Sunday, April 13, 2014

The Wealth of Nations, Book 4

Before we get into Book 4 of "Wealth", a correction. My online course stated that "The Wealth of Nations" was published in 1776, not 1790 as I stated. The Wikipedia article on Adam Smith concurs with the 1776 date. But it looks like he continued to revise the book up until his death in 1790. There are references to a 1780 trade agreement, and to the American Revolution having already taken place ("Before the revolt of our North American colonies").

1776 was a banner year:

  1. The signing of the Declaration of Independence started the American Revolution.
  2. The invention of the steam engine by James Watt started the Industrial Revolution.
  3. "Wealth of Nations" was published, which is generally considered to mark the start of modern economics.

Book 4 is titled "Of Systems Of Political Economy". It is the longest book. It basically discusses trade between nations and the government's involvement in such trade via duties, tariffs, and bounties (basically inverse tariffs). He calls it The Mercantile System, but never really defines it. To me, his main points were:

  • Government attempting to protect or incubate industries by penalizing imports or exports via tariffs or outright bans winds up being a zero sum game. Favoring one industry segment penalizes other industry segments or consumers.
  • Balance of trade is really not worth worrying about.
  • Free trade, like free markets, will make everything work best in the end.
  • "Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system."
There are more examples of how weird it makes things to have your currency based on precious metals. Because not only can the metal be used for coins, it can also be used for flatware!
The gold and silver which can properly be considered as accumulated, or stored up in any country, may be distinguished into three parts; first, the circulating money; secondly, the plate of private families; and, last of all, the money which may have been collected by many years parsimony, and laid up in the treasury of the prince.
In chapter 2, "Of Restraints Upon Importation From Foreign Countries Of Such Goods As Can Be Produced At Home", we meet the only actual reference in "Wealth" to the famous "invisible hand". It's import is actually somewhat limited, being used only to explain why merchants better promote the public interest by supporting domestic rather than foreign industry.
He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
Here's a passage from chapter 5 which is more what people understand "the invisible hand" to mean:
The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions, with which the folly of human laws too often encumbers its operations: though the effect of those obstructions is always, more or less, either to encroach upon its freedom, or to diminish its security.
Here's an example of his favoring free trade:
If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.
And another:
By diminishing the number of sellers, therefore, we necessarily diminish that of buyers, and are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there was a more perfect freedom of trade.
And another:
Every derangement of the natural distribution of stock is necessarily hurtful to the society in which it takes place;
And another:
The effect of bounties, like that of all the other expedients of the mercantile system, can only be to force the trade of a country into a channel much less advantageous than that in which it would naturally run of its own accord.
Interesting, also on bounties (government credit for producing certain goods) -- that they can lead to bubbles, similar to those we have seen in the last few decades. The housing bubble would have been less likely without the tax deduction on mortgages -- a government "bounty" paid to the consumer. I can't think of a similar incentive that led to the dot-com bubble of the late '90s.
The usual effect of such bounties is, to encourage rash undertakers to adventure in a business which they do not understand; and what they lose by their own negligence and ignorance, more than compensates all that they can gain by the utmost liberality of government.
He does make an exception for strategic materials required to maintain the nation's military equipment.

Smith is definitely not a fan of taxes. At the time of "Wealth", Holland was the richest country in the western world.

Such taxes, when they have grown up to a certain height, are a curse equal to the barrenness of the earth, and the inclemency of the heavens, and yet it is in the richest and most industrious countries that they have been most generally imposed. No other countries could support so great a disorder. As the strongest bodies only can live and enjoy health under an unwholesome regimen, so the nations only, that in every sort of industry have the greatest natural and acquired advantages, can subsist and prosper under such taxes. Holland is the country in Europe in which they abound most, and which, from peculiar circumstances, continues to prosper, not by means of them, as has been most absurdly supposed, but in spite of them.
Here's a surprisingly democratic result derived from Libertarian principles: that all people should be free to follow whatever trade they desire. I bet that he would not be opposed to anyone who felt they could be, say, a surgeon, putting a sign up and having at it -- buyer beware! Like when our own Random Paul created his own certifying board -- solid Libertarian principle in action.
Soldiers and seamen, indeed, when discharged from the king’s service, are at liberty to exercise any trade within any town or place of Great Britain or Ireland. Let the same natural liberty of exercising what species of industry they please, be restored to all his Majesty’s subjects, in the same manner as to soldiers and seamen; that is, break down the exclusive privileges of corporations, and repeal the statute of apprenticeship, both which are really encroachments upon natural Liberty, and add to those the repeal of the law of settlements, so that a poor workman, when thrown out of employment, either in one trade or in one place, may seek for it in another trade or in another place, without the fear either of a prosecution or of a removal; and neither the public nor the individuals will suffer much more from the occasional disbanding some particular classes of manufacturers, than from that of the soldiers.
It is interesting that the difficulties caused by currencies being based upon precious metals, such that coins can be clipped or become worn, led to the establishment of the first commercial bank, in Amsterdam in 1609.

