Author: George Papaioannou

Wealth is a source of fascination and a magnet of human attention and endeavor.  It motivates people to work hard and achieve; live extravagant lives; wield power; impress with monumental projects; and leave behind outsized legacies.  But it comes with its own dark sides. 

The big picture about wealth in our days is this: never before humanity as a whole had so much wealth; despite the purported democratic nature of free markets, wealth is extremely concentrated in the hands of a tiny fraction of people; and despite more wealth, people in many countries, including the US, report that they are less happy than before.

So, thinking about wealth can be as fascinating as the subject itself.  Here are some questions I find interesting along with my short answers, leaving more elaboration to the reader’s curiosity and possibly future blog posts. 

How did wealth enter human history?  I suppose this happened when humans transitioned from an immediate return economy to a delayed return economy, that is, when the agricultural economy supplanted the hunter-gatherer and pastoralists economies.  Hunter-gatherers had to immediately consume the food they collected or at most rely on frozen leftovers in north climates.  Agriculture instead required to sow first and then wait to harvest and consume.  Food production required the use of physical capital (land, tools, and storage facilities) all of these being the early forms of wealth. 

How does its present composition differ from the past?  Not too long ago, most of the wealth was composed of tangible assets (land, buildings, machinery) and money, and long before that of tangible assets only.  Today the bulk of wealth (especially of very rich people) consists of ownership rights on intangible assets, that is, financial paper, like savings accounts, bonds and stocks.*  The funny thing is that the value of financial assets is itself mostly represented by the value of intangibles, like the future earnings streams and growth opportunities of the underlying businesses rather than the value of physical assets in place.  The value of future growth opportunities, in particular, is extremely vulnerable to political, social and economic disturbances.  This is important.  The very wealthy people and states of the world have a big stake in global stability and avoidance of war.

Why is so much more wealth created today?  Two words: globalization and technology.  Globalization expanded markets and revenues.  Contrast Facebook operating only in the 330 million people US market to Facebook operating in the 7.5 billion people global market.  Technology also has expanded markets and revenues.  Almost a century ago, a soccer or football match had a market equal to the capacity of a stadium; now, thanks to the radio, TV and internet, their market is global.  The result: super rich athletes.  It’s all a matter of scaling up.  If college professors could teach a class to millions of students their salaries would compete with those of news anchormen and anchorwomen.

Is extreme wealth concentration in society’s interest?  It depends on how wealth is created and how it is used.  If it is built on the pricing power of corporate monopolies and oligopolies, favorable taxation, political power, and depressed wages, then it is harmful to society.**  If it is built on an overt or covert class system that favors the offsprings of the wealthy through unrestrained inheritance rights or other exclusive privileges, then it is also harmful to society.  In short, wealth built on unfair distribution of economic output and opportunities undermines social trust and the citizens’ sense of justice and leads to degradation of solidarity and cooperation.  Worse, however, than concentration of wealth is the stability in the ranks of the wealthy.  Intergenerational perpetuation of riches amounts to having a plutocratic aristocracy.  It is very doubtful the interests of this class align with those outside.  The wealthy can rely on private wealth to buy good education, health and other services whereas the rest of the people rely on public services.  Thus, public priorities and tax uses are not aligned between the two groups.  In the words of economists Acemoglu and Robinson, societies decline when narrow elites organize society to their ends.  

Does wealth make us happy?  Not necessarily.  The Easterlin paradox (named after economist Richard Easterlin) shows that across time it is relative not absolute wealth changes that matter for one’s satisfaction.  (Interestingly, the importance of relative versus absolute reward has been found in experiments involving primates and monkeys.)  Therefore, a higher GDP can leave a lot of people unhappy if their relative standing worsens.  Indeed, despite more than a tripling of the real per capita income between the 1950s and 2010s Americans do not report that they are any happier.  Surveys taken during the pandemic period show that 53% of Americans agreed that wealth gave them piece of mind in 2021 down from 65% in 2018.  Americans also felt financially happy with less wealth during the pandemic than before.  All in all, making wealth creation a goal without paying attention to its distribution and overall context of circumstances is a misplaced public policy.

Why aren’t we always resentful against very wealthy people?  When we feel that wealth is the product of effort (work) and merit (skills, talent) we accept wealth as a fair outcome.  In the opposite case, we feel resentment, especially when wealth and pervasive poverty coexist.  This goes back again to our natural sentiment of justice, that is, reward must be commensurate to effort.  This sentiment cuts though both ways.  It can trigger resentment against wealthier people but also against poorer people whom we perceive to get more than they deserve.  A large segment of working class Americans seem to be more resentful of poor than wealthy people.  This reflects the above the global average weight Americans place on merit and effort as factors of financial success.  As a result, many Americans resent social programs that increase the spending power of disadvantaged people.  This perceived link of effort to success is a serious impediment to enacting more egalitarian policies in the US.

To make wealth creation compatible with a good society, how it is created and how it is used are among the critical policy questions we must address.

