The Secret of our Success, by Joseph Henrich

Joseph Henrich's The Secret of Our Success has a fair amount of overlap with Herculano-Houzel's The Human Advantage, which I reviewed in July. Both spend most of their attention on explaining why humans, of all the products of evolution, turned out to be the smartest and hence dominant species on the planet. The Human Advantage focused on what makes the human brain unique, and found some surprising neuronal traits that sets mammals apart from other other animals, and that make primates unique among mammals in their neuronal architecture. Henrich, on the other hand, takes pains to point out that individual humans (even very smart ones) aren't very good at figuring out how to survive in new environments. He uses that evidence to argue that communication and culture make the difference. As individuals, he claims, we aren't much smarter than other primates.

They both agree that cooking was a huge step forward for us, but Henrich takes pains to point out that this only an advantage when we're raised in a cultural group. Unlike practically all other animals, we don't instintively know how to unlock the nutrition in common foodstuffs—without training, it would take a long time (during which you have to be subsisting on something else) to figure out how to prepare most of what we eat.

The book starts out with several stories about lost european explorers becoming stranded, and if they didn't get help from locals, they would starve in the midst of what the locals would consider plenty. In Australia, the Arctic, and Florida, well-funded and trained explorers slowly starved because they couldn't figure out how to find, harvest, or prepare the foods the locals subsisted on, and they either didn't think to ask for help, or they drove away those who tried to help them. In contrast, there are a couple of stories of individual aborigines who are separated from their kin, and do just fine for years, since they grew up gathering and preparing the local bounty. His point is that our strength, as a species, is learning from one another, and picking up on every small increment in survivability.

I've been saying for years (since reading Jared Diamond's Guns, Germs, and Steel) that the thing to realize about the spread of humans and their ability to make use of local flora and fauna is that there were enough people, and people are curious enough that we tried to exploit everything, and we tried to make use of everything available in all conceivable ways. How else to explain the fact that people ate acorns, seal livers, and nardoo. In preparing nardoo, the Australian aborigines grind seeds, leech them with water, mix them with ash during heating, and use mussell shells to serve them. If you miss any step, then like the explorers, you'll die of poisoning or stavation with a full belly.

Along the way, this book has lots of interesting proposals about how culture affects prestige and dominance in ways that make it possible for us to live in larger groups and take advantage of the skills and abilities of more people; how competition for living space between groups leads to cultural differences, and how our ability and drive to share culture and learn from each other leads to increasing communication abilties and common grammar strength across the species. There are interesting tidbits spread throughout.

In talking about how living in larger groups with a larger repertoire of tools and techniques make us more capable without requiring more individual smarts or inventiveness, Henrich gave a list of simple tools that is more interesting than the standard list of 6 simple machines known since antiquity:

wheels, pulleys, springs, screws, projectiles, elastically stored energy (e.g. bows, spring traps), levers, poisons, compressed air (blow guns), rafts, leisters [a barbed spear], and heating (fire and coooking).

Instead of focusing on mechanical advantage as we do with the simple machines, this focuses on shared, reusable knowledge, and shows that there were ideas around to be re-used even in societies that were very primitive by modern standards.

Henrich has a longer more detailed time-line than Herculan-Houzel, and his focuses on evidence about tool use showing accumulation of culture rather than archeological evidence relating to brain size, cooking, and gut size. I enjoyed this book as much as Human Advantage, and it added an interesting, non-conflicting story about the roots of our intelligence. It didn't feel as if it has as much relevance to the question about our place in the universe—once we set out on the path toward communication and shared culture, Henrich didn't mention further roadblocks toward increasing advantage as we exploited the new niche better.

0.3productChris Hibbert

Ex Urbe on Machiavelli

I just read a five part sequence (Thanks Scott) by Ada Palmer on Machiavelli that is extremely well-written and very effective. Part one gives the context of Machiavelli's work, and explains how important Florence was to him and why that continues to matter to us. Palmer doesn't spend much virtual ink actually justifying Machiavelli as a hero, rather she explains the dire situation Florence was in, and how and why that mattered to Machiavelli.