Smith really does seem to be more Libertarian than what we would now call pro-business. He seems pretty disgusted by merchants and industries who succeed in getting favorable trade treatment from the government.

Commerce, which ought naturally to be, among nations as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. The capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe, than the impertinent jealousy of merchants and manufacturers. The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy: but the mean rapacity, the monopolizing spirit, of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind, though it cannot, perhaps, be corrected, may very easily be prevented from disturbing the tranquillity of anybody but themselves.
His attitude on having wealthy neighboring countries is interesting:
The wealth of neighbouring nations, however, though dangerous in war and politics, is certainly advantageous in trade. ... Private people, who want to make a fortune, never think of retiring to the remote and poor provinces of the country, but resort either to the capital, or to some of the great commercial towns. They know, that where little wealth circulates, there is little to be got; but that where a great deal is in motion, some share of it may fall to them. The same maxim which would in this manner direct the common sense of one, or ten, or twenty individuals, should regulate the judgment of one, or ten, or twenty millions, and should make a whole nation regard the riches of its neighbours, as a probable cause and occasion for itself to acquire riches.
Here is a succinct statement on his "don't worry about balance of trade" thinking. Nice too that he jibes at his fellow economists -- some things never change.
There is no commercial country in Europe, of which the approaching ruin has not frequently been foretold by the pretended doctors of this system, from all unfavourably balance of trade. After all the anxiety, however, which they have excited about this, after all the vain attempts of almost all trading nations to turn that balance in their own favour, and against their neighbours, it does not appear that any one nation in Europe has been, in any respect, impoverished by this cause. Every town and country, on the contrary, in proportion as they have opened their ports to all nations, instead of being ruined by this free trade, as the principles of the commercial system would lead us to expect, have been enriched by it.
But in contrast he is absolutely not a fan of deficit spending -- I guess we have to wait for Keynes to realize that borrowing money during slumps when it's cheap and paying it back during booms when revenues are up can work wonders.

Chapter 7 is titled "Of Colonies" and deals with all things colonial. Definitely relevant to an earlier time. It starts with a discussion of Greek and Roman colonies, about which I had totally forgotten. He appears to have been a fan of the American colonies.

