I have always wondered why men invented logarithms, and assumed it began as an intellectual curiosity. Perhaps it did, but I now know why it was readily adopted. Men who needed to perform complex calculations, such as merchants or logistics officers in the military, and of course the obvious people like scientists, often needed to multiply two numbers: say, then wanted to know the value of W in W = XY. With the invention of logarithms, all they needed to do was look it up in mathematical tables (remember, some of these people may be barely literate).
Tables were created showing the value of log(X) for every X. Then, noting log(W) = log(X) + log(Y), which was told to them, they could simply look up the values of log(X) and log(Y) in the table, add them together, and get a value of log(W). Then they looked in the same table to see what value of W corresponded to log(W), and they had their answer. Quick. Accurate. Convenient.
Of course, most of these people didn't know why this method worked, only that it did. These methods and tables were constructed around 1614 by John Napier, Joost Burgi, and Henry Briggs.
Source:
Will and Ariel Durant. The Age of Reason Begins. The Story of Civiliation. VII.
Showing posts with label economic history. Show all posts
Showing posts with label economic history. Show all posts
Friday, March 2, 2012
Monday, February 27, 2012
Quotations on Usury and Historic Christianity
Below are a collection of quotes I used in a lecture today about usury and Christianity in Late Antiquity and Middle Ages. The one by Philip Daileader is the most interesting one.
…towns-people could assuage the guilt—purge the guilt—caused by their own greed and their own obsession with time. Medieval moralists condemned towns-people for being so concerned with money and profit—and, odd as this might seem to us today, [for whom] planning doesn’t seem like much of a sin…—Medieval moralists considered it bad for individuals to plan about the future, to care about the future too much. Because if you plan actively what you are going to be doing tomorrow or the next day and a year from now, you are showing insufficient trust in God…
…towns-people could assuage the guilt—purge the guilt—caused by their own greed and their own obsession with time. Medieval moralists condemned towns-people for being so concerned with money and profit—and, odd as this might seem to us today, [for whom] planning doesn’t seem like much of a sin…—Medieval moralists considered it bad for individuals to plan about the future, to care about the future too much. Because if you plan actively what you are going to be doing tomorrow or the next day and a year from now, you are showing insufficient trust in God…
—Philip Daileader. High Middle Ages. Lecture 10: Francis of Assisi and the Franciscan Movement. The Teaching Company.
Many held that one simply could not be both a merchant and a Christian…
—David Graeber in Debt: The First 5,000 Years
If you lend money to My people, to the poor among you, you are not to act as a creditor to him; you shall not charge him interest.
—Exodus 22:25 (New International Version)
Lord, who may dwell in your sanctuary?
Who may live on your holy hill?
…who lends his money without usury and does not accept a bribe against the innocent.
He who does these things will never be shaken.
—Psalm 15 (New International Version)
Shouldn’t you walk in the fear of our God to avoid the reproach of our Gentile enemies? I and my brothers and my men are also lending the people money and grain. But let the exacting of usury stop! Give back to them immediately their fields, vineyards, olive groves and houses, and also the usury you are charging them…
—Nehemiah 5:9 (New International Version)
Who has withdrawn his hand from the poor And not received usury or increase, But has executed my judgments And walked in My statutes—He shall not die for the iniquity of his father; He shall surely live!
—Ezekiel 18:17 (New King James Bible)
“In you they take bribes to shed blood; you take usury and increase; you have made profit from your neighbors by extortion and have forgotten Me,” says the Lord GOD.
—Ezekiel 18:13 (New King James Bible)
Do not charge your brother interest, whether on money or food or anything else that may earn interest. You may charge a foreigner interest, but not a brother Israelite…
—Deuteronomy 23:19 (New International Version)
What should the rich man do when receiving a visit from his troubled neighbor? True, Jesus had said to give without expectation of return, but it seemed unrealistic to expect most Christians to do that. And even if they did, what sort of ongoing relationships would that create? St. Basil took the radical position. God had given us all things in common, and he had specifically instructed the rich to give their possessions to the poor. The communism of the Apostles—who pooled all their wealth, and took freely what they needed—was thus the only proper model for a truly Christian society.