She ends the first part of the series by giving him as great an accolade as she can imagine. You know the parlor game in which you imagine sending a message back to some past historical figure on their deathbed (not in order to change history, but to tell them that they made a difference)? She would take that opportunity to reassure Machiavelli that his beloved Florence continues to flourish and is held in such high esteem that (by the UNESCO World Heritage Convention) "it is on the list of places [that] all the powers of the Earth have agreed to protect with all their resources."

In the next three or four parts, Palmer explains and justifies her claim that Machiavelli invented modern Political Science and the modern approach to ethics. It's well worth reading.

Steven Pinker: The Better Angels of Our Nature

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Chris Hibbert

Steven Pinker's The Better Angels of our Nature argues that violence has been declining over the last several centuries, and continues to decline, even though the common wisdom seems to say the opposite. Pinker marshalls an enormous quantity of data to buttress his story, and fills in with enough explanation to make a very convincing case. At the end, he tries to explain this long term trend, and comes up with several mechanisms, but since this section is less data driven, it's less convincing than the fact that the change is broad, pervasive, and has continued for a very long time.

Pinker starts out with wars, genocide, and other large scale killings. He amasses a dataset of all known mass killings before the modern age. The data is spotty, so it's hard to draw many conclusions, but it is clear that the distant past included its share of conflicts resulting in lots of deaths, and the twentieth century's war are memorable more for their recency than their scale. In addition, there's a pretty clear trend that the great power conflicts of the early twentieth have disappeared. At the end of his chapter on the Long Peace, Pinker points out that since the end of WWII there have been zero:

1. nuclear weapons used
   
2. battlefield fights between great powers
   
3. armies crossing the Rhine (longest interval since 200 BCE)
   
4. wars between european states
   
5. wars between developed countries anywhere in the world
   
6. territorial expansions by conquest for a developed country
   

As we're getting close to 50 or 60 years without a conflict between major powers, it becomes more plausible that it's a trend rather than an aberration.

From large-scale conflicts, Pinker moves on to socially-approved violence, and then to individual violence. Socially-approved violence includes things like slavery and wide-spread repression as of jews and gays as well as public execution and public torture and punishment. All these have gone from common to unacceptable over the long term. Pinker shows that, in parallel with granting rights to more and more groups the statistics on personal violence in a very broad range of contexts have been declining. Historic attitudes toward blacks, women, gays, ethnic groups, children, and animals have all changed dramatically.

Finally, Pinker tries to figure out what's been driving this change. He starts out by describing some broad trends: The Long Peace, and The Rights Revolution, but he admits they're just names, not a description of causes. From there he looks for factors that could have caused these trends. Empathy may have been increased because of the spread of literacy and mass entertainment that give us more access to other points of view. Self control, likewise may have been improved by the promulgation of personal habits that enable people to make their short-term desires subservient to their longer-range goals. He considers biological evolution, but concludes that while it would have been capable of producing a change, we don't have any evidence for the hypothesis. Next Pinker discusses whether humanity's moral sense or rationality has improved in some way to produce the improvement. He accepts that people are getting smarter (i.e. "the Flynn effect") and argues that once we reach a certain level, we can use reason to see that cooperation is more in our interest than violence, first at the personal level, and gradually at broader levels on interaction.

Finally, Pinker presents a framework for thinking about how various changes have impacted people's incentive structures, and what consequences they have for interactions. It's all based on the basic prisoner's dilemma payoff matrix, showing the options two parties face when they can make independent choices as they interact. The first version is called the Pacifist's dilemma, and shows that wars and fights are costly, but it's better to be the aggressor than the defeated. A second shows that "Leviathan" (a government) can change everyone's incentives by penalizing agression. Next is a chart showing that trade ("Gentle Commerce") improves things for everyone by improving the payoffs as long as agression is avoided. His final chart assumes that empathy and reason are added in, and everyone feels not only their own gains and losses, but those of the other party as well. At that point only positive sum outcomes make sense, since each player gains no advantage by imposing costs that are felt by both sides.