The colony of a civilized nation which takes possession either of a waste country, or of one so thinly inhabited that the natives easily give place to the new settlers, advances more rapidly to wealth and greatness than any other human society.
One important difference in the colonies is that primogeniture is no longer universal. There is so much free land that this is not a problem. But Britain was practicing the standard colonial model, with the colonies restricted to exporting raw materials and importing manufactured products.
The more advanced or more refined manufactures, even of the colony produce, the merchants and manufacturers of Great Britain chuse to reserve to themselves, and have prevailed upon the legislature to prevent their establishment in the colonies, sometimes by high duties, and sometimes by absolute prohibitions.
And, you gotta give credit to Smith, he calls this out:
To prohibit a great people, however, from making all that they can of every part of their own produce, or from employing their stock and industry in the way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind.
There is a discussion of the restrictive trade practices which the European countries adapted to maximize their profits on trade with the Americas and the Far East. And again, Smith is against all such practices.
But whatever raises, in any country, the ordinary rate of profit higher than it otherwise would be, necessarily subjects that country both to an absolute, and to a relative disadvantage in every branch of trade of which she has not the monopoly.
Surprisingly, globalization is already an issue in the late 18th century -- with business, just as now, not wanting to share the wealth.
Our merchants frequently complain of the high wages of British labour, as the cause of their manufactures being undersold in foreign markets; but they are silent about the high profits of stock. They complain of the extravagant gain of other people; but they say nothing of their own. The high profits of British stock, however, may contribute towards raising the price of British manufactures, in many cases, as much, and in some perhaps more, than the high wages of British labour.
More Smith goodness! Here he lauds full employment.
The most advantageous employment of any capital to the country to which it belongs, is that which maintains there the greatest quantity of productive labour, and increases the most the annual produce of the land and labour of that country.
There is some commentary on the American Revolution as seen from the British side. There was great consternation at the loss of their trade monopolies. But, following his Libertarian instincts, Smith actually proposed that Britain get rid of all its colonies, and the expense of protecting them, when the only ones benefitting from them are British merchants and manufacturers.
A great empire has been established for the sole purpose of raising up a nation of customers, who should be obliged to buy, from the shops of our different producers, all the goods with which these could supply them. For the sake of that little enhancement of price which this monopoly might afford our producers, the home consumers have been burdened with the whole expense of maintaining and defending that empire. For this purpose, and for this purpose only, in the two last wars, more than two hundred millions have been spent, and a new debt of more than a hundred and seventy millions has been contracted, over and above all that had been expended for the same purpose in former wars. The interest of this debt alone is not only greater than the whole extraordinary profit which, it never could be pretended, was made by the monopoly of the colony trade, but than the whole value of that trade, or than the whole value of the goods which, at an average, have been annually exported to the colonies. It cannot be very difficult to determine who have been the contrivers of this whole mercantile system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers, whose interest has been so carefully attended to; and among this latter class, our merchants and manufacturers have been by far the principal architects. In the mercantile regulations which have been taken notice of in this chapter, the interest of our manufacturers has been most peculiarly attended to; and the interest, not so much of the consumers, as that of some other sets of producers, has been sacrificed to it.
And then maybe after the colonies are turned loose ...
By thus parting good friends, the natural affection of the colonies to the mother country, which, perhaps, our late dissensions have well nigh extinguished, would quickly revive. It might dispose them not only to respect, for whole centuries together, that treaty of commerce which they had concluded with us at parting, but to favour us in war as well as in trade, and instead of turbulent and factious subjects, to become our most faithful, affectionate, and generous allies; and the same sort of parental affection on the one side, and filial respect on the other, might revive between Great Britain and her colonies, which used to subsist between those of ancient Greece and the mother city from which they descended.
Ha ha, I guess that it didn't turn out that way for their American colonies. But Britain is the greatest ally of the US nonetheless. I see this more as the empire of the 19th century cozying up to the empire of the 20th century more than as "parental affection" and "filial respect".

I'm guessing Smith would have been aghast at the British Empire of the 19th century.

He also proposed that representatives from the colonies be given seats in the British parliament, in an attempt to buy off the leaders of the colonies.

Unless this or some other method is fallen upon, and there seems to be none more obvious than this, of preserving the importance and of gratifying the ambition of the leading men of America, it is not very probable that they will ever voluntarily submit to us ...
Smith is eerily prescient on the future of the American colonies. He really seems to have been a fan.
From shopkeepers, trades men, and attorneys, they are become statesmen and legislators, and are employed in contriving a new form of government for an extensive empire, which, they flatter themselves, will become, and which, indeed, seems very likely to become, one of the greatest and most formidable that ever was in the world.
Smith next goes into excruciating detail on many of the market goods of his time. I thought this one was kind of funny, about efforts of the English wool industry to get the government to give them special treatment.
This doctrine, like most other doctrines which are confidently asserted by any considerable number of people, was, and still continues to be, most implicitly believed by a much greater number: by almost all those who are either unacquainted with the woollen trade, or who have not made particular inquiries. It is, however, so perfectly false, that English wool is in any respect necessary for the making of fine cloth, that it is altogether unfit for it. Fine cloth is made altogether of Spanish wool. English wool, cannot be even so mixed with Spanish wool, as to enter into the composition without spoiling and degrading, in some degree, the fabric of the cloth.
Ha ha, his reference to "any considerable number of people" reminds me of Paul Krugman's Very Serious People (VSP).

Here is Smith recommending that if the game is zero-sum, then it shouldn't be played.

