THE BINDING POWER OF STONE MONUMENTS
There is something that I have never seen written in history that should be explained. It applies from ancient times until now, and concerns stone monuments and their enduring power to bind nations together.
To begin with, what makes Egypt different from the rest of north Africa? The simple answer is that Egypt has been a nation since ancient times while Libya, Tunisia, Algeria, Morocco and, Chad are relatively recent arrangements as nations.
My hypothesis is that it is the pyramids, and other monuments such as the Sphinx and Abu Simbel, that literally held Egypt together. If not for these massive monuments, Egypt would be just another name from ancient history and not the nation that it is today.
One thing that is different in history about Egypt is that those who managed to conquer it did not erase it's identity, but rather adapted it themselves. The Hyksos were a Semitic people who conquered Egypt in ancient times. But they, in many ways, became Egyptians rather than the other way around.
Likewise, the Seventh Century Arab conquest of Egypt converted it to Islam but in no way diminished it's national identity. Assyria and then Babylon both matched Egypt in power, but neither has existed in two-and-a-half millenniums while Egypt still stands. I see this as all due to the influence of the pyramids.
The other modern nations of north Africa have ancient ruins, Carthage in Tunisia began as a Phoenician colony and was later the great rival of Rome. But there is nothing like the pyramids of Egypt anywhere else in the region.
Ethiopia, once known as Cush or Kush, is another ancient nation that has endured to the present day. It lies to the south of Egypt, in east Africa. Just like Egypt, Ethiopia has pyramids from ancient times that has held it together as a nation. Ethiopia has about twice the number of pyramids that Egypt has, although they are smaller in scale.
Greece, across the Mediterranean from Egypt, is another modern nation that has been around since ancient times. Just as Egypt has staying power as a nation that nearby kingdoms in north Africa did not, the same can be said of Greece with regard to the rest of the Balkans. The difference being that Greece had stone monuments remaining from it's early days, such as the Acropolis, which held it together as a nation. Alexander's empire did not hold together after his death, but the home country did in the same way as Egypt.
What about the modern nation of Iran? It also goes back to ancient times, and is traditionally known as Persia. The name was changed to Iran, meaning "The Land of the Aryans", in 1935. Persia did not have pyramids like Egypt, but did have abundant ruins from it's glory days.
The ruling shah that was overthrown in 1979 had celebrated the 2500th anniversary of the Peacock Throne in 1971. Possibly the grandest party ever given in human history was held in the ruins of Persepolis in the autumn of 1971. There is an article on www.wikipedia.org about it titled "2,500 Year Celebration Of The Persian Empire". Only a king that doesn't need approval from congresses and parliaments to spend money could put on a party like this.
Further east, we find a great modern nation in China that has been around for about as long as Egypt. China is a vast country that would seem likely to fragment into smaller states. The Chinese language is written in one way but spoken in several ways besides the standard Mandarin, such as Cantonese and Fujianese.
But, once again, we find the binding power of stone monuments at work. The legendary "Great Wall of China" was a network of walls that were built to keep out barbarians from the north. My theory is that it accomplished something that was much more important, it was what bound this diverse country together into one so that it has lasted from ancient times until now.
To the south, the Khmer people of what is now called Cambodia have been there as a nation for a very long time. There was once a great Khmer Empire. As we might expect, we find an ancient stone monument from the early days of the Khmer Empire in the Temple of Angkor Wat.
It seems to me that without the binding power of such stone monuments, nations simply do not last for thousands of years. Neither language nor religion can hold a nation together over the long span of history like a massive stone monument. The working together to build the monument would likely be a powerful force in the binding of the nation to begin with.
This concept is similar to "The Mecca Hypothesis", on the world and economics blog, where we saw how the pilgrimage to Mecca had the effect of maintaining the Arabic language as one while the early European languages on the other side of the Mediterranean fragmented into the languages that we see today. "The Center Of The World" explains my view of the effect that the monuments of ancient Egypt have had across the world.
THE POWER OF WALLS
In "The Binding Power Of Stone Monuments", we saw how the stone monuments that a nation produces can be the determining factor in whether a nation lasts for a historically brief time, or for thousands of years.
Today, I would like to discuss a related concept, how the development of nations is affected by walls. Examples of how physical walls, constructed along borders, affect developments far into the future are much more rare than examples of how nations are bound, over the long term, by stone monuments that they have constructed. But there are three examples, that I can see, where physical walls have had a great long-term effect. A wall along a border can have a powerful effect on future developments long after it ceases to be an actual political or military barrier.
Let's start with Scotland. Scotland was a separate nation from England until 1707, and has always had it's own identity even though it speaks English and both nations landed on the same side of the Protestant Reformation. Scotland is more Celtic in nature than England, but it seems to me that there had to be more to the separate sense of identity then this.
But what about Hadrian's Wall? it was built by the Roman emperor of that name to keep out the tribes to the north. This means that the wall has been there for two thousand years, making it one of the oldest structures in Britain. The wall is not exactly on the boundary between England and Scotland any more, but what kind of psychological effect must it have had through all of that time?
The question is now why Scotland has a separate identity, but how it could not have a separate identity? If you take people that are exactly the same, and have a wall across their territory for two thousand years even if that wall is not an actual impermeable barrier, and you can be sure that there will be some kind of separate identity on opposite sides of the wall.
About six hundred years after the construction of Hadrian's Wall, but before England was a united country, there was a kingdom known as Mercia in the region that is now known as the Midlands, as well as areas to the south and west. I am actually a Mercian because this includes the area where I was born. The Midlands is still occasionally referred to as Mercia.
There was a great Mercian king, known as Offa. Mercia was a very powerful state at the time of Offa's reign and this period, when Mercia was the dominant state of those that now make up England, is known as the Mercian Supremacy. Offa is recorded as having begun construction of a military barrier against the Kingdom of Powys, the area that is now known as Wales, to the west. This barrier, known as Offa's Dyke, was a simple ditch and berm of earth along the border, designed to give a military advantage to the Mercian side. I had been to castles in the area, such as Chepstow and Goodrich, but cannot remember ever seeing Offa's Dyke and never considering it as really any more than a name on a map.
But now I realize how important Offa's Dyke has been, not for England but for Wales. It has formed essentially the boundary between England and Wales ever since and, more importantly, has been a basis for a separate sense of Welsh identity in the same way as Hadrian's Wall for Scotland.
Wales and Scotland are Celtic domains that have always had some sense of a separate identity from England. But my conclusion is that these two walls, Hadrian's Wall and Offa's Dyke, have been essential to that separate identity. There are two other such Celtic domains in the area, other than Ireland, which do not have as strong of a separate identity. These are Cornwall, the southwestern county of England, and Brittany in France.
Brittany occupies the long peninsula off western France, giving it a sound geographic definition. Cornwall is on a parallel peninsula and once had it's own language. But neither has the separate sense of identity of Wales or Scotland. This can be explained by the fact that neither is defined by a wall, like Hadrian's Wall or Offa's Dyke.
Now, let's apply this concept of the power of walls to the other side of the world. The most significant wall in the world is by far the Great Wall of China. Wikipedia describes it as having been begun by the first Chinese emperor. The Great Wall is actually a complex structure of many different walls that were built over centuries. Construction of these walls certainly helped to bind China as a nation, as described in "The Binding Power Of Stone Monuments".
I read an article that one thing about the world that seems incongruous is that Siberia should really belong to China, rather than Russia. There are quite a few articles online about this issue. Siberia seems psychologically very distant from Moscow, and it has vast stores of resources that China's voracious economy needs. The native people of Siberia look much more Oriental then European.
Historically China has traded abroad along the fabled "Silk Road", which included both land and sea trading routes, and has sent ventures like the fleet of Admiral Zheng He abroad. To the west, China incorporated the vast central Asian territory of Xinjiang. But China has never had the same kind of economic interactions with lands to the north, what is now known as Siberia.
My conclusion is that the reason for this is that the Great Wall acted as a psychological barrier over the centuries, and prevented incorporation of Siberia into China.
This does not mean that China would necessarily be better off today with Siberia. For one thing, it was the shared construction of the Great Wall that helped to bind it as a nation as described in "The Binding Power Of Stone Monuments". For another, there is the phenomenon known as the "resource curse" or the "paradox of plenty", where the people of a nation that is rich in natural resources end up being worse off as a result.
Wednesday, January 1, 2014
The Yard Society
If anyone really wants to understand North America, and what makes it different from most of the rest of the world today, there is a vital component to that understanding that has nothing to do with technology or democracy. North America could literally be renamed "Yardland".
The people of North America, particularly those of the suburbs, insist on having spacious front yards and back yards adjoining their homes. I have not yet seen an article detailing just how profoundly this affects the entire society, so I decided to write such an article myself. This, more than anything else, is what makes the continent different from the rest of the world.
When homes have yards, it means that everything must be further apart. This brings us to what we could call "The Automobile Spiral". Having everything further apart means that car ownership is a practical necessity. This, in turn, means that everything must be still further apart because cars require a driveway at the home to park in, wider streets to accommodate them and, highways for through traffic to avoid local congestion.
Most of all, cars mean that there must be parking lots wherever people will be driving to. It is these parking lots that shape the forms of our cities like nothing else. Urban areas balloon with parking lot space so that cities tend to sprawl into one another, rather than having much of a sharp definition.
None of this takes place if buses, streetcars, bicycles and, walking can accomplish daily transportation. But that is only practical without yards. Levittown, New York is considered as the prototype postwar suburb and was followed by a development in Pennsylvania with the same name. Those suburbs were named after the builder, but could just as easily have been named "Yardtown".
Here is a map link if you want to have a look: www.maps.google.com . Compare the suburbs of North America with older cities in other countries, where most homes do not have much of a yard.
The Yard Society cannot be found anywhere, it requires a large country with a lot of open space on which to establish all of the yards. There are economic requirements also, a middle class that can afford the homes with yards and the cars that they make necessary. Obviously, there could be no yard society without modern technology.
Postwar Britain had it's own version of suburbanization with the so-called "New Towns", building towns where there had been none before. Most turned out well, but there was not the available space that there was in North America and it did not develop into the same kind of Yard Society.
Individual yards replaced the town square of days gone by. Yards became an extension of personal space. The emphasis was on the individual, rather than the group, and apartment buildings seem to be rarely built with communal courtyards anymore. It is no secret that ethnic groups which live in pre-suburban areas of cities tend to be more communal that suburbanites.
The entire economy is shaped by those backyards and front yards. The auto industry quickly became one of the most important. The oil industry grew alongside it to provide fuel for the cars that were made necessary by the distance which yards put between everything. Global politics was built around making sure that we had the supply of foreign oil that we needed for the cars that we needed because of the yards. Burning this oil for fuel brought us into the peril of global warming.
Building and maintaining the necessary highways was yet another major industry. The Urban Renewal movement, from the 1950s to the 1970s, was the reshaping of the older sections of the city to accommodate the cars. New developments were designed for cars, rather than people, such as drive-through fast food restaurants.
The cars that we needed because of the yards affected the health of the general population. Driving cars, instead of walking or bicycling as in days past, is sedentary. That brought about more of diseases like diabetes, heart disease, obesity and, certainly increases the chances of developing cancer. The sedentary way of life brought about all manner of exercise gyms and routines, as well as an entire diet industry. All of it was ultimately rooted in our yards, as is the typical grid street pattern of cities.
The yards themselves have had a great effect on the culture from pools and barbecues to ease of pet ownership, as well as the fence and lawn care industries.
It is yards, more than anything else, that makes North America different from the rest of the world.
The Three Sides Of History
I find that there are really three sides to history. In the middle, there is the history with all of it's ideology and high principles as it is portrayed in the history books. To one side of this there is religion, the fact that people are designed to believe in something, and when they do not believe primarily in a religion they tend to put another cause in it's place. The cause or movement gains supporters simply because they require something to believe in.
The third side of history, on the other side of the lofty principles in the middle, is the one that I want to discuss today. It is my belief that history is often idealized and over-simplified in that it is actually driven largely by mundane personal motives.
When a new country gains independence it may be trumpeted as the fulfillment of some lofty ideal, but is more likely to spring from the fact that a majority of people perceive that it will make them better off than previously. U.S. independence in 1776, for one example, was largely brought about because Britain had forbidden further westward expansion of the colonies and a lot of people thought that they were missing out on wealth to be gained. A driving force behind the formation of the Confederacy was simply the unwillingness to give up slave labor (labour).
The idea of communism became so popular because it was based on the gain of the individual, too many of which were economically oppressed by wealthy capitalists. Capitalism had earlier started when a lot of people felt oppressed by rigid class systems and hereditary nobility, and were sure that they could do better in a meritocracy. In times of change, majority opinion often turns out to be wrong and a new system can be an overreaction to the faults of an old one, but the betterment of the individual is what drives such change no matter how much history clothes it in high ideals.
The race to the moon during the 1960s was not so much the great scientific crusade that was portrayed as it was an economic competition between capitalism and communism, between the U.S. and Soviet Union, to be the first to reach the moon. The U.S. put humans on the moon first, but the Soviets took photos of the previously-unseen far side of the moon first.
The Reformation, the breaking away of the new Protestant churches from Catholicism in the Sixteenth Century, was not only about religion. It was also about material betterment. For the Protestants, there was resentment of the flow of wealth from Germany to the Vatican so that the mostly-Italian cardinals could live like royalty. For the Catholics there was reluctance to accommodate the new movement by giving up the profitable sale of indulgences, the forgiveness of sins for a monetary price.
For the first Buddhists and Jains in India, it was almost certainly not only about the new faith but also about escaping the lower castes in the caste system of Hinduism.
For Nazi supporters in the crushing economic depression of the 1930s, it was probably not so much about ideology and promises of a glorious "Thousand-Year Reich" as it was the jobs brought about by the factory orders for military equipment and the virtual elimination of unemployment by the drastic expansion of the armed forces.
What it all comes down to is the question "Will I be better off, or not". Separatist tendencies, the desire of a group of people to break away and form their own country, tend to thrive during economic downturns. It is often not as much about the national identity portrayed in history as simple economic welfare.
In any conflict, a powerful factor in which side people will take is often not the ideology in the history books at all but simply which side looks as if it is going to win. If there is one lesson of history, it is that those on the winning side tend to end up a lot better off than those on the losing side. This forms a spiral in that it then draws still more people who select it as the side likely to win, the ideology and high principles of the history books is secondary.
The Inverse Square Law And Society
I have written two previous postings about more that could be done with Sir Isaac Newton's Inverse Square Law. One was "Do We Really Need Calculus", on the progress blog www.markmeekprogress.blogspot.com . This is about my observation that just about anything that can be calculated with calculus can also be accomplished by creative use of the Inverse Square Law.