—David Graeber in Debt: The First 5,000 Years
Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Who of you by worrying can add a single hour to his life.
And why do you worry about clothes?...So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the pagans run after all these things…Therefore do not worry about tomorrow, for tomorrow will worry about itself…
—Matthew 6:14 (New International Version)
The Lord gave His own injunction quite plainly in the words, “from him that would borrow of thee turn not thou away.”
But what of the money lover? He sees before him a man under stress of necessity bent to the ground in supplication. He sees him hesitating at no act, no words, of humiliation. He sees him suffering undeserved misfortune, but he is merciless. He does not reckon that he is a fellow-creature. He does not give in to his entreaties. He stands stiff and sour. He is moved by no prayers; his resolution is broken by no tears….
…
With pretences of this kind and talk like this he fawns on the wretched victim, and induces him to swallow the bait. Then he binds him with a written security, adds loss of liberty to the trouble of his pressing poverty, and is off. The man who has made himself responsible for interest that he cannot pay has accepted voluntary slavery for life.
—Saint Basil. Sermon on usury given in 365 A.D. This sermon set the standard for the morality of usury for centuries.
…fathers forced to sell their children, debtors who hanged themselves out of shame. Usury, he observed, must be considered a form of violent robbery, even murder.
—David Graeber in Debt: The First 5,000 Years
Tuesday, February 21, 2012
J. S. Mill: The father of liberty
Ask the average person today what freedom entails, and they will say it is the right to do whatever one wants so long as it does not interfere with the liberty of others. I thought this definition reached far back in time, but it seems that this form of liberty was first described by John Stuart Mill.
The object of this Essay is to assert one very simple principle, as entitled to govern absolutely the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penalties, or the moral coercion of public opinion. That principle is, that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to pre- vent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinion of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not for compelling him, or visiting him with any evil, in case he do otherwise. To justify that, the conduct from which it is desired to deter him must be calculated to produce evil to some one else. The only part of the conduct of any one, for which he is amenable to society, is that which concerns others. In the part which merely concerns himself, his independence is, of right, absolute. Over himself, over his own body, the individual is sovereign.
—John Stuart Mill. On Liberty. Chapter 1.
Tuesday, December 6, 2011
A Story of Creativity: how the stethoscope was invented
I love stories illustrating how bursts of creativity are formed, and here is one I heard today.
Laennec was a French medical doctor who encountered a patient that would change medical history forever. She was not wealthy, smelt bad, a little obese, yet pretty, and Laennec did not want to press his ear to the skin under her breast to listen to her heartbeat—as he should have.
Later that day he was walking in a the Louvre courtyard where he saw two kids playing a game he recalled from his childhood. The game requires two people on the opposite side of a board. One person would scratch a symbol (perhaps a letter) on one end of the board and the other person pressed his ear to the board and tried to decipher the symbol from the sound alone.
Brilliant! That is how the stethoscope was born. Laennec experience this burst of creativity where he immediately knew how to listen to the heart and lungs better while standing further from the patient. Rushing back to the hospital, he finds the woman, rolls up a notebook into a cylinder, and presses one end on the patient's chest and his ear to the other end. It worked. Much better than the unaided ear. With refinements to this basic idea the modern stethoscope was born.
The psychologist Jonathan Haidt describes the mind as a rider on an elephant. The conscious component is the rider, who tries to direct the elephant, which is a metaphor for the subconscious.
Laennec's genius stems from the fact that his elephant was working on medical problems without the rider's awareness, and once it found something it brought it to the rider's attention—much as an elephant might stop without being told too if it sees something the rider cannot.
We should not lament the fact that our mind concentrates on seemingly irrelevant details when our consciousness focuses on a problem. Yes, our stated values can change according to environmental factors irrelevant to the good's worth. For instance, without our awareness, we state a higher value for a beer if it comes from a hotel whose prices are high, compared to the same beer from convenient stores, known for low prices.
