Four millenia ago, the civilized world was dominated by the great bronze age empires. The Hittites ruled an empire stretching from the fertile crescent to the Bosporus; Egypt was a bronze age superpower; half way around the world, ancient China was unified under the Shang dynasty. These empires had similar political organizations: a ruler that was more than an ordinary king - an emperor or great king or god king - ruling through a well established bureaucracy, supported through exhaustively recorded taxes, maintaining his rule through large, well organized armies centered on elite warriors on chariots, usually led in war by the great king himself.
At the end of the bronze age, these empires collapsed, and were followed by a dark age that lasted four centuries. Throughout the following iron age, the world was dominated by relatively small kingdoms. Even when the Roman empire eventually rose, it never achieved the centralized control of the bronze age empires; rather, it maintained its trade empire largely by granting a high degree of independence to its territories.
Why the difference? Why do we have tablets showing that the central governments of the bronze age tracked taxes down to the individual farm, while in the iron age, anything larger than a small kingdom delegated authority through some form of feudalism, giving nobles and governors a free hand in the management of their territories?
The answer lies in the differences between the military technologies.
Bronze age weapons were made of bronze - an alloy requiring both copper and tin. Copper and tin are not common in the earth's crust, and deposits are widely spaced geographically. For a state to be able to manufacture weapons at will - necessary to avoid destruction at the hands of invaders - it had to have access to both copper and tin; with such access, it could claim large expanses of surrounding land. The Hittite empire arose near sources of copper at Isuwa and of tin at Kultepe, both in what is now central Turkey; the Shang dynasty was named for their copper and exploited nearby small sources of tin in the Yellow River valley, allowing them to expand until they had trade access to the much larger tin deposits of what is now southern China; Egypt's Nile river connected copper mines in the Sinai with tin sources near Aswan. Control of the ingredients for bronze allowed these empires to expand until they ran into other empires with similar resources; thus, the Hittites and the Egyptians expanded until they met in the Levant, battling over a constantly shifting border there.
In constrast, iron ore deposits are common - iron is hundreds of times more common than copper in the earth's crust, and more than 10,000 times more common than tin - and iron does not require alloying elements. Locals could easily manufacture their own arms for a rebellion against a distant central government. As a result, the natural political organization changed in the iron age, from large central governments to small local governments, either in the form of independent kingdoms or principalities, or as territories of an empire with a high degree of independence.
Throughout the iron age, however, local power was usually still vested in a military elite, and the ruler was still usually a military leader, for the same reason that had been true in the bronze age: the weapons were melee weapons and bows, which required strength and years of training to use effectively. Armies continued to be composed of specialized warriors comprising a small fraction of the population. The common man continued to be a subservient peasant or slave.
That changed with the invention of firearms. Now, any person could become militarily useful with minimal training and a firearm. The common man, previously useful to the state only for producing food or other goods, was now also useful in war. And since it was not possible to put a firearm in the hands of the common man without his becoming a threat to the elites, the elites ceded political power - by choice or force - to the common man, in the form of democracy.
The Civil War serves as a good illustration of the connection between democracy, firearms, and strength in war. The Confederacy's slave population did not have the voting franchise, and was kept disarmed for fear of revolt. That meant one third of its population could not be drawn on for service in the army. The Union did not face the same constraints, which contributed to its victory in the war.
Expansion of the voting franchise paralleled increases in the size of wartime armies. Great Britain, for example, had a peak of about 3% of its population under arms during the Napoleonic Wars. Subsequently, the first Reform Act extended the voting franchise to about 10% of the adult population and began the process of distributing parliamentary seats in proportion to population. The franchise was further extended in several stages over the following century. At the end of WWI, in which Great Britain had a peak of about 10% of the population under arms, the franchise was extended to almost 50% of the population, including most adults, with subsequent extension to all adults.
Many people blithely assume that democracy arose through a natural progression toward more advanced forms of government. However, the pendulum swing from bronze age bureaucracy, to iron age decentralization, and back to modern bureacratic government, shows that advancement is not a clearly unidirectional arrow. The actual reason we moved to democracy was because firearms democratized martial power; political power merely followed.