The other was "Galileo's Paradox And Newton". This explains how Galileo's Paradox, that every number must have a perfect square yet few numbers are perfect squares which proves numbers must be infinite because this cannot be true of any finite set of numbers, is also solved by Newton's Inverse Square Law. As numbers get higher, perfect squares become more sparse according to the Inverse Square Law.
The Inverse Square Law is basically that if a source of light is twice as far away, it will be only one-quarter as bright. This is because the circle of circumference at twice the distance will have four times the area or circumference. Using the Inverse Square Law to explain Galileo's Paradox is simply applying it to numbers instead of space.
Today, I would like to point out that there is still more that is explained simply by this extremely versatile inverse square law.
First, there is one fact about technology, and all human organizations and enterprises, that I would like to establish. The more complex something is, the more room it has for improvement. Consider a chair and table. Chairs and tables are simple devices that have remained pretty much the way they are today since ancient times.
Now, consider a machine. Machines have many parts, and thus many ways in which the parts fit together. This means that machines have a lot of potential for improvement, since each part and each way that each part fits together could potentially be improved.
Technology has progressed on a steep upward curve. In times past, life remained essentially the same for century after century. Then, progress gradually began the upward curve which continues today. Some would consider the Industrial Revolution as the beginning of this steep upward curve. But few people would doubt that there has been vastly more technical progress in the sixty years from 1950-2010 than there was in the sixty years from 1800-1860.
My explanation is that the undeniable upward curve of technological progress is a function of the Inverse Square Law applied to the complexity of technology, based on the fact that the more complex something is the more room it has for improvement. Just as the area of the circumference circle of the Inverse Square Law grows larger as we move out from the point of origin.
Technology has a certain complexity because it is the result of us imposing our higher level of complexity on the lower level of the surrounding environment. This complexity gives it room for improvement, but this improvement usually means more complexity which gives the machine even more room for improvement. Hence the ever-steeper upward curve of technology, and it is all a function of the Inverse Square Law.
It is true that machines become obsolete over time, as more progress is made. But it must be remembered that a machine cannot be considered as an island of complexity unto itself, but exists within the context of the entire society that is progressing.
What about economics? If the Inverse Square Law is as all-encompassing as I am claiming it is, should it not have an influence on economics as well?
It seems to me that Newton's Inverse Square Law actually underlies the fundamental Law Of Supply and Demand. Suppose that a product is in demand, but is expensive. Now suppose that we suddenly start manufacturing four times as many of that product. The price is likely to drop by one-half, according to the Inverse Square Law.
If only the same number of people bought the product after four times as many were produced, the price would probably drop to one-quarter. But the increase in production would likely get more people to buy the product, who did not previously buy it because it was too expensive. This increased demand would cause the product to drop in price to one-half, rather than one-quarter, thus manifesting the Inverse Square Law.
Of course, the real world is complex and it may not work exactly according to these figures for each and every product. But, on the whole, we can safely state that economics, like progress in technology, operates by the Inverse Square Law which is commonly phrased as the Law of Supply and Demand.
Another economic rule which guides how people behave is the Law of Diminishing Returns. If you gained a million (dollars, pounds, euros, rupees, yuan, rubles, pesos, etc.) you would be better off. If you gained two million, you would be even better off than if you gained only one million. But you would not be twice as better off if you gained two million than if you gained one million.
While we cannot be precise with this, because it involves human nature, it is easy to see how this also is based on the Inverse Square Law. The further out something is, or the more that you already have, the less impact something new will make in relation to it's volume.
The Euro, The Gold Standard And, Jimmy Carter
If you are wondering what one earth the euro, the gold standard and, former U.S. president Jimmy Carter have to do with each other, read on.
Let's begin with the gold standard. This is a system that is no longer used by any country in the world. The gold standard is the idea of basing a country's money on gold in order to provide currency stability. This used to be done by either actually making coins out of gold or, more often, issuing paper currency notes that are defined in value as being equivalent to a given quantity of gold. The notes may or may not be redeemable in gold on demand.
When a country begins printing money, particularly if it is a new country that came into being by fiat or upheaval, there may not be a lot of confidence in it's money. Backing the currency with gold provides the confidence that is necessary for the functioning of the economy. Backing a currency with gold also provides currency stability in troubled times, limiting any swings in value. If we want to virtually eliminate inflation, all we have to do is to peg the currency to gold.
But the gold standard also has disadvantages. It limits the power of a government to stimulate the economy by manipulating the currency supply. If all currency issued has to backed by actual gold, the government cannot just print money as it sees fit. The gold standard did not prevent the 1929 crash and Great Depression that followed, and it is no secret that countries that were on the gold standard at the time, including the U.S., took longer to recover from the crash than those that were not on it. The gold standard presumes that the price of gold itself is ideally stable which, of course, it isn't.
If the U.S. was on the gold standard today, the so-called quantitative easing being done by the Federal Reserve Bank to (hopefully) bring about recovery from the crash of 2008 and the Great Recession would not be possible. This refers to the government putting money into the economy by the purchasing of bonds to keep interest rates low by increasing the money supply so that business can more easily get loans to start or expand.
The Bretton Woods agreement of 1944 was to set up the postwar international economic structure by pegging various national currencies to the U.S. dollar, which was pegged to gold. This got the postwar world on track until the arrangement became outdated and countries began leaving it. In a landmark event, known as the "Nixon Shock", U.S. president Richard Nixon took the dollar off the gold standard on August 15, 1971, this effectively ended Bretton Woods and today no nation uses the gold standard.
Next, let's have a look at another former U.S. president, Jimmy Carter.
Jimmy Carter was elected U.S. President in 1976. He was a Democrat and had nothing to do with the gold standard because Nixon had taken the dollar off it in 1971 and his vice president and successor, Gerald Ford, had finally redefined the dollar with gold not being part of the definition.
My reason for bringing Carter into this discussion is that he has really been treated unfairly by history. The term associated with his presidency, in the late 1970s, is "stagflation", meaning a toxic mixture of stagnation and inflation. We usually see inflation in the economy when it is growing, but President Carter supposedly mismanaged the economy into a high rate of destructive inflation without the growth.
I realize now that this is nonsense and is the result of Reagan-era Republican propaganda from the 1980 election. The high rate of inflation during Carter's presidency was the result of the exit from the gold standard, combined with a perfect storm of other events which took place before Carter took office.
First, there was the spending on the Great Society social programs of the 1960s. This produced prosperity at the time, although inflation afterward. There was massive government spending on the Vietnam War, and for programs like the Apollo Space Program. Then, after Nixon had taken the dollar off the gold standard, there was the Oil Embargo of 1973 followed by a steep climb in the price of fuel. As we know only too well, when fuel gets expensive it not only cuts into everyone's purchasing power, but it makes everything else more expensive because the transportation costs of products factor in with production costs.
When a currency is taken off the gold standard, the government is free to print currency at will and it's value "floats" with the total value of goods and services produced in the economy divided by the amount of currency printed. Printing money can thus be expected to bring about inflation.
A very moderate amount of inflation, maybe a couple of percent per year, is not necessarily a bad thing because it acts as a cushion against deflation, which is worse. If prices are deflating, it doesn't make sense to manufacture things because, by the time they can be sold, the manufacturer might have to sell the goods for less than it cost to make them.
The gold standard became outmoded in the modern world, but leaving the standard brings a certain amount of risk because it almost inevitably results in inflation when the currency supply is no longer constricted. The most notorious inflation that the world has ever seen is, of course, Germany in the 1930s. According to the article on the gold standard on www.wikipedia.org , this was the result of the country being unable to return to the gold standard because of it's gold reserves being depleted by First World War reparations payments.
These factors all converged on Jimmy Carter's presidency, but in no way were they his fault. I am not faulting Nixon for taking the country off the gold standard in 1971, actually it should have been done sooner. Neither am I faulting Ronald Reagan for purposely inducing the recession of the early 1980s, because that was the only way to get the resulting inflation under control.
But blaming this on Carter is like blaming the government for a hurricane. Reagan's rightward economics is what it took to stop the inflation that had been unleashed by the end of the gold standard, and it's convergence with the other spending factors, but he stayed too far right throughout the 1980s and it resulted in the Crash of 1987.
Finally, for the euro.
My view of the common European currency, the euro, is that it acts as a kind of artificial gold standard. Instead of pegging their currencies to gold, Europeans have pegged them to one another's by joining a common currency. Like currencies on the gold standard, the euro has proven to have stability and has simplified transactions between countries on the same standard. Inflation has also not been much of an issue.
But the economies of the struggling countries in Europe are also manifesting the great disadvantage of the gold standard. The governments of these countries can no longer print their own currency and so are limited in what they can do to help bring about an economic recovery. It is much more difficult to put money into the economy to bring down interest rates, and make funding more available, so that businesses can start and expand. We looked at the debt of these struggling countries in Europe in the posting "Inflation And Debt", on this blog.
As of this writing China does not allow it's currency to float freely, although Xi Jinping's 2013 reform package included liberalizing currency policy. But the economy of China is still growing without requiring anything like the quantitative easing being done in the U.S. If the time ever came when the economy needed help from the government, pegging the currency would no longer make sense.
Let's begin with the gold standard. This is a system that is no longer used by any country in the world. The gold standard is the idea of basing a country's money on gold in order to provide currency stability. This used to be done by either actually making coins out of gold or, more often, issuing paper currency notes that are defined in value as being equivalent to a given quantity of gold. The notes may or may not be redeemable in gold on demand.
When a country begins printing money, particularly if it is a new country that came into being by fiat or upheaval, there may not be a lot of confidence in it's money. Backing the currency with gold provides the confidence that is necessary for the functioning of the economy. Backing a currency with gold also provides currency stability in troubled times, limiting any swings in value. If we want to virtually eliminate inflation, all we have to do is to peg the currency to gold.
But the gold standard also has disadvantages. It limits the power of a government to stimulate the economy by manipulating the currency supply. If all currency issued has to backed by actual gold, the government cannot just print money as it sees fit. The gold standard did not prevent the 1929 crash and Great Depression that followed, and it is no secret that countries that were on the gold standard at the time, including the U.S., took longer to recover from the crash than those that were not on it. The gold standard presumes that the price of gold itself is ideally stable which, of course, it isn't.
If the U.S. was on the gold standard today, the so-called quantitative easing being done by the Federal Reserve Bank to (hopefully) bring about recovery from the crash of 2008 and the Great Recession would not be possible. This refers to the government putting money into the economy by the purchasing of bonds to keep interest rates low by increasing the money supply so that business can more easily get loans to start or expand.
The Bretton Woods agreement of 1944 was to set up the postwar international economic structure by pegging various national currencies to the U.S. dollar, which was pegged to gold. This got the postwar world on track until the arrangement became outdated and countries began leaving it. In a landmark event, known as the "Nixon Shock", U.S. president Richard Nixon took the dollar off the gold standard on August 15, 1971, this effectively ended Bretton Woods and today no nation uses the gold standard.
Next, let's have a look at another former U.S. president, Jimmy Carter.
Jimmy Carter was elected U.S. President in 1976. He was a Democrat and had nothing to do with the gold standard because Nixon had taken the dollar off it in 1971 and his vice president and successor, Gerald Ford, had finally redefined the dollar with gold not being part of the definition.
My reason for bringing Carter into this discussion is that he has really been treated unfairly by history. The term associated with his presidency, in the late 1970s, is "stagflation", meaning a toxic mixture of stagnation and inflation. We usually see inflation in the economy when it is growing, but President Carter supposedly mismanaged the economy into a high rate of destructive inflation without the growth.
I realize now that this is nonsense and is the result of Reagan-era Republican propaganda from the 1980 election. The high rate of inflation during Carter's presidency was the result of the exit from the gold standard, combined with a perfect storm of other events which took place before Carter took office.
First, there was the spending on the Great Society social programs of the 1960s. This produced prosperity at the time, although inflation afterward. There was massive government spending on the Vietnam War, and for programs like the Apollo Space Program. Then, after Nixon had taken the dollar off the gold standard, there was the Oil Embargo of 1973 followed by a steep climb in the price of fuel. As we know only too well, when fuel gets expensive it not only cuts into everyone's purchasing power, but it makes everything else more expensive because the transportation costs of products factor in with production costs.
When a currency is taken off the gold standard, the government is free to print currency at will and it's value "floats" with the total value of goods and services produced in the economy divided by the amount of currency printed. Printing money can thus be expected to bring about inflation.
A very moderate amount of inflation, maybe a couple of percent per year, is not necessarily a bad thing because it acts as a cushion against deflation, which is worse. If prices are deflating, it doesn't make sense to manufacture things because, by the time they can be sold, the manufacturer might have to sell the goods for less than it cost to make them.
The gold standard became outmoded in the modern world, but leaving the standard brings a certain amount of risk because it almost inevitably results in inflation when the currency supply is no longer constricted. The most notorious inflation that the world has ever seen is, of course, Germany in the 1930s. According to the article on the gold standard on www.wikipedia.org , this was the result of the country being unable to return to the gold standard because of it's gold reserves being depleted by First World War reparations payments.
These factors all converged on Jimmy Carter's presidency, but in no way were they his fault. I am not faulting Nixon for taking the country off the gold standard in 1971, actually it should have been done sooner. Neither am I faulting Ronald Reagan for purposely inducing the recession of the early 1980s, because that was the only way to get the resulting inflation under control.
But blaming this on Carter is like blaming the government for a hurricane. Reagan's rightward economics is what it took to stop the inflation that had been unleashed by the end of the gold standard, and it's convergence with the other spending factors, but he stayed too far right throughout the 1980s and it resulted in the Crash of 1987.
Finally, for the euro.
My view of the common European currency, the euro, is that it acts as a kind of artificial gold standard. Instead of pegging their currencies to gold, Europeans have pegged them to one another's by joining a common currency. Like currencies on the gold standard, the euro has proven to have stability and has simplified transactions between countries on the same standard. Inflation has also not been much of an issue.
But the economies of the struggling countries in Europe are also manifesting the great disadvantage of the gold standard. The governments of these countries can no longer print their own currency and so are limited in what they can do to help bring about an economic recovery. It is much more difficult to put money into the economy to bring down interest rates, and make funding more available, so that businesses can start and expand. We looked at the debt of these struggling countries in Europe in the posting "Inflation And Debt", on this blog.
As of this writing China does not allow it's currency to float freely, although Xi Jinping's 2013 reform package included liberalizing currency policy. But the economy of China is still growing without requiring anything like the quantitative easing being done in the U.S. If the time ever came when the economy needed help from the government, pegging the currency would no longer make sense.