To hurt, in any degree, the interest of any one order of citizens, for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment which the sovereign owes to all the different orders of his subjects.
Another principle, which I guess can be regarded as Libertarian, is that when the government makes things too restrictive, the market will find a way around the government. Hello, war on drugs.
Their avidity, however, upon this, as well as upon many other occasions, disappointed itself of its object. This enormous duty presented such a temptation to smuggling, that great quantities of this commodity were clandestinely exported, probably to all the manufacturing countries of Europe;
Wow, there are just so many issues that are still with us today, in different form. Here's 18th century Intellectual Property (IP) law. And notice, the rights of the individual are completely subjugated to those of the merchant or manufacturer.
When such heavy penalties were imposed upon the exportation of the dead instruments of trade, it could not well be expected that the living instrument, the artificer, should be allowed to go free. Accordingly, by the 5th Geo. I. chap. 27, the person who shall be convicted of enticing any artificer, of or in any of the manufactures of Great Britain, to go into any foreign parts, in order to practise or teach his trade, is liable, for the first offence, to be fined in any sum not exceeding one hundred pounds, and to three months imprisonment, and until the fine shall be paid; and for the second offence, to be fined in any sum, at the discretion of the court, and to imprisonment for twelve months, and until the fine shall be paid. By the 23d Geo. II. chap. 13, this penalty is increased, for the first offence, to five hundred pounds for every artificer so enticed, and to twelve months imprisonment, and until the fine shall be paid; and for the second offence, to one thousand pounds, and to two years imprisonment, and until the fine shall be paid.
If any artificer has gone beyond the seas, and is exercising or teaching his trade in any foreign country, upon warning being given to him by any of his majesty’s ministers or consuls abroad, or by one of his majesty’s secretaries of state, for the time being, if he does not, within six months after such warning, return into this realm, and from henceforth abide and inhabit continually within the same, he is from thenceforth declared incapable of taking any legacy devised to him within this kingdom, or of being executor or administrator to any person, or of taking any lands within this kingdom, by descent, devise, or purchase. He likewise forfeits to the king all his lands, goods, and chattels; is declared an alien in every respect; and is put out of the king’s protection. It is unnecessary, I imagine, to observe how contrary such regulations are to the boasted liberty of the subject, of which we affect to be so very jealous; but which, in this case, is so plainly sacrificed to the futile interests of our merchants and manufacturers.
The final chapter of Book 4 is chapter 9, "Of The Agricultural Systems, Or Of Those Systems Of Political Economy Which Represent The Produce Of Land, As Either The Sole Or The Principal Source Of The Revenue And Wealth Of Every Country". Man, Smith is definitely the king of the run-on sentence. This goes back to the "agriculture is better than manufacturing" meme. He reviews a French theory, attributed to Colbert and Qttesnai, which places merchants, artificers and manufacturers into the "unproductive" class.
Artificers, manufacturers, and merchants, can augment the revenue and wealth of their society by parsimony only; or, as it is expressed in this system, by privation, that is, by depriving themselves of a part of the funds destined for their own subsistence. They annually reproduce nothing but those funds. Unless, therefore, they annually save some part of them, unless they annually deprive themselves of the enjoyment of some part of them, the revenue and wealth of their society can never be, in the smallest degree, augmented by means of their industry. Farmers and country labourers, on the contrary, may enjoy completely the whole funds destined for their own subsistence, and yet augment, at the same time, the revenue and wealth of their society.
I'm really not sure I get this. Smith goes back to the the open market being best.
Those systems, therefore, which preferring agriculture to all other employments, in order to promote it, impose restraints upon manufactures and foreign trade, act contrary to the very end which they propose, and indirectly discourage that very species of industry which they mean to promote.
It is thus that every system which endeavours, either, by extraordinary encouragements to draw towards a particular species of industry a greater share of the capital of the society than what would naturally go to it, or, by extraordinary restraints, to force from a particular species of industry some share of the capital which would otherwise be employed in it, is, in reality, subversive of the great purpose which it means to promote. It retards, instead of accelerating the progress of the society towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labour.
So with regard to current US politics, Smith would advocate getting rid of all forms of corporate welfare.

Well, that's 4 books down, 1 to go. The last book is on the revenue of the state.

Thursday, April 03, 2014

Future Letter to the Editor

I'll wait til next week to post this one to the Herald Leader, but I'll save it here since I've got the Jefferson quote in the paste buffer.
What would the Founding Fathers think of our current plutocracy? Here's a quote from a letter written by Thomas Jefferson in 1814:

"we have no paupers, the old and crippled among us, who possess nothing and have no families to take care of them, being too few to merit notice as a separate section of society, or to affect a general estimate. The great mass of our population is of laborers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families. They are not driven to the ultimate resources of dexterity and skill, because their wares will sell although not quite so nice as those of England. The wealthy, on the other hand, and those at their ease, know nothing of what the Europeans call luxury. They have only somewhat more of the comforts and decencies of life than those who furnish them. Can any condition of society be more desirable than this?"