* As of the first quarter of 2020, households and non-profits held $42.65 trillion worth of physical assets and $104.77 trillion worth of financial assets. (Federal Reserve, 2021)

** According to a study, between 1952 and 1988, 100% of the growth of stock values was attributed to overall economic growth whereas between 1989 and 2017 only 24% of stock appreciation came from economic growth.  That leaves monopoly profits, lower taxes, and lower wages as the main suspects for the remainder value growth.

Human civilizations have established a lot of institutions to serve economic, social, cultural, and religious needs.  Very often though the institution and its workings become more important than the objectives they are supposed to meet.  Thus, maintaining the purity of the rules of the institution takes precedent over how well it serves the people.

Take, for example, the institution of the market economy.  Markets have preceded capitalism but they are at the heart of the capitalist system.  The importance of markets in capitalism is so elevated that whole sectors (involving technology, law and regulation) are dedicated to designing new markets and making them more efficient in regards to speed and ease of execution and being capable of producing the best prices possible for buyers and sellers.

Today, an intricate web of markets covers the globe and makes it possible for everyone to participate in markets no matter how far away they are.  However, behind the glitter and sophistication of the market-world, the fundamental prerequisite of the market economy is inescapable: to participate in a market you have to pay.  Which means markets may not be affordable to all.  Or put differently, not all goods are affordable to all.  So what?  Should we care that not everybody can buy a luxury car? Or a vacation in Riviera or Santorini?  Not at all.

What about though of more basic needs?  Like food, shelter and health care that sustain us?  Like education that builds skills and knowledge and make us productive?  Like child day care and parental leave that help us keep jobs or balance work and life?  Until a century or so ago, societies did not seem to worry a lot if the market system failed to cover even the most basic needs of any number of people.  This task was left to churches, community organizations, and philanthropists.  Eventually, however, we invented the modern welfare state, with Scandinavian countries showing the way.  In America, Roosevelt’s New Deal and Johnson’s Great Society introduced and expanded, respectively, welfare programs to address basic needs associated with retirement, elderly health care, disabilities, early education and poverty.  These programs were not free of controversy.  They were resisted as socialist and conditioning people toward laziness and free loading. 

As I have written in previous posts, Americans are more likely than other peer societies to believe that success is the result of personal merit and effort.  Safety nets are distrusted for fear they create disincentives to work.  And strong feelings of ownership, that is, what is mine is for me alone to decide how to dispose of, establish strong sentiments against taxes and redistributive policies.  Therefore, we should not be surprised why the current Biden plan to expand state support for various services, though popular in general, is opposed by die hard conservatives.

So, how do we reason about the opposite views on these issues?  First, we should disabuse ourselves of the notion that people are innately lazy and inclined to take advantage of free services to work less.  Economic research shows that extrinsic incentives or disincentives (like a less or more generous safety net) don’t necessarily affect the supply of work.  Intrinsic incentives, like personal pride and concerns about one’s reputation, are often stronger motivators for doing the right thing.   Second, merit and effort do not pay well in a lot of jobs.  The unequal distribution of productivity gains and economic growth over the past fifty years has left many Americans behind no matter how hard they strive.  Third, why do we have the highest rates of drug overdose deaths and suicides in the developed world?  Why do we have higher morbidity rates and subpar health statistics, including life expectancy and infant mortality?  Why do we have higher poverty rates than other advanced economies?  Why don’t we excel in graduation rates and educational attainment?

There is a common thread that runs through all these ailments.  The average American cannot afford to have the kind of healthcare, education, work fulfillment, and balance of work and life that make a society satisfied with itself.  In other words, and despite the achievements of our aggregate economy, a large segment of the American population cannot afford the markets that buy good health, education, and quality of life.  So, what does a good society do?  Turn its back and accept the verdict of the market doctrine “you pay to play?”  I would hope this is not the way we want to address these challenges.

In my view there are two solutions to our problem.  One is to ensure that personal incomes rise to a level that enable people to afford the markets that buy a reasonable overall quality of life.  Switzerland is such a country.  It does not have the extensive welfare system of the Nordic countries so taxes are lower.  But inequality is also lower and salaries are high enough for the Swiss to enjoy private markets for things that matter to their lives.  Other countries, like Germany and Denmark, also recognize that markets should be affordable to people.  In these and other advanced market economies the replacement of pre-unemployment income is significantly higher and lasts longer than in the US.  Similarly, unemployment benefits are a much higher percentage of median disposable income than in the US.  (OECD, 2020 data.)

The alternative solution is a system where state-funded programs help cover the basic needs of those who would otherwise be excluded from markets for essential services.  In this approach, the state steps in to provide or subsidize the goods and services that make people healthier, better educated, more productive and give them more balanced lives.  In short, to address the market affordability problem for essential needs, an economy should either generate high enough incomes across the board or dedicate higher tax revenues.