So what if our mind anchored onto something irrelevant to the taste and satisfaction of the beer. Because our mind is constantly weaving unrelated observations together, we suffer from minor (but scientifically identifiable) irrationality (the kind that helps behavioral economics earn tenure and sell books). Yet this irrationality is the womb of creative genius. Laennec was able to connect the kids' game with the patient, and modern medicine forever improved. Likewise, our mysterious elephant is a wrinkled ton of possibility, because of—not in spite of—many behavioral irrationality.
Source
Sherwin B. Nuland
Doctors: The History of Scientific Medicine Revealed Through Biography
Lecture Seven: Laennec and the Invention of the Stethoscope
The Great Courses.
Laennec was a French medical doctor who encountered a patient that would change medical history forever. She was not wealthy, smelt bad, a little obese, yet pretty, and Laennec did not want to press his ear to the skin under her breast to listen to her heartbeat—as he should have.
Later that day he was walking in a the Louvre courtyard where he saw two kids playing a game he recalled from his childhood. The game requires two people on the opposite side of a board. One person would scratch a symbol (perhaps a letter) on one end of the board and the other person pressed his ear to the board and tried to decipher the symbol from the sound alone.
Brilliant! That is how the stethoscope was born. Laennec experience this burst of creativity where he immediately knew how to listen to the heart and lungs better while standing further from the patient. Rushing back to the hospital, he finds the woman, rolls up a notebook into a cylinder, and presses one end on the patient's chest and his ear to the other end. It worked. Much better than the unaided ear. With refinements to this basic idea the modern stethoscope was born.
The psychologist Jonathan Haidt describes the mind as a rider on an elephant. The conscious component is the rider, who tries to direct the elephant, which is a metaphor for the subconscious.
Laennec's genius stems from the fact that his elephant was working on medical problems without the rider's awareness, and once it found something it brought it to the rider's attention—much as an elephant might stop without being told too if it sees something the rider cannot.
We should not lament the fact that our mind concentrates on seemingly irrelevant details when our consciousness focuses on a problem. Yes, our stated values can change according to environmental factors irrelevant to the good's worth. For instance, without our awareness, we state a higher value for a beer if it comes from a hotel whose prices are high, compared to the same beer from convenient stores, known for low prices.
So what if our mind anchored onto something irrelevant to the taste and satisfaction of the beer. Because our mind is constantly weaving unrelated observations together, we suffer from minor (but scientifically identifiable) irrationality (the kind that helps behavioral economics earn tenure and sell books). Yet this irrationality is the womb of creative genius. Laennec was able to connect the kids' game with the patient, and modern medicine forever improved. Likewise, our mysterious elephant is a wrinkled ton of possibility, because of—not in spite of—many behavioral irrationality.
Source
Sherwin B. Nuland
Doctors: The History of Scientific Medicine Revealed Through Biography
Lecture Seven: Laennec and the Invention of the Stethoscope
The Great Courses.
Monday, December 5, 2011
The Truth About Communal Living
Every Thanksgiving, the Libertarian blogs I read pass around narratives of the Pilgrims' experience with their new home in America, and those narratives are true stories about the failure of a socialist system. The Pilgrims first initially employed a communal lifestyle without property, where one was supposed to work out of loyalty to everyone else, and the amount of food one received was largely independent of one's own effort, but heavily dependent upon the effort of others.
If we are to be objective researchers, however, we must also admit that there have been many instances when communal living was successful. Many monasteries are an example, especially the Benedictine kind, where monks grew food and engaged in crafts for self-consumption and sale and all the proceeds are given to the monastery as a whole, to be distributed by the monastery. Some Mendicant Orders might be included, and some nunneries.
Better examples are found in the eighteenth and nineteenth societies formed in Germany and carried to the U.S., where hundreds and sometimes thousands of people lived and worked diligently for the society itself, with no personal property of their own. They go by the names Amana Society, Harmonists, Separatists of Zoar, and the most widely known society, the Shakers. I consider these Protestant and independent monasteries. There are others: The Oneida and Wallingford Protectionists, Aurora and Bethel Communities, Icarians, the Bishop Hill Colony, and the Cedar Vale Commune. I want to say the Transcendentalists created a commune, as well as the famous U.S. socialist Upton Sinclair, but I can't say for sure (I know Sinclair lived in a commune at one time, but I can't remember what kind of commune).