I think Jefferson would view our current plutocracy, with its billionaires with multiple castles, airplanes, and yachts, with shock and horror.

Letter to the Editor

Looks like the last letter is not going to get published. Let's try again!
Hello Plutocracy, Goodbye Democracy

In all seriousness, who could possibly believe that the Founding Fathers intended "freedom of speech" to include unlimited election campaign contributions by the ultra-wealthy and corporations? Apparently 5 Supreme Court justices and our own senior Senator, Mitch McConnell, the champion fund-raiser in all of history, expect us to think that they could and do believe this.

Common sense tells us that their true motive can be nothing but to continue the consolidation of power in this country into the hands of the ultra-wealthy and the corporations. Even if all of us can learn to ignore the perpetual blare of attack ads and vote in our own self interest, those we elect, Republican or Democrat, will still listen to the money that they think they need to be elected.

Given the recent McCutcheon Supreme Court ruling, it will take a constitutional amendment to correct this travesty and implement elections financed only by public funds. This is sure to be a long, drawn out process. So in the short term, I guess we all just have to learn to love living in a plutocracy, watching the rich get richer and everyone else get poorer, and trying to remember what it was like to live in a democracy.

Sunday, March 30, 2014


No, this isn't a post about Random Paul, our beloved junior senator. Man, I keep posting them, no one seems to like my snarky Random Paul memes. Maybe just too snarky? There's
Here in KY we call him Random Paul because you never know what he's going to say next.
The Boy Who Would Be King
Sarah Palin with a Y chromosome, a narcissistic lightweight.
Random Paul is like a stopped clock. Occasionally he gets something right.
Oh well, I'll keep on plugging I guess. I of course recommend my post from before his election (sigh) "Random Paul's Top 10 Randomisms".

Life has been somewhat disrupted lately. My mother-in-law died March 16, 2014, after having a massive heart attack and stroke. She was making oatmeal for her 55 YO Downs Syndrome son, said, "I feel woozy.", passed out, and never regained consciousness. 93 YO, pretty coherent til the end, but in increasing pain. For the next few months, I will be taking a turn watching Uncle Bruce 1 or 2 days a week with his sibs and other sib-in-laws. I'm going to try to get him out to shoot some hoops, we used to do that.

So haven't read any of "Wealth of Nations" for over a month. Magazine stack is clear, so hopefully I'll be back on it RSN. I have stayed current with my online course "The Age of Sustainable Development". Main thing I have gotten from that course is just how screwed sub-Saharan Africa is:

  • tropical diseases;
  • no coal (for an industrial revolution);
  • no oil;
  • no major rivers, giving many land-locked countries;
  • no connected network of railroads like India has, since there were many colonial occupiers rather than 1.
I did read the collection of short stories "Adrift in the Noƶsphere" by Damien Broderick. He's Australian and has been writing for decades but somehow stayed under my radar. It's a nice mix of stories. A couple are pretty creepy, particularly the final one with a UFO abduction theme.

Wednesday, March 12, 2014

Letter to the Editor

I wrote a very snarky letter to the editor re our beloved junior senator Random Paul -- The Boy Who Would Be King -- a couple of weeks ago. I was pretty sure it wouldn't get published -- way too snarky -- but, I didn't save a copy it anywhere, and now it's gone. I am going to continue to write letters to the editor -- I've had a few published over the last few years -- and I think I'm going to write them in Blogger rather than directly on the Herald-Leader site so that I'm sure to have a copy. So here's the latest.
Our senior senator Mitch McConnell has in recent statements continued to deny climate change, despite 97% of climate scientists finding that the evidence for human-caused global warming is overwhelming. I guess that, sadly, it is the new normal for Republicans to ignore and deny any science that is inconvenient for their donors or unpopular with their voter base. But it is surprising to me that McConnell is also ignoring the strident alarm being raised by the US military. In its 2014 Quadrennial Review, the Pentagon states that climate change is real; that it posts a clear and present danger to our troops worldwide; that is a "threat multiplier" and a terrorist incubator; and that we should take urgent action to combat climate change.