Another View Of The Cold War
In the posting "The Wave Model Of Economics", I explained how America has alternated between a left wave and a right wave, over the past century or so. Today, I would like to point out how the left wave from around the end of the Second World War to 1980 was affected by the Cold War with Communism.
The great economic crash of 1929 happened before Communism was a major world force. In fact, this crash was what made it a major world force. Assembly line manufacturing had been implemented on a vast scale and all kind of products, from cars to radios, continuously flowed from factories. The trouble was that workers were not being paid enough to be able to afford to buy the products that they were producing, and the goods were just piling up in warehouses. Factories began cutting back on production, meaning that workers had even less money, and it spiraled into a devastating economic crash.
When the Cold War came along, we could not have harsh capitalism or that would prove the Communists correct, another such crash would almost certainly mean a Communist victory as capitalism lost credibility. During this time, it is striking how moderate Republican administrations were. Eisenhower, Nixon and, Ford were Republicans, but they were the most economically moderate Republican presidents ever. There was nothing like the harsh capitalism of the 1920s and before, which led to the Crash of 1929.
Nixon actually added to the anti-poverty Great Society programs of his Democrat predecessor. When is the last time you saw a Republican president adding to the Democrat's social programs, instead of cutting or eliminating them? In fact, we clearly went too far left in the late 1970s which brought radical Conservatives back to power in both the U.S and Britain.
Communism began to fade in the late 1980s, and the Cold War began to wind down. There had not been an economic crash, or even a deep recession, in decades. Reagan and Thatcher had to induce the recession of the early 1980s because that was the only way to purge inflation. But no sooner was the Cold War over than the economy crashed in 1987, in the most serious economic downturn since 1929. Reagan moved to the right to purge inflation early in the decade, but then stayed too far right and it brought about the crash.
There was an even more serious crash in 2008. It is no coincidence that all three of these economic crashes have came after two consecutive conservative Republican presidential terms. With no competition from Communism there came the drastic shift to the right, essentially letting those with a lot of wealth set up the system to suit themselves and take more and more money for themselves until the lack of consumer spending by the cash-strapped population brings it all crashing down.
Maybe we should have a certain nostalgia for Communism. Even if we do not really want it here, as long as it was "out there somewhere" the governments of the U.S. and other western countries had to compete with it ideologically and could not afford to have a lot of poor people and certainly could not afford to have another economic crash.
Communism came about as a reaction against the extreme "robber-baron" capitalism of the late Nineteenth Century. Having Communism as an opponent did mean the Korean and Vietnam Wars, but it cannot be denied that it also meant a much better living standard for the average person. It was at the height of the Cold War that the wealth distribution in America was the most balanced.
Now (2013), the wealth balance in the U.S. is the most slanted that it has been since the 1920s, just before the crash. There has been a dramatic improvement in productivity since 1980, but without the competition of Communism it has only gone to make rich people richer. Even with all of the additional wealth, the average American today is worse off than in 1980.
The news around the beginning of 2012 was that half the population of the U.S. was considered as poor or "low-income". More people than ever are millionaires, and many of the millionaires that there were have become billionaires, the trouble is that everything else is broke.
Since the end of the Cold War, and the ideological competition with Communism, we have returned to having it built into the system that the rich get richer while the poor get poorer. Having Obama as president has slowed this process, but has not halted it and certainly has not reversed it.
The end of the Cold War may seem like a good thing, but it is also comparable to the principle of monopoly. Suppose that there are two competing stores in a town, but then one of the stores goes out of business. At first, the employees of the remaining store consider it as a victory for their store. But then they realize that it means that the owners of the store can get away with raising prices so that their customers have to pay more, and doing away with raises so that their employees get paid less. This is simply because the customers in town now have no other store to shop at, and the employees have no other store to work at.
The American middle class is now vanishing. In the book "The Commoner Syndrome", which I wrote in the autumn of 1997, I compared it to the humps on camels. The single hump of the dromedary, or Arabian camel, which represents most people in the middle with a few rich and poor on either end, was being replaced by the two humps of the Bactrian camel, which has two humps. One hump is the rich and very well-off, the other is the poor. This model turned out perfectly with the news at the beginning of 2012 that half the population was now poor or "low-income".
It is thus my conclusion that the middle class was the product of the Cold War.
Another View On Syria
I am not stating that the conflict in Syria will necessarily be the beginning of a major war. But this is very reminiscent of the situation a century ago, prior to the beginning of the First World War. The Balkans were unstable. Archduke Franz Ferdinand of the Austro-Hungarian Empire visited Serbia. A nineteen-year-old anarchist appeared and shot him. The empire was enraged. Russia was bound by treaty to Serbia, Germany was allied to the Austro-Hungarian Empire, France was allied to Russia. Before anyone realized what was happening, the world was engaged in the greatest conflict that it had yet seen.
Today, Russia, Iran and, Hezbollah are allied to the Government of Bashar Assad. Most of the other world powers and Sunni Moslem nations favor (favour) the rebels who are trying to overthrow him, although many in the west are not quite comfortable with actually giving weapons to the rebels.
My view is that neither the rebels or Bashar Assad is actually the problem. The real problem lies with Syria itself, or rather it's boundaries. The country, like so many others in the region was put together after the First World War from the territories of the former Ottoman Empire, which was in that war on the side of the Austro-Hungarian Empire and Germany.
Boundaries can be drawn to create nations that are convenient, but have a way of being an invitation to future trouble. On this blog is a posting titled "A Few Words About Libya", I wrote it just after Muammar Gaddafi was overthrown in 2011.
If you review that posting, you will see what I mean here. Libya, like Syria, was an artificial country that was put together from the remnants of empires. Both countries are diverse, including people who would not ordinarily be a part of the same country. Libya is a vast country with two large cities, which are opposing power centers on opposite sides of the country. The old king whom Gaddafi overthrew in 1969 was from the Benghazi (eastern) side of Libya. Gaddafi was from the Tripoli (western) side of Libya. The Arab Spring movement which displaced Gaddafi began in Benghazi, and brought power back to that side of the country.
The trouble is that, while the world seems to want to be rid of dictators, a strong leader is needed to hold such a country together. Now that Gaddafi is gone, the various militias that worked together to overthrow him do not feel like giving up their armaments and the country has become a dangerous place. It is a long way from the democracy which was envisioned, with a deadly attack on the U.S. Consulate in Benghazi in 2012.
Such militias, both in Libya and among the rebels in Syria, are a reflection of the fact that it is the tribe that is traditionally the fundamental unit of society in this region, not the artificial nations that were created. This is why strong leaders are required to hold these nations together. We have a way of wanting to eliminate dictators without considering what will happen once we do. We hope for democracy, but are as least as likely to get dangerous chaos.
This phenomenon of nations which probably should never have existed, and the wars when they eventually come apart, can be seen across the world. Pakistan was partitioned from India into two sections on opposite sides of India, known as East and West Pakistan. But the two were far apart, with different people and completely different languages. The breaking point was the devastating 1970 typhoon in the Bay of Bengal, with East Pakistanis upset at the government response from the western side of the country and declaring independence as the nation of Bangladesh with the bloody war that followed.
Then there was Yugoslavia, put together from the remnants of the Austro-Hungarian Empire after the First World War and coming apart in a series of wars in the 1990s after the Communism that was holding it together disintegrated. Czechoslovakia was created in the same way and around the same time, but came apart without any violence (The Velvet Divorce).
Egypt, in contrast, has painfully made it's way to a new government after the overthrow of Mubarak in 2011, but the difference is that Egypt is a much more homogenous country, with the exception of it's Coptic Christian minority, and was not artificially created.
Africa is also a place where the tribe is the traditional unit of society but where artificial nations have been created, although there have been large nations in the past particularly in west Africa. Should it be a surprise that it is also a continent known for it's dictators, since strong leaders are a necessity for holding such artificial countries together?
Take the most populous nation on the continent, Nigeria, for example. The population is composed of three major groups; the Hausa, the Igbo and, the Yoruba. There was a civil was in the 1960s, known as the Biafran War, and a religious division between Christian and Moslem further divides the country. Nigeria is known for it's dictators simply because strong leaders are all that can hold the country together.
As I have long written, it is folly to think that all that is necessary is to take out a dictator and democracy will automatically bloom just as flowers can grow when the weeds are removed. A nation must undergo an extended period of what I refer to as "The Strong Leader Binding Phase" before it is ready to be a democracy. European countries spent a long time under the rule of powerful kings before they could be the democracies that they are today.
What about Iraq? The truth is that it is as artificial as any nation, a cobbling together of a majority of Shiite Moslems with Sunni Moslems and Kurds in the north, who long sought a country of their own. Saddam Hussein was reviled as a dictator, but what else could hold this country together? After Saddam was removed, the country came close to civil war in 2006-07 and is moving back in that direction now with lethal bombings on an almost daily basis. I recall one news article in which an Iraqi stated that "Iraq needs another Saddam".
The United States underwent it's strong leader binding phase under English kings prior to gaining independence. My theory is that the U.S. Civil War of 1861-65 came about primarily because the strong leader binding phase had been prematurely interrupted by the Revolutionary War, which brought independence.
So, you can see that we cannot just say that all we have to do is to remove Bashar Assad and then democracy will bloom, or at least it will be better than it was before. Aside from the attachment of Iran, Russia and Hezbollah to Assad, Syria is also a diverse country with it's leader being from the Alawite Shiite minority. It requires a strong leader to hold Syria together. His father, Hafez Assad , was a member of the relatively secular and socialist Baath Party and shed a lot of blood in the 1982 battle against the Moslem Brotherhood uprising.
If he were not leading Syria, with it's boundaries being as they are, another strong leader would be required to hold the country together. When there is a diverse majority and minority together within a country, it seems to be more stable if the leader is from the minority. This is true of both Assad and of Saddam Hussein, who was a Sunni in a country with a majority Shiite population.
A Few Words About Libya
(Note-This was originally written after the death of Moammar Gaddafi in late 2011).
What does the future hold for this country now that Moammar Gaddafi is dead? Let's consider the posting on this blog a while back, "The Strong Leader binding Phase", nowhere does this apply more today than in Libya. The Strong Leader Binding Phase is simply the extended period of time in which a diverse country must be ruled by a strong leader, of some description, before it can become a functioning democracy.
Many in the west would like to see Libya now become a democracy. But it most likely requires a strong leader, like Gaddafi or the king which preceded him, just to hold the country together.
Libya is a sparsely-populated country with two major cities, Tripoli in the west and Benghazi in the east. It would be quite difficult at this time for a democratically-elected president or prime minister to hold those two cities together into one country.
Libya's two major cities have historically represented two rival centers of power. The power base of King Idris, who Gaddafi overthrew to take power, was in Benghazi and the east. The power center of Gaddafi was in Tripoli and the west. The rebels who have now overthrown Gaddafi have their power base, once again, in the eastern part of the country, and early on made Benghazi their capital city.
This does not mean that a country with rival cities cannot be a working democracy. But it does require quite a bit of time together under a strong leader first. It remains to be seen whether Libya has completed this phase, they way the rebels handled Gaddafi after capturing him does not bode well.
There is another way of looking at the so-called "Arab Spring" movement, which has been underway for nearly a year now. It could also be looked at as the "African Spring". The Arab Spring movement to overthrow unwanted dictators was concentrated in six countries. Three of those countries are in Africa, and the other three in Asia.
As of this writing, the three Arab Spring movements which have succeeded in overthrowing their governments are the three which are geographically in Africa. They are the neighbors Tunisia, Libya and Egypt.
The three which have not succeeded in overthrowing their governments, at least not yet, are the three in Asia: Syria, Yemen and, Bahrain. The one of these that has come the closest to succeeding is the one closest to Africa, Yemen. It's leader, Saleh, was seriously wounded in an explosion. The one in which the uprising seems to have been less-than-successful is the one furthest from Africa, Bahrain.
There were early demonstrations in Morocco, in Africa, and in Saudi Arabia, in Asia, but these did not develop into full-scale uprisings.
If we look at this as the "African Spring", we can include the uprising in Ivory Coast against Laurent Gbagbo. It followed a pattern very similar to that in the three Arab countries in Africa where dictators were removed. The successful partition of Sudan this year also fits in with this African Spring view.
One final thought. Years ago, Nicolae Ceausescu of Romania visited Moammar Gaddafi in Libya. Later, during the autumn 1989 uprisings in eastern Europe which was the European version of the Arab Spring, Ceausescu was overthrown and executed. He was caught trying to escape. Romania was one of the last countries to have it's government overthrown in that movement.
Who would have ever thought at the time that Gaddafi would end in just about exactly the same pattern of events?
What does the future hold for this country now that Moammar Gaddafi is dead? Let's consider the posting on this blog a while back, "The Strong Leader binding Phase", nowhere does this apply more today than in Libya. The Strong Leader Binding Phase is simply the extended period of time in which a diverse country must be ruled by a strong leader, of some description, before it can become a functioning democracy.
Many in the west would like to see Libya now become a democracy. But it most likely requires a strong leader, like Gaddafi or the king which preceded him, just to hold the country together.
Libya is a sparsely-populated country with two major cities, Tripoli in the west and Benghazi in the east. It would be quite difficult at this time for a democratically-elected president or prime minister to hold those two cities together into one country.
Libya's two major cities have historically represented two rival centers of power. The power base of King Idris, who Gaddafi overthrew to take power, was in Benghazi and the east. The power center of Gaddafi was in Tripoli and the west. The rebels who have now overthrown Gaddafi have their power base, once again, in the eastern part of the country, and early on made Benghazi their capital city.
This does not mean that a country with rival cities cannot be a working democracy. But it does require quite a bit of time together under a strong leader first. It remains to be seen whether Libya has completed this phase, they way the rebels handled Gaddafi after capturing him does not bode well.
There is another way of looking at the so-called "Arab Spring" movement, which has been underway for nearly a year now. It could also be looked at as the "African Spring". The Arab Spring movement to overthrow unwanted dictators was concentrated in six countries. Three of those countries are in Africa, and the other three in Asia.
As of this writing, the three Arab Spring movements which have succeeded in overthrowing their governments are the three which are geographically in Africa. They are the neighbors Tunisia, Libya and Egypt.
The three which have not succeeded in overthrowing their governments, at least not yet, are the three in Asia: Syria, Yemen and, Bahrain. The one of these that has come the closest to succeeding is the one closest to Africa, Yemen. It's leader, Saleh, was seriously wounded in an explosion. The one in which the uprising seems to have been less-than-successful is the one furthest from Africa, Bahrain.
There were early demonstrations in Morocco, in Africa, and in Saudi Arabia, in Asia, but these did not develop into full-scale uprisings.
