December 8, 2008
1974 All Over Again?
February 17, 2005
I received an email from Will Wilkinson a few days ago letting me know that he had written an article, Capitalism and Human Nature, for the latest Cato Policy Report. Having just finished the piece I strongly recommend you give it a read.
The premise deals with evolutionary psychology and the theory that since we slowly evolved from hunter-gathers some 50,000 year ago, many of the psychological traits that evolved then are still with us today. This helps to explain why some aspects of modern society are easy for us to deal with, while others require quite a bit more exertion. Some points that are mentioned are the fact that we are coalitional, hierarchical, envious zero-sum thinkers, and that we understand mutually beneficial exchange. These characteristics can all theoretically be traced to evolution in our distant past and have implications in terms of how our society functions presently.
It got me thinking about the introduction to this essay by Paul Romer:
In the modern version of an old legend, an investment banker asks to be paid by placing one penny on the first square of a chess board, two pennies on the second square, four on the third, etc. If the banker had asked that only the white squares be used, the initial penny would double in value thirty-one times, leaving $21.5 million on the last square. Using both the black and the white squares makes the penny grow to $92,000,000 billion.
People are reasonably good at forming estimates based on addition, but for operations such as compounding that depend on repeated multiplication, we systematically underestimate how fast things grow.
Now tying this in with the discussion above, hunter-gatherers could possibly need to make estimates based on addition, but clearly they would not need to make estimates based on compounding in order to survive. It follows then that our brain could evolve without this ability.
This fits nicely into one of the reasons that private accounts for social security are such a hard sell. Just as I'm amazed that doubling a penny 32 times leads to $21.5 million, no matter how many times I see the numbers, I'm equally shocked that investing $2000 a year over a 45 year period ($90,000 of actual savings) turns into $1,251,725.52 if it compounds at 9%. It's just not something that is intuitive. So try as he might, pointing out that a portion of our payroll taxes will now compound at 6.5% instead of 1.5% will never have the desired effect that Bush is looking for.
Now this isn't to say we can't understand the process if we rational think about it, but it clearly involves some extra effort.
Finally, it must be said that Will is just a damn good writer (despite the fact that sometimes what he writes about is over my head). Take a look at how well he starts off the piece and then go through the whole thing:
In the spring of 1845, Karl Marx wrote, ". . . the human essence is no abstraction inherent in each single individual. In its reality it is the ensemble of social relations." Marx's idea was that a change in the "ensemble of social relations" can change "the human essence."
In June 2004 the communist North Korean government issued a statement to its starving citizens recommending the consumption of pine needles. Pyongyang maintained that pine needle tea could effectively prevent and treat cancer, arteriosclerosis, diabetes, cerebral hemorrhage, and even turn grey hair to black.
Tragically, human nature isn't at all as advertised, and neither is pine needle tea. According to the U.S. State Department, at least one million North Koreans have died of famine since 1995.
Marx's theory of human nature, like Kim Jong Il's theory of pine needle tea, is a biological fantasy, and we have the corpses to prove it. Which may drive us to wonder: if communism is deadly because it is contrary to human nature, does that imply that capitalism, which is contrary to communism, is distinctively compatible with human nature?
A growing scientific discipline called evolutionary psychology specializes in uncovering the truth about human nature, and it is already illuminating what we know about the possibilities of human social organization. How natural is capitalism?
January 27, 2005
The Liberation of Auschwitz
Today commemorates the 60th anniversary of the liberation of Auschwitz. Take 10 minutes out of your life and read this inspiring, yet heartbreaking story of an American serviceman and a survivor of the Nazi death camp:
The two young men stood trembling before Army Lt. John Withers, dressed in the rags they'd worn at the recently liberated Dachau concentration camp. Sores pocked their bony arms and legs. Decades later, the lieutenant would remember how their sunken eyes sought mercy.
But in 1945, near the end of World War II, they posed a problem. Lt. Withers was a black leader in an all-black supply convoy. In violation of Army orders, his men were hiding the refugees. Lt. Withers planned to have the strangers removed -- until he saw them.
They stayed with his unit for more than a year, two Jewish survivors of the Holocaust hiding among blacks from segregated America. The soldiers nicknamed them "Peewee" and "Salomon." They grew close to Lt. Withers. By the time he bid them farewell, they'd grown healthy again.
Mr. Withers never forgot them. Over the years, he told and retold their tale to his two sons. When one son set out to find them, he discovered that Salomon had died in 1993. But Peewee, he learned, was alive.
Unlike Mr. Withers, Peewee had buried his past. His children and grandchildren knew almost nothing about his time in Auschwitz, Buchenwald and Dachau. When his grandson asked about the number tattooed on his left forearm -- A19104 -- all he could say was, "Bad people put that down."
He couldn't bring himself to talk about it.
Then John Withers reappeared -- and changed Peewee's life yet again.