The following graph of Greek bank deposits over the past 10 years sheds light on what economic policies actually work, and what policies do not work, in this case, with respect to the confidence of bank depositors.
Half way through the graph, in 2009, the financial crisis hit Greece and deposits started falling. Thereafter, three policies were attempted, with the following effects.
1. The initial bailout in 2010, accompanied by austerity measures cutting government spending and increasing tax rates, did not stem the losses; the losses continued at the same or a greater rate.
2. New Democracy's election victory in June 2012 on a supply side platform - cutting government spending but decreasing tax rates - immediately reversed the bank deposit losses and stabilized deposits.
3. SYRIZA's election victory in January 2015 on a neokeynesian platform - increasing government spending, with neutral tax policies - resulted in renewed withdrawals of bank deposits.
It's not entirely clear how much of the bank deposit withdrawals are due to capital flight - the sudden shifts suggest most of it - and how much due to spending of savings during recessionary periods, which may have had some effect as well. Either way, though, the data is additional evidence that supply side policies work better than either pure austerity or neokeynesian economics.
Graph from Wall Street Journal article:
Putin has not been seen in public for 8 days, long enough for many to wonder where he is, and for the Kremlin to deny rumors of illness. Here are things that suggest all is not well with Putin - or with the Russian establishment.
1. The Kremlin's claims that Putin was fine were accompanied by photographs from a meeting from the previous week, a fact that was promptly discovered.
It's hard to believe that Putin would permit such an easily falsifiable story if he were still firmly in charge.
2. When insisting that Putin is healthy, Putin's spokesperson Dmitry Peskov appeared a bit unprofessional in an open shirt and no tie, in contrast to his normally highly professional appearance. He always looks cadaverous, but his manner was downcast and hesitant, as opposed to his normal confident manner.
as compared to:
3. The "Putin is dead" hashtag appears to be much more prevalent within Russia than without. If false, one would normally expect such a hashtag to be more common outside Russia, where there are many who would be happy to see Putin dead, than within Russia, where Putin is highly popular. However, those within Russia are closer to the situation and closer to any who know the truth.
4. There are reports from what appears to be a reasonably reliable news site that an announcement of Putin's death briefly appeared on Prime Minister Medvedev's web site.
If Putin is dead or incapacitated, how did it happen? If the hardliners had murdered Nemtsov and Putin in preparation for a coup, it's hard to believe they would wait over a week to take further action. Putin might have had a debilitating stroke, though the temporal proximity to the Nemtsov assassination seems a bit of a coincidence. Putin being assassinated in retaliation for the Nemtsov murder would also explain the temporary paralysis of the Russian leadership as they kept checking over their shoulders, though one would think that getting through Putin's personal security would be no easy task.
Of course, it's always possible - albeit unlikely - that European rumors are true that Putin went to Switzerland to be at the birth of a love child with his rumored girlfriend Alina Kabaeva. None of the possibilities seem especially likely, but it's hard to eliminate any of them as impossible. Even after Putin reappears - alive or dead - we may not know what actually happened.
When last I wrote on Greece, in 2012, there had just been elections that resulted in a change of power from the Panhellenic Socialist Movement - which had negotiated a government bailout and austerity package responsible for cutting the size of the Greek economy by one quarter - to New Democracy, which advocated a policy of growth through tax cuts.
Subsequent to the election, New Democracy was not immediately able to implement tax cuts, due to the focus on additional austerity measures - that is, budget cuts and tax increases - from the European Union. However, New Democracy was able to ensure that the additional austerity measures consisted of budget cuts, and not tax increases.
Without additional tax increases further dragging down the economy, and with very large government budget cuts, the Greek government posted a "primary budget surplus" - basically a surplus before interest payments - the next year, a year earlier than expected. With this success under its belt, New Democracy was able to negotiate a reduction in the Value Added Tax for hotels and restaurants from 23% to 13%.
The reduction in the VAT was equivalent to a price reduction of 8% across the board for hotels and restaurants. With Greece suddenly a much less expensive place to vacation, tourism surged. This resulted in a turnaround in Greece's economy, which in 2014 is now on track to become one of the fastest growing economies in the eurozone. This is the economy that, four years ago, was thought to be causing the entire eurozone to collapse.