An often-heard exhortation, consistent with the market doctrine, is that worthy things are worth paying for.  That leaves it up to the individual to decide what is worthy to have and, thus, worthy to pay for.  It ignores, of course, that while something may be very worthy and essential, it is at the same time unaffordable.  A more enlightened and beneficial view would argue that it is also in the interest of a society to find what is worthy to it and pay for it. 

Good societies find ways to make certain critical markets affordable to their members.  Good societies care less about the purity of the market doctrine and more about serving the people. 

April 22, 2021 was Earth day.  On this occasion, President Biden summoned to a teleconference forty world leaders (read Earth’s greatest polluters) to opine about the damage we do to our planet and how to save it.  So, you would be inclined to think that humans really hold planet Earth to great regard and in the good old tradition of humans they have even set aside a day to celebrate their hospitable cosmic abode.  Of course, we know there is considerable gap between professed concern and real action.

The truth is that if it were not for environmental scientists and activists around the world, state governments would do very little in this regard.  The fact that scientists and activists have such a hard time to move the needle is the ingrained attitudes and beliefs most of us have, which dispose us toward mistrust and denial.  After all, as a species, we have had a pretty good life so far.   We have been taught to believe that Earth with its animals, plants and other resources is ours to enjoy as far as our desires and ingenuity, respectively, dictate and enable us.

At the same time, we need to acknowledge that taking real meaningful action to arrest, let alone reverse, environmental and climatic damage means to alter our lifestyles in dramatic ways, something for which we are not yet ready, either economically or culturally.  Opinion polls that show majorities of the public to be concerned about environment degradation and climate change do not readily translate to votes in favor of pro-environmental platforms.  This will happen when the public becomes educated enough about these matters so that there is a cultural transformation in societies around the world.

To effect this cultural transformation about the natural environment, we first need, in my opinion, to battle beliefs that have made us inured to understanding our responsibilities.  I will address a few I have identified through my own education on the topic.

The first, I will call “It’s Nature’s Way.”  This is the belief that the earth has gone through many environmental cycles and yet here we are still standing.  Since these cycles (prior to the modern one) occurred with no interference from humans, they must represent, the belief goes, a natural phenomenon and makes little sense to fight it.  This is false.  Currently, the atmosphere contains 410 CO₂ parts per million (with more ppm signifying warmer temperature). This metric stood at 600-1400 ppm about 50 million years ago.  Afterwards, the earth gradually cooled, as CO₂ fell to 400 ppm around 3.2 million years ago, and then to 280 ppm about 127,000 years ago, a CO₂ content that with very little variation lasted until the Industrial Revolution.*

Thus, the earth had entered a cooling period when our hominin branch appeared and it stabilized at around 280 CO₂ through our life as homo sapiens, until CO₂ started to climb the last two centuries.  The new era of warmer climate is one our species has not previously experienced over a long period of time and, therefore, we have no idea what it portends for us.  That is, it may not be our natural environment.

There is also another part in the “It’s Nature’s Way” belief.  This belief is based on the correct premise that nature is indifferent to how and which species survive.  From about 250 to 65 million years ago the dinosaurs ruled the earth.  They were ferocious eating machines that, among other things, they suppressed the evolution of mammals.  Following their extinction, there was an explosion of mammalian life, of which an offshoot is us.  Today, we are the dinosaurs.  We exterminate, suppress, and regulate the lives of other species.  There is though a huge difference between dinosaurs and modern humans.  We have the capacity to understand and evaluate the impact of our behavior on nature.  Unless we conclude that, by virtue of evolutionary forces, we are enslaved to behave with selfish indifference to the rest of nature, we have no morality-based excuse to act this way.  Privileged with the capacity for awareness and appraisal we should also consider other options than the selfish exploitation of our planet and its life. 

The other cultural belief that explains our attitude toward nature is “Humans Are Unique.”  Since ancient times, philosophies and religions have celebrated the human uniqueness in reasoning, emotions, and sentience (felt experience).  But this dichotomy between human and non-human has started to crumble under the overwhelming evidence that comes from animal studies.  What we have been learning is that humans lie on a continuum in regards to cognition, emotion and subjective experience that includes a lot of other animals.  Hints and traces of these started in early life and evolved with a greater footprint in more recent animals and finally to us. 

In the recent Oscar Awards, My Octopus Teacher won for best documentary feature.  It is the story of an octopus off the shore of South Africa that “befriends” a diver over the course of its remaining life.  It is one of many examples we have where we see demonstration of some human traits in other animals.  As Peter Godfrey-Smith (author of Metazoa: Animal Life and The Birth of the Mind) writes, what we now know about animals should compel us to give them some deserved consideration in how we treat them.  And one cannot walk away from reading Frans De Waal’s Mama’s Last Hug: Animal Emotions and What They Tell Us about Ourselves without feeling a deep appreciation and bond with our animal neighbors on planet earth.

So, if a warmer climate may be unnatural to us; if our reasoning capacities establish an ethical obligation to the planet; and if we start to know we are part, not outside, of the animal spectrum, then we need to move toward a culture that is friendly to life, biodiversity and co-existence.

