Following up on her piece in the New Yorker on how hedge fund billionaires have become disillusioned with President Obama, Chrystia Freeland says that the 1% are repeating a mistake made many times throughout history of moving from an inclusive economic system to an extractive one.
Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness.
Freeland is riffing on an argument forwarded by Daron Acemoglu and James Robinson in Why Nations Fail. Their chief example cited by Freeland is that of Venice:
In the early 14th century, Venice was one of the richest cities in Europe. At the heart of its economy was the colleganza, a basic form of joint-stock company created to finance a single trade expedition. The brilliance of the colleganza was that it opened the economy to new entrants, allowing risk-taking entrepreneurs to share in the financial upside with the established businessmen who financed their merchant voyages.
Venice’s elites were the chief beneficiaries. Like all open economies, theirs was turbulent. Today, we think of social mobility as a good thing. But if you are on top, mobility also means competition. In 1315, when the Venetian city-state was at the height of its economic powers, the upper class acted to lock in its privileges, putting a formal stop to social mobility with the publication of the Libro d’Oro, or Book of Gold, an official register of the nobility. If you weren’t on it, you couldn’t join the ruling oligarchy.
The political shift, which had begun nearly two decades earlier, was so striking a change that the Venetians gave it a name: La Serrata, or the closure. It wasn’t long before the political Serrata became an economic one, too. Under the control of the oligarchs, Venice gradually cut off commercial opportunities for new entrants. Eventually, the colleganza was banned. The reigning elites were acting in their immediate self-interest, but in the longer term, La Serrata was the beginning of the end for them, and for Venetian prosperity more generally. By 1500, Venice’s population was smaller than it had been in 1330. In the 17th and 18th centuries, as the rest of Europe grew, the city continued to shrink.
BTW, Acemoglu and Robinson have been going back and forth with Jared Diamond about the latter’s geographical hypothesis for national differences in prosperity forwarded in Guns, Germs, and Steel. I read 36% of Why Nations Fail earlier in the year…I should pick it back up again.
Jared Diamond has come to believe that some large multinational companies (like Chevron, Wal-Mart, and Coca-Cola) are “among the world’s strongest positive forces for environmental sustainability”.
The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image — one attained by, say, avoiding oil spills and other environmental disasters — reduces criticism from employees, consumers and government.
Last week, the Financial Times had lunch with Jared Diamond.
“Was it a cultural choice that the Inuit up in the Arctic did not become farmers? No, it wasn’t. You could not have agriculture in the Arctic,” he bristles. “So it seems to me that the rise of agriculture in the modern world really does involve strong environmental influences. And if you want to call that geographical determinism, you can call it geographical determinism.
The New Yorker is being sued for $10 million over a story written by Jared Diamond. The fascinating story, Vengeance Is Ours, tells of blood feuds in New Guinea and now two of the men described in the article as participating in those feuds say they have been falsely accused of “serious criminal activity” and “murder”.
When foreigners come to our culture, we tell stories as entertainment. Daniel’s stories were not serious narrative, and Daniel had no idea he was being interviewed for publication. He has never killed anyone or raped a woman. He certainly has never stolen a pig.
I get the impression that Diamond has spent a lot of time in Papua New Guinea and, as a result, might not be taken in so easily by locals telling tall tales. Indeed, a fact-checking research team was told by one of the men in question that “the stories he told Diamond were in fact true”.
Jared Diamond wrote a fascinating article in last week’s New Yorker about vengeance. On one of his trips to Papua New Guinea, he met a man named Daniel who had been responsible for “organizing the revenge” against the man who killed his paternal uncle Soll. (Incidentally, Soll’s killer was also an uncle of Daniel’s.)
Among Highland clans, each killing demands a revenge killing, so that a war goes on and on, unless political considerations cause it to be settled, or unless one clan is wiped out or flees. When I asked Daniel how the war that claimed his uncle’s life began, he answered, “The original cause of the wars between the Handa and Ombal clans was a pig that ruined a garden.” Surprisingly to outsiders, most Highland wars start ostensibly as a dispute over either pigs or women. Anthropologists debate whether the wars really arise from some deeper lying ultimate cause, such as land or population pressure, but the participants, when they are asked to name a cause, usually point to a woman or a pig.
The process of vengeance is very important to the people living in this region of New Guinea; people there speak openly of revenge killings as Americans might speak of friendships and family. Diamond argues that the New Guineans’ everyday open embrace of such a strong emotion is not necessarily a bad thing and that modern society can circumvent people’s need for vengeance, resulting in feelings of dissatisfaction that can create unbalanced emotional lives. At the end of WWII, Diamond’s father-in-law had a chance to take his revenge on someone who had killed his mother, sister, and niece but was persuaded to turn the man over to the new Polish government for punishment. The man was never charged with the crime and Diamond’s father-in-law was never the same.
One day, he took out a sheaf of photographs and showed [his daughter] Marie a picture of three shallow excavations in a forest: the photo that he had taken of the graves of his mother, sister, and niece. Then, for the first time, he told Marie the story of how he discovered what had happened to them, and of his release of their killer. Once, when he was about ninety years old, he recounted the story to Marie and me together. I recall his talking in an emotionally flat, distant, storytelling way, as if he no longer attached feelings to the story. In fact, his distanced manner must have been a tightly controlled act, a way of preserving his sanity while living with his memories.
Is the search for aliens such a good idea? If/when we find evidence of extraterrestrial intelligent life, will they welcome us as neighbors, treat us as vermin in their universe or something inbetween? “Jared Diamond, professor of evolutionary biology and Pulitzer Prize winner, says: ‘Those astronomers now preparing again to beam radio signals out to hoped-for extraterrestrials are naive, even dangerous.’”
Jared Diamond calls agriculture “the worst mistake in the history of the human race”. “With the advent of agriculture [the] elite became better off, but most people became worse off”.
Jared Diamond has written a fantastic book that lays out in simple terms how Europeans came to dominate the rest of the world without resorting to racist notions of Europeans being intrinsically smarter or more gifted than the inhabitants of the rest of the world. Diamond’s thesis is so simple and powerful, it seems, as Erdos would say, to come from “God’s book of proofs”. An illustration of this powerful simplicity is how the orientation of the continents affected the spread of domestication of crops, animals, germs, and ideas (which in turn influenced how fast difference cultures matured):
Why was the spread of crops from the Fertile Crescent so rapid? The answer partly depends on that east-west axis of Eurasia with which I opened this chapter. Localities distributed east and west of each other at the same latitude share exactly the same day length and its seasonal variations. To a lesser degree, they also tend to share similar diseases, regimes of temperature and rainfall, and habitats or biomes (types of vegetation). That’s part of the reason why Fertile Crescent [crops and animals] spread west and east so rapidly: they were already well adapted to the climates of the regions to which they were spreading.