If we look at this as the "African Spring", we can include the uprising in Ivory Coast against Laurent Gbagbo. It followed a pattern very similar to that in the three Arab countries in Africa where dictators were removed. The successful partition of Sudan this year also fits in with this African Spring view.
One final thought. Years ago, Nicolae Ceausescu of Romania visited Moammar Gaddafi in Libya. Later, during the autumn 1989 uprisings in eastern Europe which was the European version of the Arab Spring, Ceausescu was overthrown and executed. He was caught trying to escape. Romania was one of the last countries to have it's government overthrown in that movement.
Who would have ever thought at the time that Gaddafi would end in just about exactly the same pattern of events?
The Art Of Writing
With all of the writing that I have done here, at last I have gotten to an article about writing itself.
Writing is an art, rather than an exact science, meaning that there is plenty of room for individual expression. Technology has made writing far easier, but that also means that it has made it easier for other writers so that there is more competition for the attention of the reader.
In my opinion, the best way to learn to write is simply to read. I have never taken any kind of special class in writing, other than the usual courses in school, but have been an avid reader since I began reading about the Apollo Space Program at age eight. Writing is something that has to actually be done to be learned. Just do your best, and than keep on looking for ways to improve it. That is what writing is all about, rewriting so that it gets better every time.
A skilled writer can convey fine shades of meaning by selective use of words. I have become pretty good at covering myself when I am not completely certain about something, using terms and phrases such as "at least", "at most" and, "essentially the same thing". This gives me a little bit of leeway so that if two quantities turn out to be close, but not exactly the same, I never wrote that they were precisely the same but were "essentially the same" so that I am correct whether the two turn out to be either exactly equal or just close to equal.
When writing, you should have an idea who your audience is. Are you writing for children, for engineers, or for the general public? My audience is the general public that is well-informed, seeking to learn more and wanting to read facts and points of view that they will not find anywhere else. Everything that I write here is either something completely new, or at least a new way of looking at things, and that educated readers can verify with their own reasoning. If I was just presenting scientific and other facts that were already known, readers would not need me but could just read articles on sites such as Wikipedia.
One assumption that I make about readers is that you are pressed for time. I do not write time-consuming flowery prose, but get right to the point of the article.
The most important part of writing is, of course, the content. No matter how well one can write, what really matters is what the writer is writing about. The writing is nothing more than the vehicle that delivers the content.
There are several organizational tools that are used in writing. The most basic of these are sentences, commas and, paragraphs. In longer writing, these tools can also include headings, sub-headings and, chapters.
I prefer long sentences, sub-divided by commas, in short paragraphs of usually 3-4 sentences. Each paragraph should be a new idea, structured in such a way that it makes the writing more digestible as the reader grasps one paragraph at a time. If conveying the meaning in an article can be compared to walking up a flight of steps, then each step is a paragraph. I find that, if a topic is complex, it helps to make paragraphs longer so that the jump from one major idea to another is more clear because the major ideas are each kept in one paragraph.
There are a few general rules with regard to sentences, such as do not begin a sentence with "and". But even this is not a strict rule, and I break it occasionally if it makes the writing easier to understand. This is where reading comes in, someone who reads quite a bit can tell if a sentence "sounds right".
Use of commas is the trickiest of the basic rules, but one with a lot of potential to make really good writing. I am a heavy comma-user. When a sentence contains the word "and", it often means that there are two segments of information within that sentence and that is what commas are for. A comma separates segments of information, but is more permeable than a period (full-stop in Britain). A period ends a sentence, while a comma sub-divides it. It is not really good writing to have a lot of short sentences, it is better to have fewer sentences and to sub-divide them with commas.
Another use of commas is to facilitate an insertion into a sentence. Consider the following: "I stopped at the store, which had just opened, on my way to work". The portion "which had just opened" is a segment of information about the store which is separate from the meaning of the rest of the sentence. This is why it is separated by commas, one on each side of it. Making full use of commas is a step toward really good writing, one rule that must be remembered is to never have "commas within commas".
There must not be too many commas in writing. There may be a case where there are two points in a sentence that are close together, and where commas could possible be applicable. An example is: "I went to visit my brother and then to the store, but not with my brother". The portion about going to the store could possibly be separated by a comma, but this would be too close to the second comma. While commas are a powerful tool in writing, too many of them just make a mess and so it must be decided where a comma should best go, and not to put one in the other place.
Parenthesis fill the same role as commas, but are more divisive. Parenthesis are rarely used in non-technical writing, and usually only where one or two words must be inserted into a sentence. An example is where a person may be known by more than one name, so that one is given and the other follows in parenthesis.
One essential of good writing is the handling of the most important point or points of the article. I often put the most important sentence of the article, the one around which the entire article revolves, in a paragraph of it's own to emphasize it's importance. Also, the most important points should be repeated rather than stated just once.
Get the writing off to a good start. Do not just plunge into complex or technical information without a brief introduction, using a paragraph of maybe one or two sentences.
Suppose that you are writing an article that involves electrical charges. It is not necessary to write "electrical charges" every time, you can just write "charges". But still, not all readers may be familiar with the subject matter and it is best to periodically remind the reader that the charges are "electrical charges".
Some people believe that the best writing is that which can express the same idea in the least number of words. I do not completely agree with this because some repetition of the most important ideas is necessary to best convey the information in the article. But one way to trim writing is to eliminate unnecessary duplication of meaning. For example "a prosperous, well-to-do town" is such a duplication because "prosperous" and "well-to-do" mean the same thing.
Good writing makes use of different words that mean the same thing so that the same word is not used over and over again. The most common example is probably "but" and "however". This is where you can use a thesaurus, which lists words with the same meaning. But there are exceptions to this, in a complex article you can use the same word again and again if it helps to emphasize that certain points are related. Remember that, as always, writing is an art rather than an exact science.
A good writer is, of course, a good speller. I used to have some difficulty with words that have i and e together, in remembering whether the i or the e comes first. In my early writing efforts, I recall that if I was unsure whether a word should be capitalized I would rearrange the sentence so that it began with the word so then I knew that it would be capitalized (Those were the days before spell check technology).
Proper names are always capitalized. What is the difference between North America and north Africa? North America is the official name of a continent and is capitalized. But north Africa is only a general description of a region and is not the official name of a country or continent and so the "north" is not capitalized.
Another rule to remember is the "only one s rule". Consider "the trees grow" and "the forest grows". Both are similar in meaning, but if we use a plural, trees, then we do not put an s on "grows". Also, as you can see, quotation marks are a useful tool in creating expressive writing.
Be wary of excessive use of abbreviations. They can be used, but if the use is often then periodically remind the reader what it stands for. This is one of those occasions when it is necessary to remember that the reader may not be as familiar with the general subject matter as the writer.
My writing process in developing the postings on these blogs is to first look into a possible article in my mind in order to see if it is worth writing a posting about. One great thing about writing is that there is no such thing as wasted time, I can be stuck in traffic or standing in line and still be working on my writing. Then, if it is, I begin writing down on paper anything that I can think of that will be a part of the posting.
The next step is to organize what I have written down into a logical sequence. Unless the article is long, I do this by simply reviewing it and placing a number in front of each piece of material that I have written down and this is the order in which it will be written. If it may be some time before the article will be written, I save this organization until near the time when I am ready to write it because the organization process will then serve as a review prior to writing.
If quite a bit of material is involved, so that the article will be long, it is best to begin sub-dividing the material into logical sections or chapters as soon as is practical. This makes organization much easier.
I am a pre-planner when it comes to writing. By the time I get to the computer, most of the work is done. But this is not the only way to write. Some writers just start writing, and organize it as they go along.
The written word is far more reliable than the spoken word. The reason that I decided to start writing is that I once explained verbally to someone a scenario that I had developed about the fulfillment of the prophecies in the Bible of the last days of the world, and that person then told someone else. But when it was repeated back to me what I had supposedly said, it only very vaguely resembled the original scenario. I decided then that it was much better to write things down.
Friday, August 23, 2013
Why Civilization Began Where It Did
Have you ever wondered why civilization began where it did? The first place that we usually think of in regard to early civilization is the Middle East and eastward to the Indus Valley, in the eastern hemisphere, and southern Mexico to northwestern South America, in the western hemisphere.
The primary factor which moved humans from nomadic hunting and gathering to permanent communities is generally considered to be the development of agriculture. Someone probably noticed that if seeds are pulled off a plant and dropped on the ground, copies of the plant will later sprout there. This led to planting and harvesting and a settled community.
The development of agriculture is certainly not the only factor in bringing about civilization. The control of fire and learning to measure time, beyond the day, were other important factors. The word "historic" means written, prehistoric means before writing was developed and this was also a vital step in civilization.
But I think that the development of agriculture, planting and harvesting instead of foraging, can be considered as by far the most important step in the development of civilization.
(Note-Remember, once again, the amazing fact that we saw in "The Grass Hypothesis" on the creation blog. The whole reason that civilization exits is really that humans are unable to digest grass. If we could digest grass, like sheep or cattle, there would be essentially an abundance of food and no need for civilization to provide a steady supply of food).
The strange thing about the development of civilization is where it began. If civilization is based on agriculture, then why did it begin in some of the dryest and least hospitable areas to farming? I find that this leads us to a great untold story of human history, there is a major factor that is being left out.
I have just about always had an interest in archeology, particularly that of the Middle East. The reason that I have never written much about archeology here, with the exception of "Ancient Egypt And Hinduism" on the world and economics blog, is that I want this blog to only contain what is new, or at least a new way of looking at things, and I am not in a position to make new archeological discoveries in the Middle East.
But I think I have found a factor here, without going to the Middle East, that explains a lot about why civilization began where it did. That factor is the glaciers of the last ice age, which ended about 12,000 years ago.
An ice age begins when the temperature periodically gets cold enough so that the snow of one winter has not melted when the following winter begins. Snow begins to pile up year after year, decade after decade and, century after century. The weight of the snow above compresses that below into ice, and the landscape ends up covered by a vast sheet of ice that might be 2 km thick.
When an object is large enough, such as a vast sheet of ice, it is affected by the rotation of the earth. The force of this rotation pulls the glacial ice sheet toward the equator, at the same time the momentum of the earth's eastward rotation pulls the glacier somewhat eastward. Usually glacial ice covers about 10% of the earth's surface, during the ice ages this increases to about 30%.
One implication of this is that sea level would have to drop across the world simply because so much more water would be locked up in glaciers. In "Sea Levels During The Ice Ages" on the glacier blog, we saw how this would enable the movement of people to areas of land that would be otherwise inaccessible such as the migration of people from Asia to North America and to Japan.
What I want to point out about the movement of glaciers today is that they would have also forced people away from many areas of the earth's surface and into areas that were more free of glacial movement.
This explains why the Middle East, despite being dry and far from the best area for farming, is considered as "the cradle of civilization". There were mountain glaciers, which came down from the Zagros Mountains of Iran, that were beneficial to the region because they plowed up nutrients in the soil along the so-called Fertile Crescent, and the water from the melting of these mountain glaciers formed the beginning of the Tigris and Euphrates Rivers. But the area was free of the main glaciers, and this is why early civilization was to be found in such an apparently illogical place.
Northern Europe has fertile soil, a moderate climate and is well-watered. Yet civilization in Europe was first found in much hotter and drier Mediterranean lands. Once again, this is explained by glacial movement. There was far less glacial ice in the Mediterranean area, and this gave it a head start on civilization.
Archeologists can see the human history, but the glacial history is a part of the story too. Areas like northern Europe look ideal for farming today but the flora and fauna of a region may have taken thousands of years to fully recover from being covered by glacial ice.
We find exactly the same pattern in the western hemisphere. There are native Indians throughout North and South America. But there were three truly great civilizations to be found, and all were close together in the relatively limited area of southern Mexico, Central America and, northwestern South America.
These great Indian civilizations were the Aztec, the Maya and, the Inca. They were found, as we might expect, in those areas that were furthest from the encroachment of glacial ice during the ice ages. Mountains also produce smaller glaciers, and the Inca were among the Andes Mountains. But their settlements were mainly to the west of the Andes, and remember that the earth's eastward rotation tends to pull glaciers eastward so that the Inca would have been away from the path of glacial ice.
The ice ages, then, explain not only human settlement such a show the Indians got to the western hemisphere, but also why civilization began where it did. I have never seen this pointed out before, but it is where natural history meets human history.
The primary factor which moved humans from nomadic hunting and gathering to permanent communities is generally considered to be the development of agriculture. Someone probably noticed that if seeds are pulled off a plant and dropped on the ground, copies of the plant will later sprout there. This led to planting and harvesting and a settled community.
The development of agriculture is certainly not the only factor in bringing about civilization. The control of fire and learning to measure time, beyond the day, were other important factors. The word "historic" means written, prehistoric means before writing was developed and this was also a vital step in civilization.
But I think that the development of agriculture, planting and harvesting instead of foraging, can be considered as by far the most important step in the development of civilization.
(Note-Remember, once again, the amazing fact that we saw in "The Grass Hypothesis" on the creation blog. The whole reason that civilization exits is really that humans are unable to digest grass. If we could digest grass, like sheep or cattle, there would be essentially an abundance of food and no need for civilization to provide a steady supply of food).
The strange thing about the development of civilization is where it began. If civilization is based on agriculture, then why did it begin in some of the dryest and least hospitable areas to farming? I find that this leads us to a great untold story of human history, there is a major factor that is being left out.
I have just about always had an interest in archeology, particularly that of the Middle East. The reason that I have never written much about archeology here, with the exception of "Ancient Egypt And Hinduism" on the world and economics blog, is that I want this blog to only contain what is new, or at least a new way of looking at things, and I am not in a position to make new archeological discoveries in the Middle East.
But I think I have found a factor here, without going to the Middle East, that explains a lot about why civilization began where it did. That factor is the glaciers of the last ice age, which ended about 12,000 years ago.
An ice age begins when the temperature periodically gets cold enough so that the snow of one winter has not melted when the following winter begins. Snow begins to pile up year after year, decade after decade and, century after century. The weight of the snow above compresses that below into ice, and the landscape ends up covered by a vast sheet of ice that might be 2 km thick.
When an object is large enough, such as a vast sheet of ice, it is affected by the rotation of the earth. The force of this rotation pulls the glacial ice sheet toward the equator, at the same time the momentum of the earth's eastward rotation pulls the glacier somewhat eastward. Usually glacial ice covers about 10% of the earth's surface, during the ice ages this increases to about 30%.
One implication of this is that sea level would have to drop across the world simply because so much more water would be locked up in glaciers. In "Sea Levels During The Ice Ages" on the glacier blog, we saw how this would enable the movement of people to areas of land that would be otherwise inaccessible such as the migration of people from Asia to North America and to Japan.