While it is true that few such communes exist today, neither do some nations that existed in the nineteenth century (e.g., Prussia). Most of these did thrive for decades though, and left behind large estates with fertile land and large, sturdy buildings. They lived a socialist lifestyle, without property, and for them it worked. Plenty of communes have failed after a vigorous start—think hippies—but plenty did not.
I certainly would never want to live in such a place, but neither would I want to spread the story of the Pilgrims without the story of these other societies. Communal living, without property, and with labor motivated by altruism and strict social norms, can work. It seems the key to their success resides in their voluntary nature (by contrast, communism was mandatory in Russia, and initially for the Pilgrims), the religious fervor of their members, and a diligently monitored set of social customs (either work, or live someplace else).
Communal living is a possibility in some instances, and Libertarians can admit this while still arguing that the possibilities are few—and for them personally, non-existent.
Inspired and partially informed by...
Charles Nordhoff
American Utopias
Originally published in 1875 as The Communistic Societies of the United States.
If we are to be objective researchers, however, we must also admit that there have been many instances when communal living was successful. Many monasteries are an example, especially the Benedictine kind, where monks grew food and engaged in crafts for self-consumption and sale and all the proceeds are given to the monastery as a whole, to be distributed by the monastery. Some Mendicant Orders might be included, and some nunneries.
Better examples are found in the eighteenth and nineteenth societies formed in Germany and carried to the U.S., where hundreds and sometimes thousands of people lived and worked diligently for the society itself, with no personal property of their own. They go by the names Amana Society, Harmonists, Separatists of Zoar, and the most widely known society, the Shakers. I consider these Protestant and independent monasteries. There are others: The Oneida and Wallingford Protectionists, Aurora and Bethel Communities, Icarians, the Bishop Hill Colony, and the Cedar Vale Commune. I want to say the Transcendentalists created a commune, as well as the famous U.S. socialist Upton Sinclair, but I can't say for sure (I know Sinclair lived in a commune at one time, but I can't remember what kind of commune).
While it is true that few such communes exist today, neither do some nations that existed in the nineteenth century (e.g., Prussia). Most of these did thrive for decades though, and left behind large estates with fertile land and large, sturdy buildings. They lived a socialist lifestyle, without property, and for them it worked. Plenty of communes have failed after a vigorous start—think hippies—but plenty did not.
I certainly would never want to live in such a place, but neither would I want to spread the story of the Pilgrims without the story of these other societies. Communal living, without property, and with labor motivated by altruism and strict social norms, can work. It seems the key to their success resides in their voluntary nature (by contrast, communism was mandatory in Russia, and initially for the Pilgrims), the religious fervor of their members, and a diligently monitored set of social customs (either work, or live someplace else).
Communal living is a possibility in some instances, and Libertarians can admit this while still arguing that the possibilities are few—and for them personally, non-existent.
Inspired and partially informed by...
Charles Nordhoff
American Utopias
Originally published in 1875 as The Communistic Societies of the United States.
Friday, December 2, 2011
Thomas More's Utopia
Thomas More's Utopia is what I am reading (actually, a easily-read translation by Robert Adams). And these are some my impressions.
I never understood where the word "Utopia" came from until now. The word was invented by More, combining a Greek adverb and noun to create a word best interpreted as "no place." Clever. The strangest thing about the book is that it is divided into two sections, and the first section seems irrelevant.
Much of it is predictable, and reminiscent of a college progressive yearning for local food, ostentatious equality, and despots. The book is far from boring, however, and here are some parts I particularly enjoyed.
Everyone works in Utopia, and in similar jobs. Each person farms for a period of time and works a craft other times. Because each person performs similar manual labor, and because one does not earn money for their labor, there is considerable equality. They also work less than people do even today: six hours a day, including Saturday. Although Utopians work less and cannot specialize, they are wealthier. Why?