When evolution gave us the large and complex brains that enabled us to move up a notch in the continuum of reason and emotions, that was a gift with strings.  It made us capable to feel, understand, and achieve a lot more than other living organisms; but it also gave us the capacity to sense our responsibilities to nature.  Whether we like it or not, evolution made us the Guardians of Earth.

 * From “The Dark Secrets of the Earth’s Deep Past, Peter Brannen, The Atlantic, March 2021.

WEIRD as used here does not refer to uncanny or strange people.  It refers instead to people who live in Western Educated Industrialized Rich Democratic countries. 

I first encountered the term WEIRD in Jonathan Haidt’s 2012 book The Righteous Mind: Why Good People Are Divided by Politics and Religion.”  As Haidt explains, to analyze how our minds work in forming ideas about politics and religion, he had to expand his Foundations of Morality Matrix beyond what would apply to people that lived in WEIRD countries.  He did so because an article published in 2010 had shown significant differences in moral attitudes between what its authors identified as WEIRD people and the rest of the world. 

Ten years later in 2020, Joseph Henrich (one of the article’s authors) published his own book The WEIRDEST People in the World in which he shows how people in WEIRD countries differ psychologically and culturally from non-WEIRD countries, how these cultural traits came about, and how they facilitated the institutions that emerged in modern western societies.  As with all macro studies of this genre, there is a risk of oversimplification and loose generalizations.  On the other hand, it offers some new perspectives on how the western world (underdeveloped and backward 1000 years ago) came to its modern form, including its market economies and rules-based institutions.  It also offers insights into contemporary American attitudes.

So, first, who are these WEIRD people?  According to the evidence in the book, they are found mostly in Christian countries, and in particular in Western Europe, North America, and Australia.  Their concentration increases within Protestant populations.  As we will see, the reason for this geographic particularity has its roots in practices adopted by Christian Churches.

Second, what traits distinguish WEIRD people?  Henrich presents a plethora of statistical results to isolate these traits.  WEIRD people tend to be highly individualistic, self-obsessed, control-oriented, nonconformists, and analytical.  WEIRD people focus primarily on their own attributes, accomplishments, and aspirations and less on their social roles.  Due to their mostly Christian upbringing, they are more likely to be moved by feelings of guilt than shame. 

In WEIRD societies there is an inflexible and more prejudiced extrapolation from character traits to behavioral outcomes, which is called dispositionalism.   For example, because I believe “he is lazy” explains to me why he is unemployed.  Dispositionalism comes with several psychological biases.  One of them is Cognitive Dissonance, which makes us uncomfortable with inconsistent beliefs, which we manage to reconcile with ex post rationalization.  Another one is Fundamental Attribution Error, that is, judging others depending on how we feel or think about them.

How did these traits come about?  Henrich argues that the primary factor was changes in marriage restrictions imposed by the Christian Churches.  Specifically, the Church sanctioned only monogamous marriages and prohibited marriages between relatives, like first and second cousins.  The result was the dismantling of family clans and life surrounded by one’s kin.  Young people were forced to seek spouses in other clans and move away.  To survive in unfamiliar social environments, medieval Europeans had to learn to live with strangers in a web of relationships that was unlike the kin-based arrangements they relied upon previously.  They had to develop relationships based on trust, rules and norms instead of kinship.  Where before interpersonal relationships based on kinship were sufficient to facilitate social arrangements and economic exchanges, now people had to rely on impersonal relationships.

The new impersonal social fabric had some important consequences.  First, it enabled communities to scale up to bigger towns and cities.   It also allowed markets to expand by relying on arms-length rules instead of kinship.  Holding one to his/her part of the bargain no longer relied on affinity and obligation toward one’s kin but on the need to comply with rules and norms that made cooperation mutually beneficial.  This was particularly important for the development of financial markets.  The financial literature presents strong evidence that financial markets had an earlier and faster growth in countries that were influenced by legal principles and cultural institutions that we mostly observe in Protestant-dominated countries.  Finally, societies that were now dominated by impersonal relationships had to develop political institutions that were based on the rule of law than on kinship-related power arrangements. 

In addition to marriage restrictions, individualism and self-reliance were boosted by the Protestant Reformation and the importance of self-salvation.  Literacy became necessary for seeking independent understanding of the holy scriptures.  This plus a reformist attitude further accentuated individualism and self-reliance.     

An important upshot of Henrich’s analysis is that by the time economic ideas and technology had become friendly to the emergence of capitalism, there were markets, built on trust and rules, able to accommodate trade well beyond the local level.  Having developed individualistic, self-reliant, and driven people, WEIRD societies also had the entrepreneurial capital to propel capitalism to prominence.

To the extent Henrich’s research is valid, we can draw some useful implications for our own contemporary world.  Some will credit Christianity as a positive force in the creation of modern institutions.  Others will see in the Christian practices that dismantled family clans and kin-based arrangements the erosion of socio-centric values and the ascendancy of hyper individualism.