What I want to point out about the movement of glaciers today is that they would have also forced people away from many areas of the earth's surface and into areas that were more free of glacial movement.
This explains why the Middle East, despite being dry and far from the best area for farming, is considered as "the cradle of civilization". There were mountain glaciers, which came down from the Zagros Mountains of Iran, that were beneficial to the region because they plowed up nutrients in the soil along the so-called Fertile Crescent, and the water from the melting of these mountain glaciers formed the beginning of the Tigris and Euphrates Rivers. But the area was free of the main glaciers, and this is why early civilization was to be found in such an apparently illogical place.
Northern Europe has fertile soil, a moderate climate and is well-watered. Yet civilization in Europe was first found in much hotter and drier Mediterranean lands. Once again, this is explained by glacial movement. There was far less glacial ice in the Mediterranean area, and this gave it a head start on civilization.
Archeologists can see the human history, but the glacial history is a part of the story too. Areas like northern Europe look ideal for farming today but the flora and fauna of a region may have taken thousands of years to fully recover from being covered by glacial ice.
We find exactly the same pattern in the western hemisphere. There are native Indians throughout North and South America. But there were three truly great civilizations to be found, and all were close together in the relatively limited area of southern Mexico, Central America and, northwestern South America.
These great Indian civilizations were the Aztec, the Maya and, the Inca. They were found, as we might expect, in those areas that were furthest from the encroachment of glacial ice during the ice ages. Mountains also produce smaller glaciers, and the Inca were among the Andes Mountains. But their settlements were mainly to the west of the Andes, and remember that the earth's eastward rotation tends to pull glaciers eastward so that the Inca would have been away from the path of glacial ice.
The ice ages, then, explain not only human settlement such a show the Indians got to the western hemisphere, but also why civilization began where it did. I have never seen this pointed out before, but it is where natural history meets human history.
Complexity Theory And Economics
The reason for all of the different economic systems that have arisen since the time of industrialization is explained by my complexity theory, as described on the patterns and complexity blog. This is not quite the same thing as in the posting on that blog, "The Complexity Theory Of Production And Economics", which points out that the complexity of the economics must necessarily match that of the production apparatus.
To understand something, we must construct a mental model of it. But this means that we are limited when it comes to understanding ourselves because we would have to be "smarter than ourselves" to be able to contain a complete mental model of ourselves, which is impossible.
This obvious fact that we cannot be "smarter than ourselves" has a number of ramifications that have been described on the patterns and complexity blog. For one thing, we cannot readily quantify complexity itself. I pointed out the tremendous advantages that this would bring us in "The Quantification of Complexity".
For another thing, the limitation that we cannot be "smarter than ourselves" means that while we can break physics down into formulae, we cannot do that with human behavior (behaviour). This does not mean that there are no formulae that describe and predict all that humans do, it is just that we cannot arrive at these formulae because we cannot be "smarter than ourselves" in the way that would be necessary for us to break ourselves down in the same way as with physics.
If this could be done, sports would no longer make sense because the actions of each player could be described in advance by formula and it would be completely unnecessary to hold the sports event to see which team would win. There is a formula for all that each person does, as well as the entire world, but we cannot be "smarter than ourselves" to arrive at it.
The words that we use are complex, but they are not infinitely complex. This means that out there somewhere is a way to express words in the same way as numbers so that we would not need a dictionary to know what a word means any more than we need a dictionary to tell us what a number means. The trouble is that words, with all of their nuances and subjectivity, are a reflection of our complexity, meaning that we cannot break words down into a formula or express them in a logical sequence like numbers because, once again, we cannot be "smarter than ourselves".
Another way that we are up against our own complexity is in studying. We learn more and more as time goes on, so why does studying what we need to know not get easier? It is because we are learning more that studying what is known never gets easy, even though we are learning more that is balanced by the fact that more is being learned.
Now, back to economics. The sum of all economic transactions is much like words in that it is a reflection of our own complexity. When we look at economics, we are looking at ourselves. So to completely build a mental model of all of it's complexity, we would have to be "smarter than ourselves" which is impossible.
Economics is a vast reflection of ourselves, and it is much easier to simplify it by looking at either one side or the other. This is what brings systems such as capitalism and communism into being. These are the two opposite sides of the total economic picture. Both must have valid points or they would not have attracted so many adherents. Yet, both have been shown to have very serious flaws. The flaws in one creates believers in the other so that economic history has tended to zig-zag from one to the other.
Industrial era economics began with capitalism. People had to start the industries which would produce wealth, but could not be expected to do this if they would not then be the owners of that wealth. But capitalism, at least in it's more extreme forms, is unsustainable. Factories will pay their workers as little as possible, in order to maximize profit, but that will leave too few people with enough money to buy the goods and services that are being produced.
Communism began as a reaction to extreme capitalism. Karl Marx, a German Jew in exile in London, put together the theory in the reading room at the British Museum. The theories of Marx were intended for Britain, but communism never gained significant numbers of followers there. The knock against communism is simply that, while it does not have the unsustainable concentration of wealth that capitalism does, it destroys the incentive that is necessary for people to work hard. Why should a business person put forth his best effort to create wealth every day if he is only going to have to share the wealth with everybody else?
Capitalism and communism each represents one side of the complete economic picture. To see the full picture of economics would be to encompass both capitalism and communism into a middle ground to get the best of both and the worst of neither. Both sides did move away from extremes, and toward the economic center, as time went on and experience was gained with industrial-era economics.
I see economics as ultimately coming down to freedom. There are two slants to freedom-"freedom to" and "freedom from". A simple example that I use for illustration is smoking. Should people have "freedom to" smoke, or should they have "freedom from" second-hand smoke?
The truth is that people, being complex, are both competitive and self-interested as well as communal. "Freedom to" represents capitalism, while "freedom from" represents communism. Both are a fundamental part of human nature, and both must be accommodated by an effective economic system. The solution is the middle ground of mild socialism, halfway between capitalism and communism.
There will be maximum economic activity when the available wealth is shared equally between the people. But, on the other hand, equal distribution of wealth will destroy incentive. The purpose of an economic system is to find the best balance of these two facts by seeing the total economic picture, even though it is more complex and thus more difficult, than only seeing either capitalism or communism.
To understand something, we must construct a mental model of it. But this means that we are limited when it comes to understanding ourselves because we would have to be "smarter than ourselves" to be able to contain a complete mental model of ourselves, which is impossible.
This obvious fact that we cannot be "smarter than ourselves" has a number of ramifications that have been described on the patterns and complexity blog. For one thing, we cannot readily quantify complexity itself. I pointed out the tremendous advantages that this would bring us in "The Quantification of Complexity".
For another thing, the limitation that we cannot be "smarter than ourselves" means that while we can break physics down into formulae, we cannot do that with human behavior (behaviour). This does not mean that there are no formulae that describe and predict all that humans do, it is just that we cannot arrive at these formulae because we cannot be "smarter than ourselves" in the way that would be necessary for us to break ourselves down in the same way as with physics.
If this could be done, sports would no longer make sense because the actions of each player could be described in advance by formula and it would be completely unnecessary to hold the sports event to see which team would win. There is a formula for all that each person does, as well as the entire world, but we cannot be "smarter than ourselves" to arrive at it.
The words that we use are complex, but they are not infinitely complex. This means that out there somewhere is a way to express words in the same way as numbers so that we would not need a dictionary to know what a word means any more than we need a dictionary to tell us what a number means. The trouble is that words, with all of their nuances and subjectivity, are a reflection of our complexity, meaning that we cannot break words down into a formula or express them in a logical sequence like numbers because, once again, we cannot be "smarter than ourselves".
Another way that we are up against our own complexity is in studying. We learn more and more as time goes on, so why does studying what we need to know not get easier? It is because we are learning more that studying what is known never gets easy, even though we are learning more that is balanced by the fact that more is being learned.
Now, back to economics. The sum of all economic transactions is much like words in that it is a reflection of our own complexity. When we look at economics, we are looking at ourselves. So to completely build a mental model of all of it's complexity, we would have to be "smarter than ourselves" which is impossible.
Economics is a vast reflection of ourselves, and it is much easier to simplify it by looking at either one side or the other. This is what brings systems such as capitalism and communism into being. These are the two opposite sides of the total economic picture. Both must have valid points or they would not have attracted so many adherents. Yet, both have been shown to have very serious flaws. The flaws in one creates believers in the other so that economic history has tended to zig-zag from one to the other.
Industrial era economics began with capitalism. People had to start the industries which would produce wealth, but could not be expected to do this if they would not then be the owners of that wealth. But capitalism, at least in it's more extreme forms, is unsustainable. Factories will pay their workers as little as possible, in order to maximize profit, but that will leave too few people with enough money to buy the goods and services that are being produced.
Communism began as a reaction to extreme capitalism. Karl Marx, a German Jew in exile in London, put together the theory in the reading room at the British Museum. The theories of Marx were intended for Britain, but communism never gained significant numbers of followers there. The knock against communism is simply that, while it does not have the unsustainable concentration of wealth that capitalism does, it destroys the incentive that is necessary for people to work hard. Why should a business person put forth his best effort to create wealth every day if he is only going to have to share the wealth with everybody else?
Capitalism and communism each represents one side of the complete economic picture. To see the full picture of economics would be to encompass both capitalism and communism into a middle ground to get the best of both and the worst of neither. Both sides did move away from extremes, and toward the economic center, as time went on and experience was gained with industrial-era economics.
I see economics as ultimately coming down to freedom. There are two slants to freedom-"freedom to" and "freedom from". A simple example that I use for illustration is smoking. Should people have "freedom to" smoke, or should they have "freedom from" second-hand smoke?
The truth is that people, being complex, are both competitive and self-interested as well as communal. "Freedom to" represents capitalism, while "freedom from" represents communism. Both are a fundamental part of human nature, and both must be accommodated by an effective economic system. The solution is the middle ground of mild socialism, halfway between capitalism and communism.
There will be maximum economic activity when the available wealth is shared equally between the people. But, on the other hand, equal distribution of wealth will destroy incentive. The purpose of an economic system is to find the best balance of these two facts by seeing the total economic picture, even though it is more complex and thus more difficult, than only seeing either capitalism or communism.
The Big Project Syndrome
There has been so much negativity in the news recently about the city of Niagara Falls, New York. This is the city on the American side of Niagara Falls, there is another city by the same name on the Canadian side. But all of the articles seem to just rehash what we already know. The city is struggling economically, to put it mildly. I would like to actually explain the workings of what has happened to Niagara Falls, NY, in a way that I have never seen it explained.
Yet, this is not a local issue at all and it is not necessary to be familiar with the area to understand it. Niagara Falls, NY suffers from what I have termed "The Big Project Syndrome". This is what takes place over time when a city is host to a major project of some type. The city may greatly benefit from the project. Indeed, it may even be the reason for it's existence. But as time goes on, and economic conditions change, both the thinking and the geography of the city are warped by the big project so that it ends up worse off in the long run.
I am going to use Niagara Falls, NY as a case study in the Big Project Syndrome, but it's lessons will apply to many cities across the world.
Here is a map link, which includes satellite imagery, that you may find helpful: www.maps.google.com .
Niagara Falls, NY occupies a very strategic location because of it's namesake waterfall. It's importance began with what is known as the Portage. This was a route by which things had to be carried from boats in the upper Great Lakes to boats in Lake Ontario, which linked to the Atlantic Ocean. The obvious reason for this is the fact that boats could not go over the falls. The legacy of this is that there are streets named Portage Road today on both sides of the river.
The flow of water was first used to generate power on a large scale, for milling operations, with a hydraulic canal across the downtown of what is now Niagara Falls, NY. Water would flow along the canal, from the upper river (above the falls), drop down a wheel pit with a turbine at the bottom which would be turned by the kinetic energy of the falling water, and then flow out of a shaft to empty into the lower river (below the falls). A lot of mills had operations along this canal.
Next came the generation of electricity by using the force of the falling water. The Adams Power Station (there are articles and photographs online) was a historic use of water to generate large amounts of electricity, using a generator at the bottom of a wheel pit.
After this came the Schoellkopf Power Station, which was constructed at the bottom of the gorge, alongside the lower river. There were actually three separate stations. There is a similar power plant today on the Canadian side of the river, just below the falls. The Schoellkopf Station was further downstream.
It was this Schoellkopf Power Station that really brought industry to Niagara Falls, NY, with abundant and inexpensive electricity. Many industries relied on electricity for their operation, particularly for refining aluminum. Unlike other common metals, aluminum cannot be separated from it's ore by smelting but requires electrolysis. Along the way it was discovered that sand and coke can be fused together by extreme heat to make an inexpensive but effective abrasive, and the name of Carborundum became one of the industrial names associated with Niagara Falls, NY.
On the Canadian side of Niagara Falls, the abundance of electricity brought the vast Cyanamid factory that used to stand just north of Hamilton Street, with another factory of the same name on the other side of town.
Niagara Falls not only revolutionized industry, but also bridge construction. The original Honeymoon Bridge was torn from it's foundations by icebergs in 1938, but the area hosts some of the finest examples in the world of steel arch bridges spanning the river.
Not only was there all of the industry, drawn by the inexpensive electricity, but visitors came from all over the world to see the falls.
It was just a place that spawned fantastic plans. A man named William Love began a canal which was to run from the upper river, well upstream from the falls, to the Niagara Escarpment to the north where it would generate the power for what would be known as Model City.
A vivid example of the visions of the future and the grand plans of Niagara can be seen in the now-closed Summit Park Mall, just east of the city limits of Niagara Falls, NY. What city would have a shopping mall built on what was essentially a country road? This could only happen in a city with nearly unlimited faith in it's ecoomic future.
But times began to change. In 1956, a massive rock slide destroyed the Schoellkopf Power Station. The wall of the gorge which collpased was almost certainly weakened by the wheel pits and tunnels along the hydraulic canal years before. The grandest project of all was constructed to replace it, the Robert Moses Power Plant, but now electricity was more expensive and was also not of the same frequency of alternating current as before. As the rest of the world developed, wages were much lower in other countries and factory work could be done with less cost there. The factories that had been the backbone of the Niagara economy began to leave or drastically reduce the local workforce.
This began the present dilemma of Niagara Falls, NY. People began to leave also, and today the city has only about half of the population that it had in 1960.
I find that industry has not left, it has only changed in form. Instead of massive industries employing hundreds, or even thousands of workers, there are smaller specialized industries employing far fewer workers, but with a higher skill level. These smaller industries of the new economy tend to cluster together in industrial parks for ease of delivery. It is as if industry has moved from the age of massive dinosaurs to the age of smaller, but more intelligent, mammals.