This model is plausible, but not compelling. Something like this might be going on, but it's hard to say that he's actually found the mechanism driving things. An interesting postscript is provided by Nassim Nicholas Taleb, who argues that Pinker doesn't understand the statistics of the fat tail that Taleb has been writing about for a while. If the proper curve is not a normal distribution, but instead a fat-tailed curve with most of the weight in the extremes, then the stats demonstrating that there is an effect to be explained are worthless. Taleb gives a bunch of (not well-explained) possible mechanisms for supposing that Pinker might have missed something, but he doesn't analyze whether the historical data looks more like a normal distribution or a fat-tail distribution. I suspect that the near-constant level of violence in the past makes Pinker's position more believable that violence has in fact gone down. It's possible that large-scale conflicts will occasionally arise with enormous body counts, but the drop in violence on all lesser scales doesn't seem likely to be reversed, and that doesn't seem consistent with Taleb's models of financial system variability.

Overall, the book provides good news, and more fodder I can use to try to convince people that what appears in the news is exceptions rather than trends.

A Connecticut Yankee in King Arthur's Court, Mark Twain

0.3

Chris Hibbert

Mark Twain's A Connecticut Yankee in King Arthur's Court was a joyous discovery for me. I have long been aware of the story, but didn't have any expectations about it beyond what's obvious from the title. When I started reading it, I discovered that Twain used a simple scenario to explore problems of government and to illustrate freedom's benefits over coercion. Twain's penchant for stories celebrating individual endeavor drives this story.

The Connecticut Yankee is Hank Morgan, a blacksmith and horse doctor, who gets knocked out in a fight and awakens in King Arthur's England. Morgan quickly realizes that with his "modern" knowledge, he can do things the people around him won't understand, and he can use this to gain power that he can use to accelerate progress and bring about an early renaissance. Morgan's concerns are education, sanitation, and preparing the people for democracy. It doesn't take him long to figure out that they aren't ready, but he maintains his confidence that it's only a matter of time and education. He is convinced that once they come to see that the nobles are people, too that they'll be willing and able to govern themselves. In the end, he decides that it isn't the people who are the obstacle, but the hereditary aristocracy who can't learn that they aren't different. I suspect Twain was insinuating that the government of his day was composed of people who thought they were naturally suited to manage other people's lives.

Morgan starts out by gaining King Arthur's trust by recognizing the date of his scheduled execution at the court of King Arthur as the day of a lunar eclipse, and pretending to be a mighty wizard (in competition with Merlin) who can control the Sun. Once he has access to Arthur, he uses his understanding of modern science and manufacturing techniques to develop tools and processes that give him real powers to do things none around him know how to do. He then sets about reforming the country by vanquishing individual knights and setting them to tasks like promoting the use of soap that will completely remake society.

Along the way Morgan has to battle superstition, lack of critical thinking, learned helplessness, and many other obstacles. He builds a corps of youngsters who attend his secret schools and man his secret factories to turn out a long list of products that will improve people's lives.

The story is by modern standards closer to fantasy than science fiction, but Twain clearly intended to make the technology development plausible. There are times when his hero takes shortcuts that modern understanding makes obvious, but were probably less clear in Twain's time. For instance, Morgan's first miracle after calling the eclipse is to blow up Merlin's tower, for which he needs dynamite and wire. Twain assumes that making some wire could be done in a couple of weeks starting from scratch, but it without the infrastructure of a manufacturing economy even something so simple would be a lot more work.

I found this a remarkably enjoyable read, and was surprised that Twain covered so much territory. If you can get past the dated prose and Twain's conceit that a single person could manage such a vast enterprise with help only from people who have no concept of the idea of individual initiative, you'll probably enjoy it, too.

The Rational Optimist, Matt Ridley

0.3

Chris Hibbert

Matt Ridley's The Rational Optimist is a very well written ode to the value of trade and how it contributes to a rational confidence that things will continue to improve for humanity as they have since we first appeared in the world.

Ridley's previous books have mostly been on evolution (though that includes the evolution of cooperation and virtue). Here he's focusing on how trade enriches us all, and how far back trading goes. He uncovers new evidence for the richness of trading in antiquity. One example is Oetzi, the mummified ice age hunter revealed by a receding glacier in the alps in 1991:

[He] was carrying as much equipment on him as the hikers who found him. He had tools made of copper, flint, bone and six kinds of wood: ash, viburnum, lime, dogwood, yew and birch. He wore clothes made of woven grass, tree bark, sinew and four kinds of leather: bearskin, deer hide, goat hide and calf skin. He carried two species of fungus, one as medicine, and other as part of a tinder kit that included a dozen plants and pyrite for making sparks.