Thomas More makes an argument that because there is no upper-class to confiscate the wealth of others, and because that upper-class in non-Utopian society is assumed to provide no service (I thought peasants worked, clergy prayed, and nobles fought?), each person in Utopia consumes more while working less because there are more people working. This assumption breeds another: that no money is required because there is so much wealth, when people take all they "need" there will still be goods left over.
Pervading the assumed functionality of Utopia is the assumption that social pressure will work as well or better than money in inducing people to work hard. It is also assumed that the social culture of equality will prevent people from distinguishing themselves and causing inequality. It is the social norms of Utopia that is responsible for the equality and wealth, not politics (in fact, there are very few laws in Utopia, and no lawyers).
This made me think of wage labor in the Soviet Union (particularly in the 1929-1941 era). All proletariats were guaranteed a job, but at set wages for everyone. Because the Communist Party determined other things like food rations, housing, and the like, there was considerable equality (cramped housing, fleas in summer, stale bread, and even some laudable things like women's rights). Like Utopia, a strict passport system existed in Russia, limiting people's rights to move around.
Russian communists tried desperately to establish a new proletariat culture where workers were inspired to work diligently despite the lack of economic incentives. Maybe some of them had read Utopia. Because the proletariats could easily find work elsewhere, they were hardly submissive to their bosses. Good luck finding workers on a peasant holiday. How did communists try to change peasant culture? For example, Russia established a movement called socialist competition, where groups pledged to reach certain production goals and competed against other groups in fulfilling this mission. The same thing happened in Utopia, where blocks of communities competed against each other for the best gardens. This kind of thing worked in Utopia, but failed in Russia.
Slowly, the Communist Party learned that the social culture in Utopia, where people work out of social obligation alone, was hard to instill, so they they began mimicking the free-market. Higher wages were not offered, but hard working laborers did win metals, special meals, priority to housing, goods experiencing a shortage, and cheap theater tickets (how is that not a market?). When that didn't work, the Communists began offering higher wages for better (more skilled and more reliable) work , and did their best to find a wage close to the free-market wage but still meeting budget restrictions; after all, a Russian plant may offer higher wages for better work and higher quality products, but because they don't sell these products on the market and instead "distribute" them to other organizations, additional revenues may not result. And by 1931, 70% of workers were paid based on what they produced, not what they "needed." However much people dislike markets, they have a hard time living without them.
The contrast between a 16th century fictional account of an idealized social system and its partial implementation in 20th century Russia provides a number of instructive contrasts. The most notable of these is the very reasonable idea that reliable, high quality work on a large-scale really does require more compensation. Go figure.
Sources:
More, Thomas. 1516. Utopia. Edited by George M. Logan and Robert M. Adams in 1989. W. W. Norton & Company: NY, NY.
Hoffman, David L. 1994. Peasant Metropolis: Social Identities in Moscow, 1929-1941. Cornell University Press: Ithaca, NY.
I never understood where the word "Utopia" came from until now. The word was invented by More, combining a Greek adverb and noun to create a word best interpreted as "no place." Clever. The strangest thing about the book is that it is divided into two sections, and the first section seems irrelevant.
Much of it is predictable, and reminiscent of a college progressive yearning for local food, ostentatious equality, and despots. The book is far from boring, however, and here are some parts I particularly enjoyed.
Everyone works in Utopia, and in similar jobs. Each person farms for a period of time and works a craft other times. Because each person performs similar manual labor, and because one does not earn money for their labor, there is considerable equality. They also work less than people do even today: six hours a day, including Saturday. Although Utopians work less and cannot specialize, they are wealthier. Why?
Thomas More makes an argument that because there is no upper-class to confiscate the wealth of others, and because that upper-class in non-Utopian society is assumed to provide no service (I thought peasants worked, clergy prayed, and nobles fought?), each person in Utopia consumes more while working less because there are more people working. This assumption breeds another: that no money is required because there is so much wealth, when people take all they "need" there will still be goods left over.
