ten considers The Weirdest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous by Joseph Henrich:

Coming as he does from the scientific side of the aisle, Henrich isn’t just going to tell a story. He has a hypothesis about an empirical puzzle. The puzzle is the most important question, the big one, the one that once you think about it’s hard to think about anything else, the economists’ Holy Grail since Adam Smith: why are some countries rich and others poor?

His hypothesis comes from cross-cultural psychology. The West got rich because Westerners are different. People from Western, Educated, Industrialized, Rich and Democratic societies are WEIRD – the acronym comes from a previous article of his. In particular, compared to everyone else in the world and in history, modern Westerners:

  • Are individualist, not collectivist or conformist
  • Feel more guilt and less shame
  • Explain people’s actions by their innate dispositions, not their social role
  • Reason analytically not holistically
  • Follow more universal norms and less relationship-specific norms
  • Are more patient
  • Trust strangers more and are more honest.

This psychology might make societies richer, for fairly well-known and plausible reasons. The Weirdest People in the World (henceforth just WEIRD) sets out a causal chain from cultural change to psychological change to modern economic growth. The start of that chain is surprising: an obscure set of rules pushed by the medieval Catholic church, which banned marriage between cousins. The most important argument of the book is that these rules created WEIRD psychology.

How it worked: these marriage regulations served to dismantle intensive kin networks, which are the social cement of society almost everywhere else in the world. For most people in history, family hasn’t just been the place where children grow up and couples spend time together. Family has been the basic human group, and there have been extensive and precise rules dictating who counts as family (or clan) and how each person should act with respect to different relatives. The Church’s regulations, the Marriage and Family Programme (MFP), aimed to replace intensive kinship, and over many centuries it was more or less successful in doing that. We’ll come back shortly to why it wanted to.

So, the causal chain looks like this:1

WEIRD‘s key evidence is the link between the places where the Church promulgated the MFP and a set of psychological and social outcomes: the level of cousin marriage, the psychology of people living in those places today, social capital and economic growth. This is the scientific story of European history, and Henrich’s answer to the most important question in the world.

These maps from one of the scientific articles behind WEIRD show the basic causal claim: the medieval church reduced the intensity of kinship institutions.

He tells it with an extraordinary mastery of a very wide range of sources from anthropology, psychology, behavioural economics, economic history, and historical narrative. This book is for everyone, but the connoisseur will enjoy the bibliography: if you think it’s important and relevant, it’s probably in there, and there was also plenty of work which I did not know, and now feel I should. It takes a very smart person to keep this many balls in the air. Being at Harvard probably doesn’t hurt either – that’s the “collective brain” of the human network, which makes an appearance later on in the book.

So this book really sets down a marker: the anthropologists are returning from the Amazon, the Sudan and Polynesia, and coming for Western history and economics. It will be interesting to see how those target disciplines react.

Is it true?

Economists and historians think about Western history very differently.

Historians love irony and contingency. They enjoy byways. Triumphalist, linear narratives of progress are distrusted as “Whig history”. Growth economists, by contrast, are all about the linear bigness. They have a relentless focus on the one question of how the West got rich, and if you call that triumphalist, they will take out a chart of South Sudanese child mortality and laugh at you.

Both historians and historical economists — a more appropriate name than “economic historians” nowadays — are interested in causality. But economists have a crunchier, more “scientific” standard for what counts as proof of causality. You’ve got to have a treatment and a control group, and by default if you claim there are no confounds, they won’t believe you. You need you some plausible exogeneity. A random river where Napoleon’s armies stopped. The distance from Wittemberg where Luther nailed up his theses. And then, how does that affect something that matters today (if it doesn’t, then who cares?) Of course, the longer ago the exogenous treatment, the more impressive the result.

You can see the incentives that these disciplinary demands might set up, and that might worry you. At worst, you might get a kind of “underground river” concept of history, where

  1. X happened long ago
  2. [underpants gnomes whispering]
  3. Y is correlated with X today

Indeed this does seem to skip all the interesting, contingent bits:

On the other hand, if you want to explain an all-important outcome like the take-off into modern economic growth, then you can’t just mumble “one damn thing after another” or “irony and contingency”. That a hundred things randomly conspired to make the West Educated, Industrialized, Rich and Democratic is not a satisfying story. Why would the die rolls keep favouring this one place? (And you can’t invoke the law of large numbers. There are only five continents in the world, and modern economic growth did not have to happen anywhere at all.)