Ridley's point is that Oetzi couldn't have collected, sewn, tanned, woven, smelted and sharpened everything he carried himself. The only way he could have accumulated so much useful equipment was through trade. I'm used to arguments for the early emergence of trade that show that quantities of obsidian or sea shells was found hundreds or thousands of miles from where it would have been regularly collected, but Ridley goes to great lengths to display evidence that trade was pervasive and that early people everywhere relied on it extensively for many items in their daily repertoire. It wasn't just an occasional trade for a high-value item, it was a part of routine life, and part of what people ate, wore, and used for healing, hunting, and food storage.

Ridley also carefully lays out the case for Ricardo's point that trade makes us all richer. Expanding the extent of trade increases the size of the market; with more people in your trading community, you can draw on the efforts of specialists who multiply the overall productivity you can take advantage of. Ridley argues that the increasing returns from trade taught our ancestors the value of trust and led to to more virtuous interactions, and better ethical instincts among our ancestors.

The underlying point of much of this is that increasing communication, increasing interaction leads to more and better ideas as we recombine the ideas in new ways, and this leads to the production of more wealth. Around the time of Malthus, it was still possible to argue that increasing production of wealth just made it possible for populations to increase, and didn't really make anyone better off. But sometime in the last two hundred years that started to change, and the recent demographic transition has made that position completely untenable. But pessimism is still more widely respected, and Ridley wants us to understand that a reasonable understanding of the sweep of history and of our evolutionary origins makes optimism a much better fit with our circumstances. Things have been getting better for hundreds of years, and while we can imaging things that might change that, none of them seems particularly likely.

More people are moving to cities where they are more productive and have fewer children. They live wealthier lives than before, and insist on and can afford a cleaner environment and healthier lifestyle. Government restrictions could prevent progress, or trap people outside the cities, or make it harder for them to buy the lifestyle and environmental values they will want, but the smart money goes with the trends. Ridley thinks that the pressure for progress will be sufficient to move governments out of the way, and that spontaneous order will enable people to get what they want. Technology will enhance our healthspan, and our ability to travel and communicate will continue to grow. We'll spend less time working and more on other things. China and Brazil will lead the way if politics in the West grows too stifling.

Two Books on Progress: "Farewell to Alms" and "Birth of Plenty"

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Chris Hibbert

I recently read two more books on the question of progress that had very different approaches to the subject. The two were William Bernstein's The Birth of Plenty , and Gregory Clark's A Farewell to Alms. (Marginal Revolution had a long discussion on the latter book. It's worth reading if you have time.)

Clark's main argument is reasonably straightforward: Before the industrial revolution, the world's economies were all caught in a malthusian trap: any increase in productivity increased population and drove living standards down. The only (short-term) changes that improved living standards were things that reduced population: war, famine, disease. There was a gradual accretion of technological improvements over time, and something switched over in the 16th or 17th century in Europe (and later elsewhere) leading to a situation in which progress was substantial enough that societies left the malthusian trap, and people gradually became richer. The key according to Clark was that in the malthusian era in England, the wealthy were out-reproducing the poor, causing a general downward mobility, which spread the social mores (and possibly the genes) for more productive behavior more widely there. It's crucial to the argument that in England commerce was the road to wealth, so the values and behavior that were spreading were those that are the foundational for commercial and entrepreneurial success.

