Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Tuesday, November 06, 2007

The Most Successful Peasant Revolt In European History


According to some historians, during the thousand year long Middle Ages in Europe there was on average one peasant revolt per year. All of them failed.

There are several reasons for the failure of the peasantry to successfully revolt against the elites of the Middle Ages, but I'll mention only one reason to illustrate the difficulty the peasants faced. Before the advent of the hand-held firearm, it required years of training to produce someone highly competent in the best weapons of the Middle Ages. Most peasants didn't train in those weapons, and as a consequence, were usually over-matched when they revolted. Sickles against lances, hammers against swords.

But why did the peasants so frequently revolt in the first place? The most usual reason seems to have been famine. During most of the middle ages, transportation was so poor that it was almost unheard of to ship food in bulk for any distance. So, if the crops failed in one locality, that locality could experience famine even though there might be a surplus of food a mere 30 miles away. When famine struck a locality, the elites had custom, law and force all on their side -- they got what food there was, despite that the peasants produced the food. That left the peasants starving and prone to revolt.

Broadly speaking, at least three things came together to end the thousand year landscape of the Middle Ages. The first was the rise of capitalism, which can be traced back to very early beginnings around 900 A.D. The second was the British Agricultural Revolution -- a remarkable increase in agricultural productivity -- that can be traced back to around 1500 A.D. And the third was the Industrial Revolution, which began around 1700 A.D.

Those three factors, working together, created Europe's most successful peasant revolt. For, while all the revolts of the Middle Ages failed, capitalism, the British Agricultural Revolution, and the Industrial Revolution eventually brought not only wealth and long lifespans to the peasantry, but arguably contributed to their political liberation.

It seems odd to me that nowadays so many of us have come to resent those three developments. We see the many serious problems they have created and we sometimes imagine it would be a good thing if we were rid of capitalism, industrialization, and even large scale agriculture. Yet, to get rid of those things would surely plunge us back into an age when most people lived a short life of scarcity and want. So, I think the real problem is not to get rid of the very things that have lifted societies out of poverty, but to "update" them. We do not need, for instance, to abolish capitalism so much as we need a newer, more useful version of it with the most pressing bugs worked out.

A final consideration here is my gripe against ideologies. Not just any ideology, but all ideologies suffer from the fact they are either impossible or cumbersome to change. The world moves on, but the world's ideologies merely turn into retarded and retarding dogmas. I have never met an ideology that didn't turn to stone all it touched. If a software company were ever to adopt an ideology of software, you can bet they would go out of business -- because they would never update their product in any meaningful or useful way. Version 2.0 would have the same bugs as version 1.0 -- and only the marketing department would say it was better than 1.0. If we are ever so unwise as to leave the future of capitalism, the agricultural and industrial revolutions entirely to ideologists, we will surely get the disasters we deserve for our folly.

After all, it wasn't Christianity, the ideology of the day, that brought about Europe's most successful peasant revolt. Nor should we expect the ideologies of our day to bring about a successful social and economic future for humanity.

Wednesday, September 19, 2007

Why Corporations Cannot be Moral

"Every publicly-held company is dependent on the stock market for obtaining more capital. Its stock price reflects the present discounted value that investors place on its future profits and dividends. No matter how far-sighted a company claims it is being, it must watch its stock price; if that price falls too low, investors will either leave the company, causing the price to fall further, or some investors will take over the company. It's very important for progressives to understand that there is no moral company. Companies are not and cannot be socially responsible if that means sacrificing profits. To assume otherwise is to buy into corporate public relations, and to deflect attention away from the far more important job of pushing for new laws and regulations that force companies to act in the public interest and not solely in the interests of shareholders and consumers."

- Robert Reich

Tuesday, August 28, 2007

A Few Obstacles To Playing To Your Strengths

Ed Diener is America's foremost psychologist researching human happiness. In a 2003 study, he and Shigehiro Oishi discovered that European and Asian Americans behaved differently when choosing tasks to perform.

The European Americans typically picked tasks they were good at, while the Asian Americans were significantly more likely to ignore whether they were good at something when choosing whether to do it. Diener and Oishi further discovered that over time the European Americans expressed greater happiness with their tasks than the Asian Americans. That is, both groups were given a choice what tasks to perform, but only the European Americans picked tasks that made them happy.

Given a choice, why would anyone not choose to do what makes them happy?

Unfortunately, not everyone in this strange world has the option of fully playing to their strengths. It seems in many cases the reasons for that are economic. I would guess the need to earn a living, combined with a lack of opportunities for doing so, has probably forced more people into jobs and lives that play to their weaknesses than perhaps any other single factor. Just imagine how many immensely talented people in the long course of human history have been street beggars because the society and economy they lived in provided them with little or no opportunity to do anything else! Yet, even in wealthy nations today many people find themselves going into jobs where they cannot make full use of their talents and skills, but must to one great extent or another play to their weaknesses.

Besides economics, many social and cultural factors can pressure people into opting for a job or life that does not play to their strengths and leaves them less happy than they would otherwise be. The classic example of that is the social and cultural oppression of women. Until recently, most societies allowed women very few choices in life. And minorities within a society often face similar restrictions.

A third set of factors are probably psychological. A few years ago, the Surgeon General of the United States released a startling report that concluded one in five Americans was mentally or emotionally ill. A symptom of many disorders is anhedonism -- that is, an aversion to pleasure. People who suffer anhedonism are more likely to seek things that make them unhappy than things that make them happy. Although I don't know what percentage of the population suffers from anhedonism, it seems likely enough that it could be a few million of us.