    1. It’s a bit more complex than that. In particular, the end of intensive kinship directly helps economic growth because it clears the way for voluntary associations to thrive. But the psychology angle is what’s really unique to WEIRD – in particular, Francis Fukuyama has previously argued that kin institutions might be a problem for higher-level cooperation.

August 11, 2023

QotD: Subsistence versus market-oriented farming in pre-modern societies

Filed under: Economics, Europe, Food, History, Quotations — Tags: , , , , — Nicholas @ 01:00

Large landholders interacted with the larger number of small farmers (who make up the vast majority of the population, rural or otherwise) by looking to trade access to their capital for the small farmers’ labor. Rather than being structured by market transactions (read: wage labor), this exchange was more commonly shaped by cultural and political forces into a grossly unequal exchange whereby the small farmers gathered around the large estate were essentially the large landholder’s to exploit. Nevertheless, that exploitation and even just the existence of the large landholder served to reorient production away from subsistence and towards surplus, through several different mechanisms.

Remember: in most pre-modern societies, the small farmers are largely self-sufficient. They don’t need very many of the products of the big cities and so – at least initially – the market is a poor mechanism to induce them to produce more. There simply aren’t many things at the market worth the hours of labor necessary to get them – not no things, but just not very many (I do want to stress that; the self-sufficiency of subsistence farmers is often overstated in older scholarship; Erdkamp (2005) is a valuable corrective here). Consequently, doing anything that isn’t farming means somehow forcing subsistence farmers to work more and harder in order to generate the surplus to provide for those people who do the activities which in turn the subsistence farmers might benefit from not at all. But of course we are most often interested in exactly all of those tasks which are not farming (they include, among other things, literacy and the writing of history, along with functionally all of the events that history will commemorate until quite recently) and so the mechanisms by which that surplus is generated matter a great deal.

First, the large landholder’s farm itself existed to support the landholder’s lifestyle rather than his actual subsistence, which meant its production had to be directed towards what we might broadly call “markets” (very broadly understood). Now many ancient and even medieval agricultural writers will extol the value of a big farm that is still self-supporting, with enough basic cereal crops to subsist the labor force, enough grazing area for animals to provide manure and then the rest of the land turned over to intensive cash-cropping. But this was as much for limiting expenses to maximize profits (a sort of mercantilistic maximum-exports/minimum-imports style of thinking) as it was for developing self-sufficiency in a crisis. Note that we (particularly in the United States) tend to think of cash crops as being things other than food – poppies, cotton, tobacco especially. But in many cases, wheat might be the cash crop for a region, especially for societies with lots of urbanism; good wheat land could bring in solid returns […]. The “cash” crop might be grapes (for wine) or olives (mostly for olive oil) or any number of other necessities, depending on what the local conditions best supported (and in some cases, it could be a cash herd too, particularly in areas well-suited to wool production, like parts of medieval Britain).

Second, the exploitation by the large landholder forces the smaller farmers around him to make more intensive use of their labor. Because they are almost always in debt to the fellow with the big farm and because they need to do labor to get access to plow teams, manure, tools, or mills and because the large landholder’s land-ready-for-sharecropping is right there, the large landholder both creates the conditions that impel small farmers to work more land (and thus work more days) than their own small farms do and also creates the conditions where they can farm more intensively (both their own lands and the big farm’s lands, via plow teams, manure, etc.). Of course the large landholder then generally immediately extracts that extra production for his own purposes. […] all of the folks who aren’t small farmers looking to try to get small farmers to work harder than is in their interest in order to generate surplus. In this case, all of that activity funnels back into sustaining the large landholder’s lifestyle (which often takes place in town rather than in the countryside), which in turn supports all sorts of artisans, domestics, crafters and so on.

And so the large landholder needs the small subsistence farmers to provide flexible labor and the small subsistence farmers (to a lesser but still quite real degree) need the large landholder to provide flexibility in capital and work availability and the interaction of both of these groups serves to direct more surplus into activities which are not farming.

Bret Devereaux, “Collections: Bread, How Did They Make It? Part II: Big Farms”, A Collection of Unmitigated Pedantry, 2020-07-31.

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