Bernstein's story isn't as deep; he's interested in intermediate causes rather than root causes. Bernstein argues that economic growth occurs only when four institutions are all present in a society: property rights, the scientific worldview, access to capital, and high-speed communication. He provides a very engaging account of the history of these institutions, and a plausible argument that they are associated with growth, but the evidence that they are both necessary and sufficient is lacking. As history, I found the book to be very well written. Bernstein depicts several episodes in history quite colorfully: the sprint from the invention of telegraphy in the 1830s to stock tickers in 1867 was wonderful. His evidence that the US victory over Japan in the Pacific was dominated by productivity differences is also convincing. The two nations had roughly equal fleets at the beginning of the war, and the early battles caused attrition to each that were due to the vagaries of fate and individual commanders. But four years later, the Japanese had built two new carriers to shore up their losses, and the US had built sixteen. In smaller ships, the US was outproducing the Japanese at a much higher rate. At that point, fate and individual talent stop mattering

Both authors are concerned with the now omnipresent question raised by Diamond in Guns, Germs and Steel: why in some places and not others; why did those particular countries come out on top, and what could the developing countries do to catch up? Bernstein says that development of the four institutions is all it takes. Of course, prescribing it is easier than implementing it, and the biggest step missing from his argument is evidence that it's possible for a country to decide to take this path and succeed. According to the evidence he marshals, it has only happened in the past when the institutional framework was nearly complete, and the missing ingredients fell into place by happenstance. This makes it sound like an experiment worth trying, if there were a country on the verge of having that set of institutions, and the political ability to make the changes. But it doesn't seem like a prescription that can (or ought to, at this point) be forced on all underdeveloped nations wholesale.

Clark's answer is more pessimistic (and less culturally neutral.) Some countries' citizens work more efficiently than others. Clark carefully rules out the obvious possible causes: differences in available capital or in training. He's left saying that the difference is in the workers themselves, though it "can be firmly established" that the differences "stem from the local social environment". Although Clark refuses to use the word himself, the conclusion he leads you to is that poor countries have lazy workers. It takes more workers to do the same amount of work, and no amount of training or social pressure seems to change that. Employers have tried a number of tactics, and the only approach that seems to work reliably is to expect it to take two or three people to carry out the tasks that would be done by one worker in a first-world country. Clark is unhappy with the conclusion, and doesn't proffer any explanations of root causes.

My conclusion? Progress was a complex event historically, and there are lots more details to learn. In the contemporary world, there are significant differences between those who continue to advance and those who don't, and we still haven't found a recipe for bridging the gap. We know that it's sometimes possible, but we don't know of any interventions that could even be said to be "likely" to work. There are changes that seem to lead to improvements (improving access to markets, increasing protections for property ownership, better telecommunications and transportation infrastructure) but they don't work reliably, and these aren't simple to achieve. They take time and significant effort, and can be derailed in a variety of unpredictable ways.

The only good news for those below the curve is that progress is usually much faster for those playing catch-up (once they start on the accelerating path).

Learning the World, by Ken MacLeod

Ken MacLeod's new book, Learning the World, is a good first contact story. I didn't like it as much as I've enjoyed his previous stories, but it's still pretty good. Our distant descendents are spreading throughout the galaxy, and have been doing so for thousands of years without encountering anything more advanced than algae, mold, and lichen. There's no FTL travel, but there is serious life extension, so ships are crewed by two generations of travelers: the Founders, and the ship generation. The starship we're focused on has the luck to be the first to encounter an alien race.

The aliens are approximately bat-like flying mammals, though scaled up to human dimensions. They are just reaching their own renaissance, and by happenstance, astronomers cataloging comets catch a glimpse of the starship as it's decelerating into the solar system. This gives them the opportunity to notice the subtle signs of their presence even though the new arrivals try to remain hidden.

The politics onboard the starship involve struggles between factions who want to exploit the planetary system as their plans called for in the absence of intelligent life, and those who think it might be better to hold off and ensure that the first contact results in amicable relations. Complicating all this is that the ship generation has grown up in a post-conflict environment. They understand that there's far more to gain by trade than conquest, and assume that everyone else knows it too. The planet-bound creatures (they call themselves human, so there's no good term for them) have reached a level of sophistication to realize that trade is beneficial, but they don't dare assume that starfarers know it as well. The starfarers bumble in their attempts to unobtrusively survey the planet, and the planet dwellers interpret the signs as preparations for an invasion.

There were several parts of the story that rang wrong for me. A third of the way through the book, one of the ship generation realizes that an encounter so earlier in our expansion through space, and with a race at such a similar level of development implies that intelligence is likely to be ubiquitous. She tries to start a discussion of this point on her blog (I kid you not!) and get people to consider the implications for their approach to expansion, but one member of the Founder generation pooh-poohs the idea, and the subject is dropped until the last two pages of the story. In the crowds I hang out with, this subject has been a hot topic for a while. I can't believe that the subject would disappear in a society as sophisticated as this one is portrayed to be.