Pervading the assumed functionality of Utopia is the assumption that social pressure will work as well or better than money in inducing people to work hard. It is also assumed that the social culture of equality will prevent people from distinguishing themselves and causing inequality. It is the social norms of Utopia that is responsible for the equality and wealth, not politics (in fact, there are very few laws in Utopia, and no lawyers).
This made me think of wage labor in the Soviet Union (particularly in the 1929-1941 era). All proletariats were guaranteed a job, but at set wages for everyone. Because the Communist Party determined other things like food rations, housing, and the like, there was considerable equality (cramped housing, fleas in summer, stale bread, and even some laudable things like women's rights). Like Utopia, a strict passport system existed in Russia, limiting people's rights to move around.
Russian communists tried desperately to establish a new proletariat culture where workers were inspired to work diligently despite the lack of economic incentives. Maybe some of them had read Utopia. Because the proletariats could easily find work elsewhere, they were hardly submissive to their bosses. Good luck finding workers on a peasant holiday. How did communists try to change peasant culture? For example, Russia established a movement called socialist competition, where groups pledged to reach certain production goals and competed against other groups in fulfilling this mission. The same thing happened in Utopia, where blocks of communities competed against each other for the best gardens. This kind of thing worked in Utopia, but failed in Russia.
Slowly, the Communist Party learned that the social culture in Utopia, where people work out of social obligation alone, was hard to instill, so they they began mimicking the free-market. Higher wages were not offered, but hard working laborers did win metals, special meals, priority to housing, goods experiencing a shortage, and cheap theater tickets (how is that not a market?). When that didn't work, the Communists began offering higher wages for better (more skilled and more reliable) work , and did their best to find a wage close to the free-market wage but still meeting budget restrictions; after all, a Russian plant may offer higher wages for better work and higher quality products, but because they don't sell these products on the market and instead "distribute" them to other organizations, additional revenues may not result. And by 1931, 70% of workers were paid based on what they produced, not what they "needed." However much people dislike markets, they have a hard time living without them.
The contrast between a 16th century fictional account of an idealized social system and its partial implementation in 20th century Russia provides a number of instructive contrasts. The most notable of these is the very reasonable idea that reliable, high quality work on a large-scale really does require more compensation. Go figure.
Sources:
More, Thomas. 1516. Utopia. Edited by George M. Logan and Robert M. Adams in 1989. W. W. Norton & Company: NY, NY.
Hoffman, David L. 1994. Peasant Metropolis: Social Identities in Moscow, 1929-1941. Cornell University Press: Ithaca, NY.
Tuesday, November 22, 2011
Christopher Columbus Loves Genghis Kahn
Christopher Columbus did not know know the Mongolian Empire was no more. All he knew was that Eurasia had lost the safe and prosperous trade routes the Mongols had once provided, and he wanted to resurrect this lost source of trade. So when we set his sails westward, he wasn't looking for India (contrary to what you learned in school), he was looking for the Mongol Court.
Indeed, no emperor valued free trade more highly than Genghis Kahn. His descendants and military ensured merchants safe travel. Shelters were erected with provisions every thirty miles, and in some areas, guide to lead merchants entering new territory. Passports and credit cards were created, as well as paper money.
Perhaps most importantly, he abolished taxes and tolls that increased transportation costs without increasing the value of the goods traded.
(This is something America's founders understood well, when in an amalgamation of fiercely independent states, they prohibited states from charging fees to merchants transporting goods across state lines. Facts like these are causing me to rethink the idea that decentralized power is always a more desirable power.)
It should be noted that this free-trade ideology was not just an ideology based on gains from trade, but the manner in which Mongol tribes instituted shares, where each ruler of one area of the empire shared some of his tribute with all other Mongolian warriors, requiring a safe and convenient transportation system. The shares helped reinforce Mongolian cohesiveness.
However, it is not like the U.S. has a free trade policy due to ideology alone. Lobbying by exporters plays a vital role in ensuring free trade.
Whatever you think about Genghis Kahn, when it comes to trade, he is an economist's ideal ruler.
Source
Jack Weatherford.
Genghis Kahn and the Making of the Modern World.
2004.