An important lesson is that WEIRD countries should stop looking at other societies through their own lenses of individualism and arms-length ways of life.  The insistence on applying WEIRD attitudes to understand and judge the rest of the world is counterproductive and misguided.

Finally, the book helps us better understand today’s white American Evangelicals, arguably the most nonconformist and self-reliant of Christians.  Whether we agree or not with their individualism and their placing personal rights over social roles, Henrich’s book gives us a historical perspective that helps us understand where they come from.

When we look back at the pandemic experience, we will realize that one of the most unusual and radical policies enacted by governments was to pay people to stay out of work.  Whether by personal choice or public policy people had to separate themselves from lots of non-essential jobs that required physical interaction.  To support the livelihoods of these people governments chose to either subsidize wages, as in Europe, so workers would nominally continue to be employed, or extend unemployment benefits after they were laid off, as it happened in the US.  As a result, 2020 will arguably register as the year with the lowest number of working hours in recent memory.

So, the question is why did we need a severe health crisis to lessen the work burden?  Why don’t we proactively finance leisure and work holidays?  Why don’t we work less?  The answer is a long and interesting story that has to do with the unintended consequences of human “progress.” 

Let’s first look at some numbers about work.  (The data come from Our World In Data of Oxford University.)   It is estimated that around the year 1870 people in western countries (for which we have data), like Germany, France, the UK, Sweden and the US, worked more than 3000 hours annually on average.  By 2017, the number had fallen in all these countries, with Germany recording an average of 1370 hours and the US an average of 1750.  The reason the US ranks high in working hours among western economies is the low number of “paid time off” for vacation, holidays, sick, maternal and paternal leave.

We also know that working hours move in opposite direction relative to labor productivity.  As more goods are produced per working hour, people need to work less to produce the same or even more output.  The major factor behind this inverse relationship is, of course, technology which increases labor productivity.

Here are some data on changes in productivity and number of working hours between 1970 and 2017 from the same source.*  In the US, productivity increased by 117% and working hours fell by 12%; in Germany, productivity went up by 347% and working hours went down by 44%; in the UK, productivity rose by 166% and working hours declined by 27%.  Indeed, we see that productivity gains are associated with fewer hours of work per worker.  But we also see another important pattern.  The decline in work hours is relatively far smaller than the increase in productivity.  Why is this so?  I can think of two main culprits.  One is our desire to accumulate wealth and its unequal distribution.  Since 1970, the overwhelming gains from productivity improvement have gone to a miniscule fraction of the population, not only in the US, but also in other countries, including Nordic countries and China.  This forces the majority of people to work more to make ends meet.

The second and more insidious culprit is our growing number of wants or non-essential needs.  There is a name for this: “the malady of infinite aspirations.”  China fits this paradigm quite well.  Since 1970, productivity in China has risen by 517%!  But the number of working hours instead of falling, it has gone up by 10%.  I suppose that starting from a very low level of material goods, the Chinese had to work longer, despite their productivity gains, in order to close their aspirational gap with Westerners.

Given the strong work culture we observe around the world, one would expect that people like what they do.  Not true.  Gallup surveys in 155 countries conducted from 2014 to 2016 show that only 15% of workers feel to be engaged in their job.  Not only that.  Even in modern times, work exposes workers of all types of jobs to risks of physical and mental harm, to family, and social problems.  Some of that is self-inflicted due to workaholism, a diagnosable condition.  Most of the risks, however, are due to pressure from employers and exacting working conditions.  We have recently read about the tight working schedules of Amazon workers.

At the beginning of the 20^th century, Frederick Taylor founded scientific management to  promote industrial efficiency.  This turned the production process into automatic, codified small tasks to be followed with religious exactness by workers.  Thus, work was regimented.  But, in a telling sign of how humans “enslave” themselves, modern consumers do not simply desire ever more new products and services; they also demand cheaper and better-quality products, and faster delivery.  Under unrelenting consumer demand, companies succeed or fail depending on how well they meet consumer whims.  We have become, therefore, our own worst enemy in how we use work.  We have literally turn ourselves from masters of our work load and schedule to being serfs to our outsized wants and aggrandizing consumer experiences.

It was not always like this.  To turn again to our underappreciated ancestors, those scrappy hunter-gatherers, studies of still surviving indigenous communities show that they need to work only about 20 hours per week to cover their few basic needs.  (Being immune of our insatiable needs, that’s all they have to work for.)  The advent of farming, cities, division of labor, and delayed consumption (through wealth accumulation) raised the number of working hours far above those necessary for hunter-gatherers.  By the end of the 19^th century and after two industrial revolutions, the work burden had risen even further, including child labor.  Laws,  unionization, and technology eventually reduced the work burden, at least with respect to time, and that’s why we now have the lower numbers of working hours I cited above.

Still though, we have allowed work to become part of human nature.  We indoctrinate children with a glorified work ethic.  Many of us don’t know how to enjoy leisure time.  And many postpone retirement for fear of work withdrawal symptoms.  Paradoxically, even well-paid professionals overwork themselves.  Thus, most of modern human civilization and modus operandi revolves around our work responsibilities and schedules. 