So the next time McConnell or other Republicans say that they support our troops, ask them why they are ignoring the Pentagon's recommendations that we address climate change as a urgent matter of national security.

The Pentagon report is available at:

Tuesday, March 04, 2014

Light Reading

I was in Naples FL from February 4 to February 27. It rained twice. It was cool (overnight low 45 degrees, high of 66) 1 day. Other than that, 2 weeks of highs around 83-84, which are actually a little hot, and 1 week of highs in the upper 70s, which are perfect. You leave all the doors open, mild breezes move the air, perfect. Plus green and colorful flowers everywhere. Very hard to come home to gray and white and more snow and ice.

I also really miss the exercise opportunities that I have down there. The biking is weird -- mostly bike lanes on 4 and 6 lane highways -- but I still got to bike 9 times for 430 miles total, an average of 47.7 miles. That puts me on the bike 3-4 hours, and that seems to put too much stress on my hands. I still have some numbness in the ring and pinky fingers on both hands. I was biking with a guy on one of the "leaning on your forearms on the handlebar pads" bikes, he said that bike totally fixed the hand thing for him. So I'm going to look into getting that type of bike.

I also walked 10 times for 50 miles. The default walks in the community there wind up at around 4.5 miles, so I've come up with some more convoluted routes that get up to 6-7 miles. At the end I was also stopping by the exercise room towards the end of the walk and doing arm and torso work.

Well, that pretty much seemed like a vacation, so I decided to reread "The Great Book of Amber", by Roger Zelazny. This is the 10 Amber novels, which were all around 200 pages and published from 1970 to 1991, in 1 book. There are actually 2 stories of 5 books each, the 1st of the older generation doing a "Game of Thrones" thing and vying for the "King of the Multiverse" job, the 2nd of the next generation vying for the "King of Primordial Chaos" job. They are very quick reads. I like the 1st 5 better. I liked these a lot back in the day, they were pretty good on the reread. The 1st one was funny, hippy slang ("I couldn't dig what he was talking about") definitely jarring and gave some chuckles.

Then at the recommendation of my brother the author, I read "Song of the Vikings: Snorri and the Making of Norse Myths", by Nancy Marie Brown (2012). This was a biography of Snorri Snurluson, an Icelander of the early 13th century. Snorri was responsible for the creation of the Eddas, which are our major source of Norse myths, which I have always loved. Iceland at the time was independent -- it came under Norwegian rule later in the 13th century. If you weren't a mighty warrior, you could get by on being a mighty poet (called a skald), which describes Snorri. Snorri eventually became the most powerful man in Iceland, before his allies and in-laws betrayed him and he was killed.

I think the most interesting thing about this to me was how many of my favorite stories were apparently not passed down from older stories but were instead created whole cloth by Snorri. 1 example is the 1 where Thor and Loki visit the giant after spending the night in his glove and their young male companion races Thought, Loki has an eating contest with Fire, and Thor wrestles Old Age.

This was an interesting and a quick read, and puts me up to 3 biographies that I can remember reading in my life. The other 2 were Albert Einstein and Harpo Marx.

I am 6 lectures and quizzes into the online course I'm taking at coursera on "The Age of Sustainable Development". I skim or read the recommended reading materials, which takes 2-3 hours. I then watch the lecture, which are up to around 1 hour 40 minutes. I then take the quiz with the help of the PDF of the lecture, which takes around 5 minutes. It's getting a little boring, but maybe the slower rate of information transfer will help it stick. Around 1/3 of the quiz questions involve looking stuff up in online databases and doing some easy math, which I guess is an OK thing. It doesn't seem like I'm really learning much new stuff, but getting a lot of this knowledge in the framework of a course again will probably help it to stick.

Sunday, February 02, 2014

The Wealth of Nations, Book 3

Book 3 of "Wealth" is titled "Of The Different Progress Of Opulence In Different Nations". This book comes across more as history than as economics, and actually doesn't seem to have a lot to do with its title. It's short, only 70 pages or so.

Smith's contention that agriculture is superior to manufacturing and trade underlies a lot of the narrative of this book. He favors systems where small landholders (yeomen) actually own the land, as this encourages them to invest their stock in improving the land. Feudal and serf-based systems he describes as being a form of slavery.

Very interesting was the fact that most towns and cities (burghs) were chartered by kings to oppose the power of the landed barons. Getting off the farm and into a city meant even more then than it does now: if a serf ran away from his land and his master couldn't find him for 1 year, then he was free of his master, and cities were the best place to hide for that year.