I was continually struck, as I watched the planet-dwellers interact and react, by how human they seemed. MacLeod would occasionally point out how, being flyers, they thought tactically in three dimensions; they perch rather than sitting, and do other things to reflect their heritage, but their thinking wasn't at all alien. Maybe I noticed because I'm currently reading (in the background) C. J. Cherryh's Chanur series. There are several alien species, and they're all alien. There seems to be consistent motivation, but they don't act like or think like people. MacLeod's aliens are people in bat-suits. You can see the same effects when the ship generation modify themselves to be more suited to the zero-g areas of the ship. They have different abilities, and react naturally for the shape they've taken on, but they think like people. Oh, well.

I did appreciate the way MacLeod had the characters on the ship dealing explicitly with futures contracts (and prediction markets?) based on changing events. It was clear that planning for development when the crew arrived at a new starsystem was a process of preparing business plans and presenting them to wealthy investors who would chose which opportunities to invest in.

The aspect of the book that caused some discussion in the LFS' finalist committee, considering this book as a candidate for the Prometheus award, was the way the ship cultures imposed their views on the planetary civilization's. The bat creatures have a related species, the trudge, that they use as beasts of burden. There's a smattering of discussion among the bats as to whether the trudge are intelligent enough that this is akin to slavery. As far as I could tell, they could be anywhere from oxen to gorillas. They didn't seem as smart as dogs. But some on the ships are incensed anyway; it's not even clear that they've looked beyond the fact that the starfarers can't distinguish the trudges from the civilized ones. They decide to prohibit slave-holding anyway. But by the time they make the prohibition, they have, apparently as an accidental side-effect of their attempts to hijack local lower creatures in order to communicate and watch the planet-bound, uplifted some of the trudges to sentience. So the question of whether it was slavery or domestication is moot. grumble.

Even with all these complaints, I enjoyed the story. I wouldn't classify it as strongly libertarian, but it did make the list of Prometheus finalists. (I voted for it.) If you're interested, the list of finalists for 2005 (already posted on a couple of other blogs) is as follows:

• Chainfire by Terry Goodkind
• Learning the World by Ken MacLeod
• 47 by Walter Mosley
• The Hidden Family by Charles Stross
• The Black Arrow by Vin Suprynowicz
• RebelFire: Out of the Gray Zone by Claire Wolfe and Aaron Zelman

Yes, that's six finalists rather than the usual five.

And the finalists for Hall of Fame are:

• A Clockwork Orange by Anthony Burgess
• As Easy as A.B.C. by Rudyard Kipling
• It Can't Happen Here by Sinclair Lewis
• V for Vendetta by Alan Moore
• The Lord of the Rings by J.R.R. Tolkien

The awards will be presented at the WorldCon in LA in August.

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The World is Flat, by Thomas Friedman

0.2 Chris Hibbert

I really enjoyed Thomas Friedman's The World is Flat, even though it's talkative, full of anecdotes, and argues for a point of view I already agree with. Friedman has many useful points to make about globalization, and it seems to me that he makes them in a way that could reach many who are opposed or sceptical if they are exposed to the ideas. The fact that the book is on the bestseller list means that there's a chance that many of these people will hear Friedman's arguments.

Friedman's metaphor is that trade is bringing most of the world closer together, leveling the playing field so everyone can be a supplier to everyone else. The effect of this change is that all businesses are getting more efficient, and delivering better value to customers everywhere. As this continues, everyone with access to the global marketplace is being offered more and better goods and services, and is under constant pressure to use those advances to offer more, better, cheaper, faster services to their customers in turn.

This sometimes leads to companies letting some employees go, or even going out of business as they search for more cost-effective ways to serve customers. But that's only a short-term effect, and everyone benefits from the lower prices and improved quality. So everyone is constantly benefiting from the improvements, and many of us take a turn being inconvenienced. But keeping things the same isn't an option, and hasn't been an option for a long time.