To understand Niagara Falls, NY, and other cities suffering from the Big Project Syndrome, it is necessary to understand what is known as the "paradox of plenty", also known as the resource curse. There are articles about it online. This is the phenomenon in which the countries that are blessed with the greatest natural wealth are paradoxically the ones where the average person is likely to be worse off than those in countries with much less natural wealth.
The paradox of plenty comes down to human nature. When a country does not have natural resources, it also has nothing to be corrupt with. The great natural wealth often ends up enriching only a few people, or used by a corrupt government to keep itself in power. A country without such natural wealth is more dependent on the will of it's citizens to remain in power, and so is more likely to be a democracy. It must also make the most of the skills of it's people so that it ends up better off in the long term. (See "the Language Paradox, on the world and economics blog, to see my impression of how this relates to language also).
The paradox of plenty applies to cities as well. Niagara Falls, NY was blessed with the possibility of generating inexpensive electricity and otherwise making use of water power. But now the thinking is stuck in this big project mentality. It does not grasp the new economy of modern industrial parks with smaller, but higher skill, industries.
What Niagara Falls, NY sorely needs is something like the Audobon Industrial Park, that can be seen some distance away in the Buffalo suburb of Amherst. Instead, Niagara Falls, NY keeps thinking in terms of big projects while looking for something to turn the city around.
First, there was the massive convention center downtown. It was an arc of concrete, appearing as if it was an engineering sibling of the Robert Moses Power Project, as was the Earl Brydges Library. In the 1980s, there were plans for a "mega-mall" in downtown Niagara Falls, NY. Then there was the casino.
In the Little Italy project of Pine Avenue, there is nothing in itself wrong with this idea but the same thought patterns can be seen at work. Just as water once flowed through the hydraulic canal to generate milling power, just as water flowed through the penstocks of the Robert Moses Power Plant to generate electricity, so visitors will flow between the arches of Little Italy to generate wealth.
This is related to two other postings on the world and economics blog. In "The Inverse Geographic Prosperity Principle", we saw that there are natural places in North America where we would expect to find cities, but the ones that we can be sure are prosperous are actually the ones where we would not usually expect to find a city, or at least such a major city. In "The Cardinal Rule Of Military Strategy" I explained how when a nation has won a great military victory, it cannot help trying to replicate that victory in later combat and this provides a clue as to what to expect from it's military strategy. Niagara Falls, NY just cannot help trying to replicate it's glory days of massive projects.
The city did handle projects like a new water plant and a new police station. But, once again, these are big projects. The industries of the new economy are still missing.
Promoting Niagara Falls, NY is not really the answer. It is already a world-famous name. There are many stores and shops in the city and the adjoining Town of Niagara, as well as a nice mall. But most of these businesses are owned from elsewhere. These stores attract great number of Canadian shoppers, from across the river, but the bulk of the money that they spend does not stay. After paying out wages and taxes, the rest of the money goes to the distant corporate headquarters of these stores and restaurants.
An economy of stores is unsustainable. At some point, we must actually make something to generate wealth. The casinos in the area only redistribute wealth, by taking it from somewhere else. Las Vegas is based on casinos by tapping into the heritage of the American west as a place where prospectors went looking for gold. But the heritage of Niagara Falls is industry, we should be making things here but are still stuck in the big-project mentality of what we can call the dinosaur era of industry and have failed to grasp the new economy of modern industrial parks with smaller but higher-skill level industries.
Just outside the city limits of Niagara Falls, NY, there are a few of such smaller modern industries. But in all of Niagara County there is very little of this modern industrial economy. There is just something about the name "Niagara" and big project thinking.
Lockport, NY is the city in the middle of Niagara County. It also displays signs of the Big Project Syndrome. Lockport is where the Erie Canal climbed the Niagara Escarpment by way of locks, hence the name of the city. It's economy is largely based on big industry, just as that of Niagara Falls was. The major employer is the Delphi auto parts factory, and there is also a newer facility of Yahoo!
This does represent the new economy well, better than nearby Niagara Falls. But for a city to base it's economic future on one or two major industries is maybe not the best of ideas. Middleport, the town at the eastern end of Niagara County, really suffered a few years ago with the closing of it's major industrial employer. Isn't it better to have an industrial park with 30 or 40 separate modern industries?
In the midst of all this gloom, sorrounding communities that are far less well-known than Niagara Falls are doing much better.
Niagara Falls, Canada is also afflicted by the Big Project Syndrome, to some extent as the observation towers near the falls attest. But the Canadian side of Niagara Falls has adapted much better to the new economy. The Cyanamid factory is long gone but all along the Queen Elizabeth Way, The QEW which runs north to south across the city, there is the industrial park that represents the new economy and is the economic backbone of the city. It may be that since the electric power projects on the Canadian side are much older than the Robert Moses Plant on the American side, the Big Project Syndrome on this side is further in the past and this has made adapting to the new economy somewhat easier.
On Grand Island, just south of Niagara Falls, NY, we see examples of the same type of modern industrial economy along the I-190 highway that crosses the island. The same along the I-290 across the northern Buffalo suburb of Tonawanda. In fact, the new industrial economy can be seen all around the suburbs of Buffalo in the satellite imagery on the map link, particularly the Audobon Industrial Park in Amherst, mentioned above. This is what is lacking in Niagara Falls, NY, which cannot break free of this big project mentality.
North Tonawanda, in Niagara County just east of Niagara Falls, also has an industrial heritage. Yet, it has managed to adapt to the new economy. This city does not seem to have a concentrated industrial park, but has small modern industries scattered around the city particularly on Tonawanda Island and in the Wurlitzer area and Erie Avenue.
The first part of the Big Project Syndrome is the thinking. The second part is the geography. It does not make sense to put an industrial park in a prime shopping or tourist area, and that leaves a city like Niagara Falls with nowhere to put one, at least where it would pay taxes to the city. Workers in the new economy want to live near their jobs, but in homes that suit their income level.
One of my most important ecoomic postings is "The Property Order". A primary reason for the tendency over recent decades to move to the southwestern U.S. is not just for the sun, but for a chance to start the property order over.
The City of Buffalo is also struggling economically, although not as badly as Niagara Falls. Ctities usually lack the space for a modern industrial park and tend to try to revitalize old buildings into the new economy and that is what Buffalo has done with the Larkin Buildings, a former soap company that did not survive the economic depression of the 1930s.
The past industrial era, and the generation of electricity, has left Niagara Falls, NY with essentially nowhere to put a modern industrial park such as the city needs. Much of the space formerly occupied by large industries has a certain level of contamination, so-called brownfields. Other seemingly open space has electric power lines overhead from all of the electricity that is generated. A large area along the I-190 highway, that would have been ideal for an industrial park, is occupied by a landfill. Then there is the contaminated area of the Love Canal, formed when William Love's old and abandoned canal was used to bury dangerous chemicals, that surfaced decades later.
With inexpensive electricity and numerous visitors, Niagara Falls, NY did not see the changes coming. Space that was not taken up by the large industry that could not last was taken up by the stores for the visitors to spend money in and is now inavailable for a modern industrial park. But neighboring North Tonawanda has managed to get it's share of the new industry without such a concentrated park either.
Yet, this is not a local issue at all and it is not necessary to be familiar with the area to understand it. Niagara Falls, NY suffers from what I have termed "The Big Project Syndrome". This is what takes place over time when a city is host to a major project of some type. The city may greatly benefit from the project. Indeed, it may even be the reason for it's existence. But as time goes on, and economic conditions change, both the thinking and the geography of the city are warped by the big project so that it ends up worse off in the long run.
I am going to use Niagara Falls, NY as a case study in the Big Project Syndrome, but it's lessons will apply to many cities across the world.
Here is a map link, which includes satellite imagery, that you may find helpful: www.maps.google.com .
Niagara Falls, NY occupies a very strategic location because of it's namesake waterfall. It's importance began with what is known as the Portage. This was a route by which things had to be carried from boats in the upper Great Lakes to boats in Lake Ontario, which linked to the Atlantic Ocean. The obvious reason for this is the fact that boats could not go over the falls. The legacy of this is that there are streets named Portage Road today on both sides of the river.
The flow of water was first used to generate power on a large scale, for milling operations, with a hydraulic canal across the downtown of what is now Niagara Falls, NY. Water would flow along the canal, from the upper river (above the falls), drop down a wheel pit with a turbine at the bottom which would be turned by the kinetic energy of the falling water, and then flow out of a shaft to empty into the lower river (below the falls). A lot of mills had operations along this canal.
Next came the generation of electricity by using the force of the falling water. The Adams Power Station (there are articles and photographs online) was a historic use of water to generate large amounts of electricity, using a generator at the bottom of a wheel pit.
After this came the Schoellkopf Power Station, which was constructed at the bottom of the gorge, alongside the lower river. There were actually three separate stations. There is a similar power plant today on the Canadian side of the river, just below the falls. The Schoellkopf Station was further downstream.
It was this Schoellkopf Power Station that really brought industry to Niagara Falls, NY, with abundant and inexpensive electricity. Many industries relied on electricity for their operation, particularly for refining aluminum. Unlike other common metals, aluminum cannot be separated from it's ore by smelting but requires electrolysis. Along the way it was discovered that sand and coke can be fused together by extreme heat to make an inexpensive but effective abrasive, and the name of Carborundum became one of the industrial names associated with Niagara Falls, NY.
On the Canadian side of Niagara Falls, the abundance of electricity brought the vast Cyanamid factory that used to stand just north of Hamilton Street, with another factory of the same name on the other side of town.
Niagara Falls not only revolutionized industry, but also bridge construction. The original Honeymoon Bridge was torn from it's foundations by icebergs in 1938, but the area hosts some of the finest examples in the world of steel arch bridges spanning the river.
Not only was there all of the industry, drawn by the inexpensive electricity, but visitors came from all over the world to see the falls.
It was just a place that spawned fantastic plans. A man named William Love began a canal which was to run from the upper river, well upstream from the falls, to the Niagara Escarpment to the north where it would generate the power for what would be known as Model City.
A vivid example of the visions of the future and the grand plans of Niagara can be seen in the now-closed Summit Park Mall, just east of the city limits of Niagara Falls, NY. What city would have a shopping mall built on what was essentially a country road? This could only happen in a city with nearly unlimited faith in it's ecoomic future.
But times began to change. In 1956, a massive rock slide destroyed the Schoellkopf Power Station. The wall of the gorge which collpased was almost certainly weakened by the wheel pits and tunnels along the hydraulic canal years before. The grandest project of all was constructed to replace it, the Robert Moses Power Plant, but now electricity was more expensive and was also not of the same frequency of alternating current as before. As the rest of the world developed, wages were much lower in other countries and factory work could be done with less cost there. The factories that had been the backbone of the Niagara economy began to leave or drastically reduce the local workforce.
This began the present dilemma of Niagara Falls, NY. People began to leave also, and today the city has only about half of the population that it had in 1960.
I find that industry has not left, it has only changed in form. Instead of massive industries employing hundreds, or even thousands of workers, there are smaller specialized industries employing far fewer workers, but with a higher skill level. These smaller industries of the new economy tend to cluster together in industrial parks for ease of delivery. It is as if industry has moved from the age of massive dinosaurs to the age of smaller, but more intelligent, mammals.
To understand Niagara Falls, NY, and other cities suffering from the Big Project Syndrome, it is necessary to understand what is known as the "paradox of plenty", also known as the resource curse. There are articles about it online. This is the phenomenon in which the countries that are blessed with the greatest natural wealth are paradoxically the ones where the average person is likely to be worse off than those in countries with much less natural wealth.
The paradox of plenty comes down to human nature. When a country does not have natural resources, it also has nothing to be corrupt with. The great natural wealth often ends up enriching only a few people, or used by a corrupt government to keep itself in power. A country without such natural wealth is more dependent on the will of it's citizens to remain in power, and so is more likely to be a democracy. It must also make the most of the skills of it's people so that it ends up better off in the long term. (See "the Language Paradox, on the world and economics blog, to see my impression of how this relates to language also).
The paradox of plenty applies to cities as well. Niagara Falls, NY was blessed with the possibility of generating inexpensive electricity and otherwise making use of water power. But now the thinking is stuck in this big project mentality. It does not grasp the new economy of modern industrial parks with smaller, but higher skill, industries.
What Niagara Falls, NY sorely needs is something like the Audobon Industrial Park, that can be seen some distance away in the Buffalo suburb of Amherst. Instead, Niagara Falls, NY keeps thinking in terms of big projects while looking for something to turn the city around.
First, there was the massive convention center downtown. It was an arc of concrete, appearing as if it was an engineering sibling of the Robert Moses Power Project, as was the Earl Brydges Library. In the 1980s, there were plans for a "mega-mall" in downtown Niagara Falls, NY. Then there was the casino.
In the Little Italy project of Pine Avenue, there is nothing in itself wrong with this idea but the same thought patterns can be seen at work. Just as water once flowed through the hydraulic canal to generate milling power, just as water flowed through the penstocks of the Robert Moses Power Plant to generate electricity, so visitors will flow between the arches of Little Italy to generate wealth.
This is related to two other postings on the world and economics blog. In "The Inverse Geographic Prosperity Principle", we saw that there are natural places in North America where we would expect to find cities, but the ones that we can be sure are prosperous are actually the ones where we would not usually expect to find a city, or at least such a major city. In "The Cardinal Rule Of Military Strategy" I explained how when a nation has won a great military victory, it cannot help trying to replicate that victory in later combat and this provides a clue as to what to expect from it's military strategy. Niagara Falls, NY just cannot help trying to replicate it's glory days of massive projects.
The city did handle projects like a new water plant and a new police station. But, once again, these are big projects. The industries of the new economy are still missing.
Promoting Niagara Falls, NY is not really the answer. It is already a world-famous name. There are many stores and shops in the city and the adjoining Town of Niagara, as well as a nice mall. But most of these businesses are owned from elsewhere. These stores attract great number of Canadian shoppers, from across the river, but the bulk of the money that they spend does not stay. After paying out wages and taxes, the rest of the money goes to the distant corporate headquarters of these stores and restaurants.
An economy of stores is unsustainable. At some point, we must actually make something to generate wealth. The casinos in the area only redistribute wealth, by taking it from somewhere else. Las Vegas is based on casinos by tapping into the heritage of the American west as a place where prospectors went looking for gold. But the heritage of Niagara Falls is industry, we should be making things here but are still stuck in the big-project mentality of what we can call the dinosaur era of industry and have failed to grasp the new economy of modern industrial parks with smaller but higher-skill level industries.