The utopia of a post-work future thanks to technology will never come as long as our malady of infinite aspirations continues and intensifies and outpaces the relief from technology.  It is possible that eventually an all-encroaching work culture will alter our genetic predisposition to resemble that of bees and ants which are programmed for a life of incessant and steady work. 

Gaining control over our dependence on work may be a lot harder than we think.

* Productivity is measured in dollars adjusted for inflation and differences of purchasing power across countries.

The restrictions imposed due to the pandemic brought out some strong libertarian sentiments among, mostly, conservative Americans.  Statements like “It is my right to …. “ were heard a lot more often than before.  Individualism is an important component of libertarianism and we can suppose many of those who saw it to be their right to act as they preferred during the pandemic might have found an ideological cover under the banner of libertarianism.

Relatively recent polls show that libertarians may comprise between 10 and 20 percent of the American population.  The range is so wide because the public has a rather vague idea of what to be a libertarian means.  A 2014 Pew survey revealed that about a quarter of those identifying as libertarians had no idea what it means.  The result is a selective libertarian behavior. 

In the website of the libertarian Cato Institute, libertarianism stands for: individualism, individual rights, limited government, free markets and peace.  The organizing principle of libertarianism is that individuals acting out of their personal interests find a way to arrive at outcomes that are also good for the whole.  This would be a compelling recipe for social organization if it accorded with human nature and experience.  But it’s not, and that’s why libertarianism has been met with heavy criticism and little acceptance.

The libertarian movement, especially in its mistrust of authority, has, nonetheless, a noble history.  It came out of John Locke’s critic of the absolute authority of monarchs and Adam Smith’s ideas that the production and exchange of goods could be accomplished through the mechanism of markets without planning by a central governmental authority.  Others see in libertarianism the same unplanned (no designing authority) evolutionary process we see in the natural world, which would explain the libertarians’ sense that government interference is unnecessary if not harmful (see, for example, Matt Ridley’s Evolution of Everything). 

Pitting, however, the individual against organized authority misses the point that in its most basic functions, individual behavior is shaped and bounded by social forces.  That is, it is not the individual versus the authority, but rather the individual in relation to its social environment that matters.  Today we know that humans obtain many of the features that distinguish us from other species not by living in isolation but within social settings that help us survive, learn, and grow.  Humans survive thanks to innate altruism and cooperation.  Part of our social living is to limit the boundaries of our individual freedoms in the interest of the survival and prosperity of our social group. 

Adam Smith foresaw some of these modern insights when he proposed that individual behavior should be moderated by mutual sympathy and that people would be pleased to contribute to the happiness of others.  His market economy implied cooperation and working for each other rather than individuals acting as they please. 

The belief that individual autonomy can produce benevolent outcomes for all ignores the fact that very often individual and collective interests diverge.  It also ignores that individual actions can produce negative externalities, to use an economic term, that is, harmful consequences on others as well as on the social group.  To go, for example, around without a mask seems to be your right until you are reminded that you may infect somebody else or generate stress in others.  Now think of the consequences of a mask-less behavior.   Cautious people avoid venues frequented by mask-less people.  Social contacts diminish and ill will rises.  The result is gradual social disintegration.  Unless you value your right not to wear a mask more than the well-being of your social setting, why do it?

Next consider the libertarian adherence in unfettered capitalism and its corollaries: that markets do not fail and winners and losers are determined by individual effort and merit alone.   We know that both are wrong.  Markets can fail for various reasons, one of them being the presence of asymmetric information between market participants.  How, in the absence of laws, do you get ex ante protection against, say, the sale of dubious financial products or drugs?  The promise of long-term gain from maintaining a good reputation is often tramped by the allure of a quick profit.  In a recent New York Times article, Robert Frank (a retired professor from Cornell University) reminds us of another example of market failure.  To lower the risk of car injuries some consumers switch to larger cars, say, SUVs.  For a while they enjoy a lower risk advantage.  But then many more consumers switch to SUVs, thus restoring the previous level of risk.  While that risk remains the same, there are negative consequences on the climate, road maintenance and so on.  Clearly, individual-centric behavior has generated net costs for everybody.

Behavioral economics also suggests that many economic decisions are the product of cognitive biases than the virtue of rationality and it’s best for individuals to be nudged to act optimally.  For example, presented with both choices to opt-in or opt-out, many young people refuse to participate in retirement savings programs to their loss.  Making opt-in the default choice for all employees would better serve their interests. 

Nor is the role of government redundant in the modern economy.  Since the days of John Locke and Adam Smith, the world has become extremely more complex in terms of information, technology, institutions, and possibilities.  The issue is not whether government is big or small but rather whether it can efficiently or not empower individuals to navigate complex environments.   

For all these shortcomings, it is not surprising that libertarianism has failed to be the organizing principle of old or modern societies and states.  From the time of hunter-gatherers, to the farming economies and first cities, and later through the three modern industrial revolutions, people have organized themselves through a complex nexus of informal and formal relationships and rules that have harnessed excesses of individual freedoms and rights in order to serve the collective good. 