Three Rivers Press.
Indeed, no emperor valued free trade more highly than Genghis Kahn. His descendants and military ensured merchants safe travel. Shelters were erected with provisions every thirty miles, and in some areas, guide to lead merchants entering new territory. Passports and credit cards were created, as well as paper money.
Perhaps most importantly, he abolished taxes and tolls that increased transportation costs without increasing the value of the goods traded.
(This is something America's founders understood well, when in an amalgamation of fiercely independent states, they prohibited states from charging fees to merchants transporting goods across state lines. Facts like these are causing me to rethink the idea that decentralized power is always a more desirable power.)
It should be noted that this free-trade ideology was not just an ideology based on gains from trade, but the manner in which Mongol tribes instituted shares, where each ruler of one area of the empire shared some of his tribute with all other Mongolian warriors, requiring a safe and convenient transportation system. The shares helped reinforce Mongolian cohesiveness.
However, it is not like the U.S. has a free trade policy due to ideology alone. Lobbying by exporters plays a vital role in ensuring free trade.
Whatever you think about Genghis Kahn, when it comes to trade, he is an economist's ideal ruler.
Source
Jack Weatherford.
Genghis Kahn and the Making of the Modern World.
2004.
Three Rivers Press.
Thursday, November 3, 2011
Don't hate the merchant, hate the game
In my readings of history I am continually baffled at various society's debasement of merchants. In Medieval societies the merchant wasn't even included in the classes of society (three classes: the peasants, who worked; the clergy, who prayed; and the noble, who fought), as if merchants added nothing to social felicity.
Ninth century China was even worse. The Chinese class system was divided as follows, with the highest class listed first.
When I was first taught the four classes of utility...
Source
Kenneth J. Hammond
"Five Dynasties and the Song Founding"
Lecture 14
From Yao to Mao: 5000 Years of Chinese History
The Teaching Company
Ninth century China was even worse. The Chinese class system was divided as follows, with the highest class listed first.
- The Gentleman / Noble: "...The Gentlemen are at the top of the hierarchy because they manage the affairs of society, so their social utility is at the most..."
- Farmer / Peasant: "...because they produce the food which everyone needs to survive."
- Artisan: "...because while they don't produce food, they make things that are of use to everybody."
- Merchants: "Merchants are at the bottom because they don't produce anything themselves. They don't grow food, they don't make objects of utility. What they do is take things that other people have produced, move'em around, and enrich themselves in the process. So they are seen in the Confuciun system as being in a sort of socially-parasitic role. They do perform a social function, but it is one which is tainted—it is morally less acceptable, because they enrich themselves from the production of others."
When I was first taught the four classes of utility...
- Form Utility
- Time Utility
- Place Utility
- Possession Utility
...I felt it stupid that it needed to be pointed out that someone who transports bread from where it is made to the time and place I want to eat the bread performs me a valuable service. However, history shows us that what appears obvious to us now was not so obvious without a good education.
Perhaps the Chinese felt that no special skills were involved in being a merchant, whereas a farmer, artisan, and gentleman could not perform their duties without learning certain skills.
One only has to observe the sophistication of storage, transport, logistics, and retailing to understand that today's merchant possesses an array of valuable skills.
One only has to observe the sophistication of storage, transport, logistics, and retailing to understand that today's merchant possesses an array of valuable skills.
If I were teaching the four classes of utility, I would definitely discuss this artifact of Chinese history to motivate what seems so obvious to us now.
Source
Kenneth J. Hammond
"Five Dynasties and the Song Founding"
Lecture 14
From Yao to Mao: 5000 Years of Chinese History
The Teaching Company
Wednesday, November 2, 2011
Piquo and Welfare Economics
According to John Kenneth Galbraith, A.C. Pigou (for whom the Pigouvian tax is named after) "was known for having brought the word 'welfare' into economic use."
Source
John Kenneth Galbraith
A Tenured Professor
Page 36
1990
Houghton Mifflin Company
Source
John Kenneth Galbraith
A Tenured Professor
Page 36
1990
Houghton Mifflin Company
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