Just outside the city limits of Niagara Falls, NY, there are a few of such smaller modern industries. But in all of Niagara County there is very little of this modern industrial economy. There is just something about the name "Niagara" and big project thinking.
Lockport, NY is the city in the middle of Niagara County. It also displays signs of the Big Project Syndrome. Lockport is where the Erie Canal climbed the Niagara Escarpment by way of locks, hence the name of the city. It's economy is largely based on big industry, just as that of Niagara Falls was. The major employer is the Delphi auto parts factory, and there is also a newer facility of Yahoo!
This does represent the new economy well, better than nearby Niagara Falls. But for a city to base it's economic future on one or two major industries is maybe not the best of ideas. Middleport, the town at the eastern end of Niagara County, really suffered a few years ago with the closing of it's major industrial employer. Isn't it better to have an industrial park with 30 or 40 separate modern industries?
In the midst of all this gloom, sorrounding communities that are far less well-known than Niagara Falls are doing much better.
Niagara Falls, Canada is also afflicted by the Big Project Syndrome, to some extent as the observation towers near the falls attest. But the Canadian side of Niagara Falls has adapted much better to the new economy. The Cyanamid factory is long gone but all along the Queen Elizabeth Way, The QEW which runs north to south across the city, there is the industrial park that represents the new economy and is the economic backbone of the city. It may be that since the electric power projects on the Canadian side are much older than the Robert Moses Plant on the American side, the Big Project Syndrome on this side is further in the past and this has made adapting to the new economy somewhat easier.
On Grand Island, just south of Niagara Falls, NY, we see examples of the same type of modern industrial economy along the I-190 highway that crosses the island. The same along the I-290 across the northern Buffalo suburb of Tonawanda. In fact, the new industrial economy can be seen all around the suburbs of Buffalo in the satellite imagery on the map link, particularly the Audobon Industrial Park in Amherst, mentioned above. This is what is lacking in Niagara Falls, NY, which cannot break free of this big project mentality.
North Tonawanda, in Niagara County just east of Niagara Falls, also has an industrial heritage. Yet, it has managed to adapt to the new economy. This city does not seem to have a concentrated industrial park, but has small modern industries scattered around the city particularly on Tonawanda Island and in the Wurlitzer area and Erie Avenue.
The first part of the Big Project Syndrome is the thinking. The second part is the geography. It does not make sense to put an industrial park in a prime shopping or tourist area, and that leaves a city like Niagara Falls with nowhere to put one, at least where it would pay taxes to the city. Workers in the new economy want to live near their jobs, but in homes that suit their income level.
One of my most important ecoomic postings is "The Property Order". A primary reason for the tendency over recent decades to move to the southwestern U.S. is not just for the sun, but for a chance to start the property order over.
The City of Buffalo is also struggling economically, although not as badly as Niagara Falls. Ctities usually lack the space for a modern industrial park and tend to try to revitalize old buildings into the new economy and that is what Buffalo has done with the Larkin Buildings, a former soap company that did not survive the economic depression of the 1930s.
The past industrial era, and the generation of electricity, has left Niagara Falls, NY with essentially nowhere to put a modern industrial park such as the city needs. Much of the space formerly occupied by large industries has a certain level of contamination, so-called brownfields. Other seemingly open space has electric power lines overhead from all of the electricity that is generated. A large area along the I-190 highway, that would have been ideal for an industrial park, is occupied by a landfill. Then there is the contaminated area of the Love Canal, formed when William Love's old and abandoned canal was used to bury dangerous chemicals, that surfaced decades later.
With inexpensive electricity and numerous visitors, Niagara Falls, NY did not see the changes coming. Space that was not taken up by the large industry that could not last was taken up by the stores for the visitors to spend money in and is now inavailable for a modern industrial park. But neighboring North Tonawanda has managed to get it's share of the new industry without such a concentrated park either.
Margaret Thatcher In Perspective
My opinion is that Margaret Thatcher was a product of the time and situation during which she became British Prime Minister.
During the summer of 1978, I was on my first return visit to my native England just after completing high school in the U.S. I seem to remember a blond woman in the news one day criticizing the present government of Britain. I did not know who she was and did not pay much attention. The following year, she was in the news again. Her name was Margaret Thatcher and she had just become prime minister of Britain.
I am no conservative when it comes to economics, as Thatcher was, but I do have some understanding of the highly controversial policies that she put into place if we consider the context.
The winter of 1978-79 was known as "The Winter of Discontent" in Britain. The economically liberal Callaghan government had gone on a spending spree. The result was a notorious strike-inflation spiral. Inflation was completely out of control, it would reach a dangerous nearly 14% in 1979. Workers in one industry would see workers in another industry getting pay raises by going on strike, and so they would strike too, all of which was fueling the spiral of inflation.
Thatcher won election in 1979 and purposely induced a recession because that was the only way to stop inflation. Nearly two years later, Ronald Reagan would take office in the U.S. and follow a similar course. The recession of the early 1980s was nasty in both countries, but it did succeed in stopping inflation and I agree with what they did. They simply had no choice, going too far left is as bad as going too far right.
It is said that if one list could be made of the most loved people ever, and another of the most hated, there would be many of the same people on both lists. There are few better examples of this than Margaret Thatcher. She knew how to handle inflation, but the resulting recession was really painful. Maybe there would be better memories of her if that had not been necessary, but that is not her fault. She is seen as a divisive figure, but once again that is due to the times and the fact of how far apart Britain's two main parties are.
I was in Britain only once during her 1979-1990 tenure, for a three week visit, but I did follow what was happening from a distance. I also have to agree with her taking on the coal miner's union. We cannot keep coal pits open when they are nearly mined out, and no longer profitable, just to preserve jobs.
I see Margaret Thatcher, and her U.S. counterpart Ronald Reagan, as well as to some extent the Canadian counterpart Brian Mulroney, as not only necessary products of their times, but also as half of the big picture of economics.
The left and the right, which we would call capitalism and communism in their more extreme forms, bring one another into existence because each is only half of the picture. This is because when one exists the other must also exist, on the opposite side, to restore the true economic balance. Put simply, economics is complex but most people are relatively simple so that we tend to see only part of the big picture. My view is that an economic system that is either well to the right, or well to the left, will be ultimately unsustainable because each is only half of the picture. The system will bounce back and forth from one side to the other in an effort to achieve sustainable balance.
Economics is a manifestation of freedom. My doctrine is that there are two slants to freedom, "freedom to" and "freedom from". The simplest example that I can think of is smoking. Should people have "freedom to" smoke, or should they have "freedom from" second-hand smoke. In the economic manifestation, the conservative right represents "freedom to", while the liberal left represents "freedom from".
The right wants people to have freedom to do all that they can to earn as much money as they are able to, and to spend it as they see fit. The right points out that taxing and spending by the government tends to result in destructive inflation. The left wants people to be able to earn money, but since money inevitably equals power they do not want a few wealthy people to use their power to set everything up to suit themselves so that the rich get richer and the poor get poorer, as tends to happen with capitalism. The left points out that when the rich take too much wealth for themselves, it does not leave enough money in circulation to buy all of the goods and services that are being produced in the economy, so that companies begin cutting back on production and a recessionary spiral gets under way.
My view is that an economic system must accommodate the entire freedom spectrum from "freedom to" to "freedom from". It can either do it by bouncing back and forth from right to left so that the two ultimately balance each other, or it can do it by the much more smoother and efficient method of setting a middle course to begin with. Capitalism and communism both have valid points, but also serious flaws, and the goal should be to set a middle course with the best of both and the worst of neither.
I am a dual national of the U.S. and Britain, although I have spent vastly more time in the U.S. It is from Britain that I draw the lesson of going too far left, and it is from the U.S. that I draw the lesson of going too far right. The U.S. economic crashes of 1929, 1987 and, 2008 were caused by the wealthy taking too much money out of the system so that there was not enough consumer spending to buy all of the goods and services being produced.
This is the context in which Margaret Thatcher must be understood. Reagan and Thatcher were too far right, but they had to be because the governments before them, Carter and Callaghan, were too far left. It would be much better just to set a balanced course from the beginning, but most people can only see one side or the other and not the whole picture.
What both Thatcher and Reagan did wrong was not to steer to the right at the beginning of the 1980s, they had little choice but to induce the recession because there was no other way to stop inflation. What they both did wrong is to stay with their conservative economic policies after this objective had been accomplished. They both should have steered toward the center, but they didn't. The result was the 1987 economic crash in America and Thatcher being removed by her own party after her attempt to organize Britain's tax system so that everyone, rich and not-so-rich, would pay just one flat tax.
(By the way, in a parliamentary democracy it is the party which rules and not the prime minister. If a prime minister becomes too unpopular, the party can simply replace him or her with someone else and continue to govern. This is what happened to Thatcher in 1990, and to Brian Mulroney in Canada. In the presidential system, in contrast, the president rules rather than the party and cannot be readily removed until his term is up).
Why was Thatcher so determined and uncompromising? My explanation is simple. Remember in my economic writings how we saw how people are designed to believe in something and when a person may not have really grasped the true religion, their nation or ideology or politics takes the place of religion. I do not know what Margaret Thatcher's religious convictions were, but she was the daughter of a Methodist minister and so would have been very familiar with Christianity. She saw herself as the saviour (savior) of Britain against the falseness of socialism and the diabolical Labour Party. It became very much a religious crusade, in which any kind of compromise would be completely unacceptable.
Another factor was warfare. For centuries, Britain had been in some kind of conflict at least every generation or so. But then along came the 1980s. The nation's collective psyche told it that it was time for another of the periodic battles of history. But, after the Falklands crisis of 1982, there was no significant foreign enemy to be found. So, the country turned inward and reenacted it's own civil war of long ago in the form of the Labour Party and socialism versus Thatcher.
Managing a modern economy does not require an iron will. It requires flexibility and quick reflexes to keep to a center course. It calls for swift and skillful turns, not for ideological dogma. A driver that only knows how to turn left is not going to get any further than a driver who knows only how to turn right.
Capitalism can be compared to a jungle in the same way that communism can be compared to a zoo. I used this analogy in the book "The Patterns Of New Ideas". The animals in the zoo look outside and see the animals in the jungle running free, and they long for their freedom too. One day, they break out of the zoo. At first, the former zoo animals are elated to have their freedom. But after a while they start to see that while the jungle is free, it is also harsh and competitive. Unlike in the zoo, there is no guarantee of the necessities of life. Also, they realize that the animals which they saw outside from their cages in the zoo were the ones that were doing relatively well. There are many more animals in the jungle that are not doing as well. The former zoo animals start to feel that maybe the zoo was not so bad after all. They do not really want to go back to the zoo, but decide to look for a middle way between the zoo and the jungle. The jungle represents "freedom to" and the zoo represents "freedom from", the best arrangement is halfway between the two.
Capitalism and communism can also be compared to two people and a cart. Both people steering the cart and neither of them pushing, is like communism and it does not get very far. Both people pushing the cart, and neither of them steering, is like capitalism. The cart goes faster, and faster, and faster, until it crashes. The mild socialism that is halfway between the two is represented by one person pushing and the other steering, and it does better than either of the other two.
Once again, my belief is that an effective and sustainable system of social programs is one that is based on income from a country's resources, as much as possible, and not in loading people with taxes. The trouble with socialism is that there is a tendency to believe that if a moderate amount of socialism works well, and it does, then more socialism will work even better, except that it doesn't. Economics is like a peak, with the peak of efficiency being halfway between capitalism on the right and communism on the left.
Both capitalism and communism misunderstand human nature. A fundamental flaw of capitalist thinking is that the goal of everyone is to be rich, and they spend their lives doing all that they can to achieve that goal. This simply is not true. It is set up to support those whose goal is to be rich, and that is what makes it unfair.
We could say that the most successful economic system is one that ends with the fewest people in prison. Countries that practice either communism or rightward capitalism tend to have higher prison populations than the mildly socialist countries in the middle. The more difficult it becomes to live by the rules, the more people there will be who don't live by the rules.
I believe that when there is an ideological conflict, the one that is nastier will be the weaker one with the nastiness being an attempt to compensate for the weakness. The least nasty, in my opinion, is the mild socialism that is halfway between capitalism and communism.
The further right or left anyone is, the more ideological they tend to be, making economics operate by dogma. Thatcher's policy of home ownership is an example. She tried to sell off Britain's council houses in order to make as many people as possible into homeowners. This did not work well because a lot of people either do not really want to be, or are simply not cut out to be homeowners.
It is my convinced opinion that a government should maintain certain industries, whether or not they are making a profit. To do otherwise is just more ideological dogma. How can a country really be independent without a certain capacity to make steel? What about sovereignty, should state-run airlines be privatized even though if they should go out of business it would mean that the country would be dependent on foreign planes to fly it's citizens between their own cities? How about buses, they may require subsidy but is this more than the cost of doing without them, making it more difficult for them to work and so cutting into consumer spending? It boosts an economy if people can get wherever they want to go as easily as possible.
The criteria for government programs is cost. The programs will cost money but which is greater, the cost of having them or the cost of not having them?
Economics is not the same thing as quality of life. The Callaghan government that preceded Thatcher is much reviled for going too far left. I first revisited the country where I had been born in the summer of 1978, after having not been there since I was a young child. I thought that I would like it, but was not sure exactly what to expect. However, I was delighted at what a fun and carefree place Britain seemed to be. The main objective seemed to be simply to have fun, the attitude being "one day you were born, and one day you will die, so you might as well have fun in between". I was pleasantly shocked that I could be walking, it would start to drizzle, as it always does sooner or later in England, and people would pull over and offer me a ride. Everything seemed very agreeable, at least as long as one did not try to find a better job.
To get an idea which economic system would work best in a country at a given time, go into a pub or bar and watch groups of people buying drinks. If they buy the drinks one-by-one, or with couples two-by-two, then the thinking is more rightward. But if the people within groups take turns buying rounds of drinks, then there is socialist thinking.
So much depends not on economics, but on the character of the population. We need people who value work, learning and being well-informed, taking care of their health and, following the Word of God. The way to be a patriot is not to wave a flag around, anybody can do that, but to take care of your health so as not to be a burden on the health care system of your country.
Thatcher was the first western leader to meet Mikhail Gorbachev. Him and his wife visited her in late 1984, and he became Soviet leader the following spring. Anyone can say or write all they want about the Cold War, but it would not have ended as it did without him. Gorbachev deserves more credit than anyone, and should not be forgotten even if the present Russian government does not care for him.
(Ironically, Russia would prove the truth of Communist denunciations about the evils of capitalism by it's own history. After the end of Soviet Communism in 1991, the country went capitalist and abundantly demonstrated just what an unfair system it can be. A few people got very rich, but most people were not better off. My opinion is that the present government is the best that Russia has had since the beginning of Communism in 1917).