This near miraculous turnaround shows, yet again, that cuts in government spending do not prevent economic growth, and that cuts in tax rates promote that growth. Hopefully policy makers everywhere are paying attention: if you want your economy to grow, cut government spending and cut tax rates.
I also hope the voters in Greece are paying attention to who brought off this miracle, for their own good.
Previous article on 2012 Greek elections:
Article on 2013 tax cuts:
Article on 2014 economic growth:
When I cite a news article, I almost never cite The New York Times. There is a reason for this. The reason is that New York Times articles are long, detailed, well written - and carefully crafted to present only one side of the story. In more plebeian sources, one sidedness is often easily detected, but in the New York Times, the level of detail and the writing skill are very effective in lulling the reader into thinking they are getting the whole story - when in fact they are getting only half the story, if that.
The most recent New York Times article I read, forwarded by a good friend, is a case in point. The article is on the finding of Denisovan DNA in 400,000 year old femurs in Spain, previously thought to be from ancestors of Neanderthals. Since the DNA is Denisovan rather than Neanderthal, they conclude that the fossils, instead of coming from a Neanderthal ancestor, instead indicate that Neanderthals later replaced the preexisting population of Denisovans. It's a pretty convincing argument, if all you read is that article from The New York Times.
( The problem is ...Collapse )
Economists have finally shown why the Great Depression continued for so long. It was government policy: specifically, FDR's policies that interfered with the free market, just as many of us suspected all along.
I was working late, when I heard repeated sniffling from upstairs. After a while I went to investigate, and sitting huddled on the top stair was Margaret, miserably sick with a cold. I sat a stair or two down to be closer to her level and hugged her, and she held me hard.
I got her to lie down on the couch in the back room by promising to sit with her, got some tissues for her, and sat next to her for a few minutes. Then, when it became clear that she just wanted my presence and not my active attention, and after getting her permission, I went downstairs to retrieve my laptop, and then came back up to continue my work sitting next to her.
Eventually her sniffles subsided and she managed to get to sleep. I couldn't make her cold go away, but at least I was able to make her less miserable.
I think that's what parenting is all about.
As expected, but contrary to press hysteria, Twinkies and other Hostess products are being manufactured again. Two private equity firms bought the rights to most of the snack products - and also bought four of their bakeries - and they will be available again at most outlets on Monday.
Those who followed the bankruptcy last November will remember that the proximate reason for Hostess's Chapter 7 liquidation was the refusal on the part of their bakers' union to accept a new contract imposed under Chapter 11 reorganization. The underlying cause, however, was more an issue of union work rules on the part of the Teamsters - rules that, for example, required different products to be delivered on different trucks, resulting in substantial inefficiency. Basically the bakers' union didn't want to pay for the inefficiency caused by the Teamsters.
The new Hostess doesn't employ truck drivers at all. Instead, they contract out delivery to third parties. Not only does this permit the third parties to be more efficient, but it permits Hostess to deliver to more than twice as many stores - obviously a substantial benefit to the company.
They do still employ bakers - two shifts of them, at the moment - but the lack of union rules facilitates plans to invest in the bakeries and make them more efficient. Those efficiencies have permitted Hostess to switch to higher quality ingredients - their ingredient costs are up 9% - and perhaps eventually to scale back to a single shift.
Ultimately this is a success story. Inefficient practices that accumulated during good times are being trimmed out in favor of more efficient practices, which will ultimately provide the consumer with a better value for the next business cycle. This illustrates why the economy needs a recession now and then: to work out inefficiencies that are unsustainable in the long run. Now if only we would manage the recessions to promote the necessary restructuring, instead of dragging them out by trying to preserve the status quo, we could get the bad times over with more quickly.
Hostess products available Monday:
More detail on how the new Hostess is organized:
Google+ is more featureful, yes. However, its problems with eventual consistency - which manifest as posts and comments disappearing and reappearing at random - are a major pain. I've commented on a few occasions to friends there that Google+ really needs user affinity to solve that.
Livejournal doesn't have those problems. As it turns out, that's because Livejournal has user affinity by cluster:
Okay, their clustering is a little primitive, as restores appear to require manual intervention. Google should just buy Livejournal, fix those implementation issues, and replace Google+ with it.