Most inheritance at the time was primogeniture: the oldest son inherited everything. It seems kind of backwards and primitive to me (disclosure: I am a 2nd son), but it totally makes sense as the only way a landed baron could keep his land, the basis of his power, together.

Sometimes you wander how conservatives can be so hard-hearted and wrong-minded. Some of Smith's reads of human nature are painful:

The pride of man makes him love to domineer, and nothing mortifies him so much as to be obliged to condescend to persuade his inferiors. -- hard to believe this book was published 14 years after "all men are created equal."
Another lesson on the English class system:
In England, besides, a lease for life of forty shillings a-year value is a freehold, and entitles the lessee to a vote for a member of parliament; and as a great part of the yeomanry have freeholds of this kind, the whole order becomes respectable to their landlords, on account of the political consideration which this gives them. -- "Money talks, bullshit walks." seems to be a recurring theme across the books.
More nice classism:
Through the greater part of Europe, the yeomanry are regarded as an inferior rank of people, even to the better sort of tradesmen and mechanics, and in all parts of Europe to the great merchants and master manufacturers.
The lords despised the burghers, whom they considered not only as a different order, but as a parcel of emancipated slaves, almost of a different species from themselves. The wealth of the burghers never failed to provoke their envy and indignation, and they plundered them upon every occasion without mercy or remorse.
Smith continues with his disdain for the landed gentry:
Merchants are commonly ambitious of becoming country gentlemen, and, when they do, they are generally the best of all improvers.
One contention he makes is that, before they were cities providing manufactured goods, landed barons could do nothing with the excess produce of their land but increase the number of their retainers, increasing their power by feeding more people. Once cities started manufacturing crap stuff, they could instead now trade their surplus produce for money and become consumers!
These gradually furnished the great proprietors with something for which they could exchange the whole surplus produce of their lands, and which they could consume themselves, without sharing it either with tenants or retainers.
And at this point, down went the number of retainers. So the free market, consumer society kind of snuck up on everybody:
A revolution of the greatest importance to the public happiness, was in this manner brought about by two different orders of people, who had not the least intention to serve the public. To gratify the most childish vanity was the sole motive of the great proprietors. The merchants and artificers, much less ridiculous, acted merely from a view to their own interest, and in pursuit of their own pedlar principle of turning a penny wherever a penny was to be got. Neither of them had either knowledge or foresight of that great revolution which the folly of the one, and the industry of the other, was gradually bringing about.
Here's some foreshadowing of our modern multinational corporations:
A merchant, it has been said very properly, is not necessarily the citizen of any particular country.
I had to look up several odd, archaic words in this book:
  • entails -- noun, a settlement of the inheritance of property over a number of generations so that it remains within a family or other group.
  • engrosser -- noun, basically a monopolist.
  • regrater -- noun, basically a commodity speculator.
  • forestaller -- noun, someone who stores commodities for a socially useful purpose, i.e., for times of shortage, rather than as an engrosser or regrater.
The next book appears to be a huge one, so I'll go over to some short stories for a break.

Wednesday, January 29, 2014

Buy Fresh, Buy GMO

The title of this post comes from the cover of the latest issue of MIT Technology Review. Technology Review joins Scientific American in promoting GMO crops. These are the 2 most respected popular science publications in the world. I've read these 2 mags every month for > 40 years. To my knowledge their integrity is unimpeachable.
more than 15 years of experience with transgenic crops have revealed no health dangers, and neither have a series of scientific studies.
Humans have been creating plant hybrids for 1000s of years. Genetic engineering techniques let us insert just the desired gene instead of 1000s of genes -- surgery with a scalpel instead of a chainsaw.

But, we still need to be smart about how we use genetic engineering. Plants are promiscuous with their genetic material, there's no way the Roundup-Ready gene is not going to wind up in weeds. I believe it already has -- that was a bad idea.

Monsanto's heavy-handed patent policies and control of seed stock are reprehensible. But many GMO crops, like the golden rice that can save the lives of 100Ks of children who die from vitamin A deficiency, have been given to the developing world under much better, but still slightly restrictive, terms. But groundless fear is preventing their use.

The subtitle from the cover:

Population growth and climate change will make it harder to feed the world. We need to overcome our fears of genetically modified food.