Friedman's point is that the right way to think about the effects of international trade is that trade is good for both parties, and for most of the bystanders as well. It's not always easy to see everyone's gain when something particular that you've grown to rely on changes, but it's there if you look for it. Schumpeter used the term "creative destruction" to describe the way the constantly shifting market is always removing old things in order to bring in new and better approaches.

Friedman includes a fair number of helpful hints for individuals and business leaders trying to find a way to survive the constant changes. Above all, he recommends flexibility. You can't be sure which direction the next change will come from, so you need to keep your ability to learn new skills, and you have to have a cushion so you can survive until you've found your next appropriate strength. Always be looking for ways to enhance your contribution to the global marketplace, because others are doing the same, and they will undercut your current approach in a way you weren't expecting.

I like the way Friedman depicts the entire free world as constantly looking for ways to improve life for everyone. As more people from India, China, Russia, and elsewhere find ways to connect into the global economy, they are all constantly finding ways to provide a new valuable service, or to provide an existing good better, faster or cheaper. As he points out, when communism collapsed in the late eighties, it unleashed 1.5 billion people who each had to do something valuable for someone in order to survive.

He also has constructive ways of thinking about what we lose as we face this constant change. He quotes Michael Sandel as telling him

A flat frictionless world is a mixed blessing. It may be good for global business. But it may also pose a threat to the distinctive places and communities that give us our bearings, that locate us in the world. From the first stirrings of capitalism, people have imagined the possibility of the world as a perfect market — unimpeded by protectionist pressures, disparate legal systems, cultural and linguistic differences, or ideological disagreement. But this vision has always bumped up against the world as it actually is — full of sources of friction and inefficiency. Some obstacles to a frictionless global market are truly sources of waste and lost opportunities. But some of these inefficiencies are institutions, habits, cultures, and traditions that people cherish precisely because they reflect non-market values like social cohesion, religious faith, and national pride. If global markets and new communications technologies flatten those differences, we may lose something important. That is why the debate about capitalism has been, from the very beginning, about which frictions, barriers, and boundaries are mere sources of wasted and inefficiency, and which are sources of identity and belonging that we should try to protect.(italics added)

The flattening international economy isn't something that can be stopped — short of a global holocaust of some sort. Understanding its nature and why it sometimes hurts should make it much easier for people to navigate the constantly changing terrain.

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Cell Phones and Economic Growth

There was an article in the Sunday New York Times on the rapid expansion of cell phone use in Africa. (Thanks to Norm Hardy for the pointer.) Many people have commented on the implications of cell phones vs. land lines in developing countries, but a new implication struck me on reading this one.

The general background is that in many developing countries, it's easier to install the infrastructure for cell phones than for land lines. No copper wires required, just occasional cell towers. That makes a huge difference when the consumer uptake at the beginning will be sparse, and will grow over time. Many things make installing the copper wires problematic, including political instability, lack of property rights (whose permission do you need in order to put up a line of phone poles or to dig a trench?), spotty infrastructure (roads, for instance) as well as the overall expense.

Norm commented on the possible applications for micro-currencies (think DSR) based on the fact that the phones have the ability to transfer prepaid air minutes phone-to-phone. But what I saw was a rapid ramp on person to person commerce that can grease the wheels to growing trade at the grass roots level. For many years, I have been contributing to Trickle Up, a charity (like Grameen Bank) that makes microfinance loans to the poorest of the poor all over the world. The promise of these organizations is that they give people a chance to start a business, which gives them money to send their children to school, or patronize other tiny local businesses, which ought to be able to kick a tiny local economy in may places.

The NYT article mentions one particular case where access to cell phones improves the prospects for very small scale entrepreneurs: fishermen who are able to choose the best market for their catch before heading to a particular port. It's easy to imagine that coordination on that scale: choosing markets, deciding what to harvest or when, taking orders for build-to-suit could help many small businesses to run more efficiently, which would make it more attractive to operate a business, and could inject more money into a local economy, providing an opportunity for organic local growth.

According to the article, cell phone use is exploding even more than the (presumably optimistic) providers' projections indicated. They calibrated their estimates according to official GDP numbers, not realizing that cell phones would make an even bigger difference in the heretofore informal economy, which the official numbers don't include.

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