Another irony is that the Argentine government that Thatcher went to war with over the Falkland Islands in 1982 was so right-wing that they were killing leftists in the so-called "Dirty War". This military government seized power in Argentina in 1976, and ruled until 1983. They came up with a novel way of executing leftist opponents by flying them out over the ocean, and then dropping them out of the plane. Maybe they and Thatcher should have been soul mates.
Thatcher was clearly a skeptic of the European Union. Brits are touchy about giving up sovereignity. The British way of doing things is to make sure that no one gets too much control. Britain began modern democracy by limiting the power of the king with the Magna Charta. Alone among the major nations of the world Britain does not have a written constitution, only the way that things have always been done, because that might mean giving up control to a piece of paper. Britain has never been ruled by a dictator because Brits will not follow someone who steps in and tries to take control. They followed Winston Churchill during the wartime, but swiftly voted him out just as soon as the war was over. Britain's parliamentary system makes it easy to remove a prime minister if he should start to act like a dictator or try to amass too much authority.
Hopefully, other Europeans will understand that Brits do not like to give up control. In fact, it could be called their national characteristic. But it is wonderful that Europe has gone from innumerable wars to where it is now, and Britain should have a vital part in it.
I think that Thatcher's charisma is underrated. She must have had some kind of magnetic personal appeal. One does not transform a country just by argument alone. A charismatic leader does not even have to use force, people will follow because they want to. Truly charismatic leaders can really light up a person's soul. Aung San Suu Kyi seems to be loaded with charisma. She can make people feel as if they can conquer the world, and want to conquer it just so that they can name it after her.
Finally, Margaret Thatcher just looked so English. To anyone that was born over there, she might be seen behind the counter at one of those old fish and chips shops. One might say "I'll have an order of fish and chips and a cup of tea". She would say, in a very British accent, "That'll be three pounds forty (or whatever price inflation has made it by now)".
During the summer of 1978, I was on my first return visit to my native England just after completing high school in the U.S. I seem to remember a blond woman in the news one day criticizing the present government of Britain. I did not know who she was and did not pay much attention. The following year, she was in the news again. Her name was Margaret Thatcher and she had just become prime minister of Britain.
I am no conservative when it comes to economics, as Thatcher was, but I do have some understanding of the highly controversial policies that she put into place if we consider the context.
The winter of 1978-79 was known as "The Winter of Discontent" in Britain. The economically liberal Callaghan government had gone on a spending spree. The result was a notorious strike-inflation spiral. Inflation was completely out of control, it would reach a dangerous nearly 14% in 1979. Workers in one industry would see workers in another industry getting pay raises by going on strike, and so they would strike too, all of which was fueling the spiral of inflation.
Thatcher won election in 1979 and purposely induced a recession because that was the only way to stop inflation. Nearly two years later, Ronald Reagan would take office in the U.S. and follow a similar course. The recession of the early 1980s was nasty in both countries, but it did succeed in stopping inflation and I agree with what they did. They simply had no choice, going too far left is as bad as going too far right.
It is said that if one list could be made of the most loved people ever, and another of the most hated, there would be many of the same people on both lists. There are few better examples of this than Margaret Thatcher. She knew how to handle inflation, but the resulting recession was really painful. Maybe there would be better memories of her if that had not been necessary, but that is not her fault. She is seen as a divisive figure, but once again that is due to the times and the fact of how far apart Britain's two main parties are.
I was in Britain only once during her 1979-1990 tenure, for a three week visit, but I did follow what was happening from a distance. I also have to agree with her taking on the coal miner's union. We cannot keep coal pits open when they are nearly mined out, and no longer profitable, just to preserve jobs.
I see Margaret Thatcher, and her U.S. counterpart Ronald Reagan, as well as to some extent the Canadian counterpart Brian Mulroney, as not only necessary products of their times, but also as half of the big picture of economics.
The left and the right, which we would call capitalism and communism in their more extreme forms, bring one another into existence because each is only half of the picture. This is because when one exists the other must also exist, on the opposite side, to restore the true economic balance. Put simply, economics is complex but most people are relatively simple so that we tend to see only part of the big picture. My view is that an economic system that is either well to the right, or well to the left, will be ultimately unsustainable because each is only half of the picture. The system will bounce back and forth from one side to the other in an effort to achieve sustainable balance.
Economics is a manifestation of freedom. My doctrine is that there are two slants to freedom, "freedom to" and "freedom from". The simplest example that I can think of is smoking. Should people have "freedom to" smoke, or should they have "freedom from" second-hand smoke. In the economic manifestation, the conservative right represents "freedom to", while the liberal left represents "freedom from".
The right wants people to have freedom to do all that they can to earn as much money as they are able to, and to spend it as they see fit. The right points out that taxing and spending by the government tends to result in destructive inflation. The left wants people to be able to earn money, but since money inevitably equals power they do not want a few wealthy people to use their power to set everything up to suit themselves so that the rich get richer and the poor get poorer, as tends to happen with capitalism. The left points out that when the rich take too much wealth for themselves, it does not leave enough money in circulation to buy all of the goods and services that are being produced in the economy, so that companies begin cutting back on production and a recessionary spiral gets under way.
My view is that an economic system must accommodate the entire freedom spectrum from "freedom to" to "freedom from". It can either do it by bouncing back and forth from right to left so that the two ultimately balance each other, or it can do it by the much more smoother and efficient method of setting a middle course to begin with. Capitalism and communism both have valid points, but also serious flaws, and the goal should be to set a middle course with the best of both and the worst of neither.
I am a dual national of the U.S. and Britain, although I have spent vastly more time in the U.S. It is from Britain that I draw the lesson of going too far left, and it is from the U.S. that I draw the lesson of going too far right. The U.S. economic crashes of 1929, 1987 and, 2008 were caused by the wealthy taking too much money out of the system so that there was not enough consumer spending to buy all of the goods and services being produced.
This is the context in which Margaret Thatcher must be understood. Reagan and Thatcher were too far right, but they had to be because the governments before them, Carter and Callaghan, were too far left. It would be much better just to set a balanced course from the beginning, but most people can only see one side or the other and not the whole picture.
What both Thatcher and Reagan did wrong was not to steer to the right at the beginning of the 1980s, they had little choice but to induce the recession because there was no other way to stop inflation. What they both did wrong is to stay with their conservative economic policies after this objective had been accomplished. They both should have steered toward the center, but they didn't. The result was the 1987 economic crash in America and Thatcher being removed by her own party after her attempt to organize Britain's tax system so that everyone, rich and not-so-rich, would pay just one flat tax.
(By the way, in a parliamentary democracy it is the party which rules and not the prime minister. If a prime minister becomes too unpopular, the party can simply replace him or her with someone else and continue to govern. This is what happened to Thatcher in 1990, and to Brian Mulroney in Canada. In the presidential system, in contrast, the president rules rather than the party and cannot be readily removed until his term is up).
Why was Thatcher so determined and uncompromising? My explanation is simple. Remember in my economic writings how we saw how people are designed to believe in something and when a person may not have really grasped the true religion, their nation or ideology or politics takes the place of religion. I do not know what Margaret Thatcher's religious convictions were, but she was the daughter of a Methodist minister and so would have been very familiar with Christianity. She saw herself as the saviour (savior) of Britain against the falseness of socialism and the diabolical Labour Party. It became very much a religious crusade, in which any kind of compromise would be completely unacceptable.
Another factor was warfare. For centuries, Britain had been in some kind of conflict at least every generation or so. But then along came the 1980s. The nation's collective psyche told it that it was time for another of the periodic battles of history. But, after the Falklands crisis of 1982, there was no significant foreign enemy to be found. So, the country turned inward and reenacted it's own civil war of long ago in the form of the Labour Party and socialism versus Thatcher.
Managing a modern economy does not require an iron will. It requires flexibility and quick reflexes to keep to a center course. It calls for swift and skillful turns, not for ideological dogma. A driver that only knows how to turn left is not going to get any further than a driver who knows only how to turn right.
Capitalism can be compared to a jungle in the same way that communism can be compared to a zoo. I used this analogy in the book "The Patterns Of New Ideas". The animals in the zoo look outside and see the animals in the jungle running free, and they long for their freedom too. One day, they break out of the zoo. At first, the former zoo animals are elated to have their freedom. But after a while they start to see that while the jungle is free, it is also harsh and competitive. Unlike in the zoo, there is no guarantee of the necessities of life. Also, they realize that the animals which they saw outside from their cages in the zoo were the ones that were doing relatively well. There are many more animals in the jungle that are not doing as well. The former zoo animals start to feel that maybe the zoo was not so bad after all. They do not really want to go back to the zoo, but decide to look for a middle way between the zoo and the jungle. The jungle represents "freedom to" and the zoo represents "freedom from", the best arrangement is halfway between the two.
Capitalism and communism can also be compared to two people and a cart. Both people steering the cart and neither of them pushing, is like communism and it does not get very far. Both people pushing the cart, and neither of them steering, is like capitalism. The cart goes faster, and faster, and faster, until it crashes. The mild socialism that is halfway between the two is represented by one person pushing and the other steering, and it does better than either of the other two.
Once again, my belief is that an effective and sustainable system of social programs is one that is based on income from a country's resources, as much as possible, and not in loading people with taxes. The trouble with socialism is that there is a tendency to believe that if a moderate amount of socialism works well, and it does, then more socialism will work even better, except that it doesn't. Economics is like a peak, with the peak of efficiency being halfway between capitalism on the right and communism on the left.
Both capitalism and communism misunderstand human nature. A fundamental flaw of capitalist thinking is that the goal of everyone is to be rich, and they spend their lives doing all that they can to achieve that goal. This simply is not true. It is set up to support those whose goal is to be rich, and that is what makes it unfair.
We could say that the most successful economic system is one that ends with the fewest people in prison. Countries that practice either communism or rightward capitalism tend to have higher prison populations than the mildly socialist countries in the middle. The more difficult it becomes to live by the rules, the more people there will be who don't live by the rules.
I believe that when there is an ideological conflict, the one that is nastier will be the weaker one with the nastiness being an attempt to compensate for the weakness. The least nasty, in my opinion, is the mild socialism that is halfway between capitalism and communism.
The further right or left anyone is, the more ideological they tend to be, making economics operate by dogma. Thatcher's policy of home ownership is an example. She tried to sell off Britain's council houses in order to make as many people as possible into homeowners. This did not work well because a lot of people either do not really want to be, or are simply not cut out to be homeowners.
It is my convinced opinion that a government should maintain certain industries, whether or not they are making a profit. To do otherwise is just more ideological dogma. How can a country really be independent without a certain capacity to make steel? What about sovereignty, should state-run airlines be privatized even though if they should go out of business it would mean that the country would be dependent on foreign planes to fly it's citizens between their own cities? How about buses, they may require subsidy but is this more than the cost of doing without them, making it more difficult for them to work and so cutting into consumer spending? It boosts an economy if people can get wherever they want to go as easily as possible.
The criteria for government programs is cost. The programs will cost money but which is greater, the cost of having them or the cost of not having them?
Economics is not the same thing as quality of life. The Callaghan government that preceded Thatcher is much reviled for going too far left. I first revisited the country where I had been born in the summer of 1978, after having not been there since I was a young child. I thought that I would like it, but was not sure exactly what to expect. However, I was delighted at what a fun and carefree place Britain seemed to be. The main objective seemed to be simply to have fun, the attitude being "one day you were born, and one day you will die, so you might as well have fun in between". I was pleasantly shocked that I could be walking, it would start to drizzle, as it always does sooner or later in England, and people would pull over and offer me a ride. Everything seemed very agreeable, at least as long as one did not try to find a better job.
To get an idea which economic system would work best in a country at a given time, go into a pub or bar and watch groups of people buying drinks. If they buy the drinks one-by-one, or with couples two-by-two, then the thinking is more rightward. But if the people within groups take turns buying rounds of drinks, then there is socialist thinking.
So much depends not on economics, but on the character of the population. We need people who value work, learning and being well-informed, taking care of their health and, following the Word of God. The way to be a patriot is not to wave a flag around, anybody can do that, but to take care of your health so as not to be a burden on the health care system of your country.
Thatcher was the first western leader to meet Mikhail Gorbachev. Him and his wife visited her in late 1984, and he became Soviet leader the following spring. Anyone can say or write all they want about the Cold War, but it would not have ended as it did without him. Gorbachev deserves more credit than anyone, and should not be forgotten even if the present Russian government does not care for him.
(Ironically, Russia would prove the truth of Communist denunciations about the evils of capitalism by it's own history. After the end of Soviet Communism in 1991, the country went capitalist and abundantly demonstrated just what an unfair system it can be. A few people got very rich, but most people were not better off. My opinion is that the present government is the best that Russia has had since the beginning of Communism in 1917).
Another irony is that the Argentine government that Thatcher went to war with over the Falkland Islands in 1982 was so right-wing that they were killing leftists in the so-called "Dirty War". This military government seized power in Argentina in 1976, and ruled until 1983. They came up with a novel way of executing leftist opponents by flying them out over the ocean, and then dropping them out of the plane. Maybe they and Thatcher should have been soul mates.
Thatcher was clearly a skeptic of the European Union. Brits are touchy about giving up sovereignity. The British way of doing things is to make sure that no one gets too much control. Britain began modern democracy by limiting the power of the king with the Magna Charta. Alone among the major nations of the world Britain does not have a written constitution, only the way that things have always been done, because that might mean giving up control to a piece of paper. Britain has never been ruled by a dictator because Brits will not follow someone who steps in and tries to take control. They followed Winston Churchill during the wartime, but swiftly voted him out just as soon as the war was over. Britain's parliamentary system makes it easy to remove a prime minister if he should start to act like a dictator or try to amass too much authority.
Hopefully, other Europeans will understand that Brits do not like to give up control. In fact, it could be called their national characteristic. But it is wonderful that Europe has gone from innumerable wars to where it is now, and Britain should have a vital part in it.
I think that Thatcher's charisma is underrated. She must have had some kind of magnetic personal appeal. One does not transform a country just by argument alone. A charismatic leader does not even have to use force, people will follow because they want to. Truly charismatic leaders can really light up a person's soul. Aung San Suu Kyi seems to be loaded with charisma. She can make people feel as if they can conquer the world, and want to conquer it just so that they can name it after her.
Finally, Margaret Thatcher just looked so English. To anyone that was born over there, she might be seen behind the counter at one of those old fish and chips shops. One might say "I'll have an order of fish and chips and a cup of tea". She would say, in a very British accent, "That'll be three pounds forty (or whatever price inflation has made it by now)".
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