In the end, libertarianism is an aspirational ideology but unfortunately out of touch with what makes humans humane and societies better.

In a recent column in The New York Times Ross Douthat suggested that the Biden Administration take steps to restore America’s population reproduction rate to the replacement level.  This could be accomplished with sustainable economic expansion and job stability, and by lowering the cost of raising children.  But more critical in Mr. Douthat’s view is a return to a more traditional culture, one that used to favor child bearing. 

Besides the US, sub-replacement birth rates, and for different reasons, are also observed elsewhere, including Europe, Russia and Japan, whereas China has imposed it by design.  Although low birth rates are looked at as problematic or even undesirable, they have no easy solutions nor is a boost an unmitigated blessing. 

To start with, economic prosperity does not necessarily lead to higher birth rates.   In most regions of the world, birth rates have fallen in spite of improved economic conditions.  The causes are quite interesting.  First, the dramatic fall in infant mortality has made it less necessary for parents to have more children as an insurance against early death.  It has been estimated that in historical societies, like those of Greece, Rome, Pre-Columbian America, Medieval Japan and Imperial China, 25% of newborn babies died the first year.  Today this rate is down to 2.9%, with the greatest reduction achieved in less developed countries.

Second, the shift of huge numbers of people away from farming to other occupations has lessened the need to have plenty of hands in a family to support the agrarian economy.  Third, economic and social gains open up more opportunities for women to educate themselves and join the labor force, the result being later in life and fewer births.  With help from modern contraceptive methods, these trends have reduced the average family size, especially in the less developed world.   The number of children per woman has declined from 5.8 in 1800 to 2.5 in 2017, and is forecasted to fall to 1.9 by 2100.

It is very doubtful that the powerful effects of the above factors, and especially the one coming from the empowerment of women, can be neutralized by a cultural change that is friendlier to child bearing.  But even if such a cultural change were somewhat possible, we have to reckon with the collateral effects of higher birth rates on the earth’s ecosystem.

At present, the earth’s human population stands at 7.9 billion.  It is projected to grow to 9.7 billion in 2050 and about 11 billion in 2100.  For environmental sustainability the optimal human population is estimated to be between 1.5 and 2 billion people.  Considering only the common era, humans numbered around 200 million in 1 CE and 400 million in 1000 CE.  We grew to 1,000 million in 1800, 1,650 million in 1900, and 6,100 million in 2000.    All in all, it is estimated that about 100 billion humans have been born and died.

The numbers above show that despite the falling rates of births, each century has added and is predicted to add huge numbers of humans to planet earth.  Besides this explosion of human population, there are two other factors that impact our natural environment.  One is rising technological capacity that enables us to harvest ever more from nature.  The other is our growing appetite for overconsumption.  To sustain our increasing numbers and consumption needs, we are deforesting lands for mining, timber and farming; we are depleting the seas for seafood; and we are filling the atmosphere with carbon dioxide for manufacturing, transportation, and food production.  The warnings from scientists are many and dire.  But for reasons associated with religious beliefs, our natural instinct of procreation, and economic interests we seem to turn a deaf ear and avert our eyes from this reckoning.

The most potent explanation for ignoring the ecological consequences of population growth and overconsumption is that countries look at the issue from their own perspective.  Let’s concentrate for now on the economic argument.  Population growth is economically-speaking important because along with productivity it impacts economic growth.  An economy needs increasing numbers of workers and consumers to grow.  An economy also needs more young people in order to sustain the cost of its aging population, that is, the cost of health care and retirement income.  It is easy, therefore, to understand why each country individually is concerned with its population trend.  But what is good for each country separately can be harmful to all if a deteriorating ecosystem eventually puts all humans at risk.

So, we have a three-pronged conundrum.  First, as economic conditions improve birth rates fall.  Second, adherence to the goal of economic growth requires a replacement birth rate.  And third, rising human population and overconsumption depreciate the planet’s ecosystem and threaten our existence or way of life as we know it.  What gives?

Some will argue that new technologies will sustain us with less damage to the environment.  Others will argue that it is possible to use science and technology to restore any damage we inflict on the ecosystem.  What about stemming overconsumption?  Or returning to simpler modes of living that reduce the human footprint in nature?  All these are tough choices because they require global cooperation and huge cultural change.  The human record is barely encouraging in that respect.

What about rearranging the geography of global population by moving poor people to developed economies with declining populations?  Assuming for a moment we overcome anti-immigration attitudes, this may help individual countries but not the ecosystem.  For example, moving people from Africa to the US would turn users of an average 4,220 kWh of energy to users of 79,897 kWh as US residents.  Not so good for the environment.