While playing to our strengths is a significant source of happiness, not all of us do so for many and various reasons -- some of which I've touched on.

Sunday, July 22, 2007

Some New Visuals On the Human Prospect

Wondering what the human prospect is these days? You might get some factual insights on that by visiting Trinifar this week.

Trinifar has put together some beautiful graphs showing major ecological, demographic and economic trends in a post on "visualizing sustainability". He then briefly explains each graph in clear, non-technical terms.

Especially worth noting I think are the estimates that the world population of humans will reach 9 billion by 2050, while the maximum sustainable population is estimated between one and three billion. If anything even remotely like that occurs (and something remotely like that seems very likely) some environmental resources will be exhausted by the excess population, perhaps leading to a reduction in the number of people who can live on the earth in a sustainable fashion. That's just about the mildest effect such a disaster will have on the human prospect.

The effect of too many people and too few resources that concerns me most is political and spiritual. Huge numbers of people competing for diminishing resources is quite likely to lead to repressive societies. Then what happens? Will humanities' potential for authentic happiness ever be realized? Will most of us be able to appreciably develop our talents and skills, or stay true to ourselves? Or will only the tiny elite that controls the world's resources have decent lives?

I am reasonably confident that in the long run, the human spirit will rebound. But the long run could take centuries to be realized.

Friday, March 30, 2007

Fun Income Facts

Earlier this year, I listened to a bimbo talk show host tell his audience that worker's incomes in America had risen during the prior year by four percent.

What he didn't mention is that most of that raise went to the very top percentage of workers. He also failed to mention that in the U.S., folks like Bill Gates are counted as "workers" because they run their own companies.

This morning, The New York Times published an analysis of the Internal Revenue Service's income data for 2005 -- the most recent year for which there is complete data. From the Times article:

Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.

The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression.

While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.

The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.

The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.
So, there you have it. Once again, the rich got richer and the poor got poorer.

Wednesday, March 28, 2007

The Future of News in a Market Driven Economy

Legend has it that before Ted Turner opened the doors of CNN some many years ago, he first did something that was unprecedented for a news organization: market research. That is, until Turner came along, no news organization in history had thought to ask people what kind of news they wanted to see.

Instead, the traditional news organizations had relied on the judgment of their professional news staff to determine what was newsworthy and what was not. But Turner changed all that with the success of CNN. We largely owe to him the fact that a major news organization nowadays will break away from a White House press briefing to report a car chase. It’s the market these days, and not the news staff, that for the most part decides what is newsworthy.

That’s the legend. No doubt the truth is more complex, more nuanced. There are probably several factors that play a role in what becomes news. Yet, no one living in the 21st Century can any longer doubt the news is heavily influenced by what the market wants to hear. And in an ideal world, that would be a good thing.

Consider what has happened to most consumer products over the years largely due to the attention that corporations now pay to market demand. Products overall have improved in quality and features, while coming down in price. Anyone could give examples of that. In a competitive market driven economy, the consumer is king and queen. The corporation doesn’t decide what’s good enough for you. Not if it wants a successful brand. You have choices. If one corporation won’t produce a higher quality brand with more features at a lower price, another one will. That’s the case in most industries nowadays, but is it the case in the news industry?

In an ideal world, a competitive consumer driven news industry would translate into more news, higher quality news, and all of that at a lower price to the consumer. In some ways, that’s exactly what has happened.

News is far more available today than it was thirty years ago when most people had their choices limited to three TV networks, one or two local newspapers, a handful of national newspapers, and several magazines. Today, we are flooded with news outlets. The price of most newspapers and magazines has dropped too, at least in terms of percent of income. That leaves us with quality. Has it gone up?

Of course, that depends on what you mean by quality. The news industry is no different than any other industry: Quality is what the consumers think of as quality. Quality has indeed gone up – in the minds of most consumers. And therein lies the problem.

What the market thinks of as quality news is problematic for anyone concerned with truth, for truth is not what the market thinks of as quality. If that’s the case, then what does the market think of as quality?

So far as I know, no one has yet come up with an exact term for what the market thinks of as quality when it comes to the news. The best I can do is a phrase: “comfortably entertaining”. That phrase covers the two things people most demand these days when it comes to what they will consider quality news. The word “entertaining” is self-explanatory. So, let’s deal with “comfort”.

People want their news to be comfortable in the sense they want it to confirm their existing view of the world. They certainly don’t want it to throw them to the wolves of doubt, uncertainty, and confusion. Unfortunately, the truth can do that at times. And when that happens, the truth – increasingly – gets thrown overboard to make room for what the market really wants, and what it really considers high quality news: comfortable entertainment.

None of this is going to change. On the contrary, it will almost certainly accelerate. As the news industry becomes increasingly more sophisticated in gathering data on what the market wants, we will see the most popular news brands become increasingly divorced from truth. To be sure, they will retain the semblance of truth in their reports, but the substance will be largely purged. In the end, it will only be news outlets that cater to limited niche markets that accurately and honestly report the news. Those “high-end” outlets will have nowhere near the demand for them as the mainstream outlets. At best, those high-end outlets will be just as respected for quality – and just as unpopular with the majority of consumers – as is Mercedes Benz in automobiles.