Birth rates, population growth and ecological sustainability are intricately linked and have no easy answers.  In one of his lectures James Watson, discoverer of the DNA structure, was asked whether we will ever manage to extend human life to 150 years.  With a grin on his face, Watson replied “before we do that, we need to make sure our legs and brains keep going.”  In the same spirit, before we wish higher birth rates and population growth, we need to find ways to save our ecosystem from collapsing, because if that goes so will we.

The cold war I am referring to is the one brewing between the US and China.  From the American side it is tooted as the competition for economic (and not only) supremacy in the 21^st century.  From the title, you can guess that I am not in favor of waging this war.  It will be damaging to the world and it may not produce the results American policy makers expect.

The US won the previous cold war with the Soviet Union because, while maintaining military parity, the US enjoyed an unrivaled economic superiority.  China though is a whole different opponent.  China’s leaders have successfully combined Communist Party rule with the power of the markets to lift China out of poverty and turn it to an economic superpower.  Economic heft has also allowed China to raise its international profile and make up for past humiliations in the hands of foreign powers.  Achieving and maintaining economic well-being and significant presence in world affairs are the two-fold objectives of China’s nationalist policy.

But China wants to go beyond these legitimate goals.  It is China’s new ambitions that have sounded alarms in the US.  The Belt and Road Initiative (also known as One Belt, One Road) was announced in 2013.  It aims at investing economically, culturally and educationally in a long list of countries and connect China to the world economy as the Silk Road connected China to Europe in the late Middle Ages.  This initiative has already given China a non-trivial presence in the global supply chain of raw materials and transport.  Two years later in 2015, China announced the Made in China initiative that aims at making China self-sufficient in all critical high technologies and a leader in Artificial Intelligence by 2025.  It is exactly the potential of losing not only superiority but also independence in cybertechnology (including AI) that defines the new cold war from an American standpoint.

So, how has America done in the years that China was turbocharging its economic growth following its admission to the WTO in 2001?  Not very well.  This twenty-year period exposed America to the risks of its capitalist model and its unsettled racial, social and political divisions.  The list is sobering: Corporate scandals spearheaded by Enron and WorldCom; collapse of the housing market and near-failure of the financial system; intense polarization leading to the Trump presidency and the questioning of democratic institutions, including the integrity of elections. 

The fall-out has been dramatic and consequential.  It includes the deindustrialization of the Rust Belt, the loss of well-paying manufacturing jobs, the decline of towns and communities, the “deaths of despair” from opioids, the squeezing of the middle class, and the exacerbation of income and wealth inequities.  The pandemic provided further evidence of the devastating consequences of unequal health care and job security in America.    

Even before the 1990s, it was America that from a position of strength had evangelized a liberal international economic order to the world.  We now realize that this policy was not well-thought out.  The paradigm of achieving aggregate GDP growth and then expecting firms and workers to adjust to the evolving realities proved to be overrated.  Big firms were able to move abroad to exploit reservoirs of cheap labor but their laid off workers were left without support for retooling and reentering new jobs that paid as well as those lost.  The low unemployment rates of recent years fail to reveal the paucity of good jobs for blue-color workers.    

Workers were not the only piece of the economy affected by globalization.  The productive side of the country was also affected by the new geography of manufacturing sectors.  In a globalized market, each firm is interested in securing its production factors from the lowest-cost producers.  Minding the national or the geopolitical interests of the home country is not necessarily high in firm strategy.  A free global market is non-threatening as long as there are no nationalist agendas.  US administrations and politicians now realize that China’s nationalist economic agenda threatens the American national interests.  The mistrust is fueled by fears that China may use its cybertechnology industries to acquire access to information and manipulated it in order to further the interests of its centralize communist political system.  Such capabilities can become even more worrisome if coupled with mastery of Artificial Intelligence. 

Thus, to counter China’s inroads into these high-tech sectors, American policy makers are coming around to two important compromises.  They are retreating from their internationalism and are embracing what has sounded like an anathema, that is, industrial policy.   Both compromises though pose serious challenges.  Adopting an industrial policy carries the risk of institutionalizing crony capitalism by extending political favoritism to well-connected firms.  To ensure that an industrial policy serves legitimate national interests requires that the American political system accepts and learns to run joint projects between the state and the private sector.   Given the inordinate influence money can buy in America, adopting an industrial policy that truly serves the national interest may prove to be too high a mountain to scale.  

Forcing American firms to repatriate their operations will put pressure on them to contain the higher labor costs either through robotic technology or by suppressing wages or workers’ rights, like the right to form unions.  If so, the scarcity of good jobs for blue-color workers is likely to persist.  With the prospect of sanctions and counter-sanctions much is also at stake for the global American businesses in social media and banking, which will, therefore, be unwilling to countenance to a retreat from lucrative foreign markets.  That’s an additional challenge to policy makers in government and Congress.

Even if the American retreat from globalization comes to pass it is unlikely it will hinder China’s economic advancement.  In the next several decades, population growth in regions, like Africa, will be much higher than in the developed world.  And PriceWaterhouseCooper forecasts that between now and 2050 emerging economies will grow at twice the rate of developed economies.  These trends present China ample opportunities to grow without full commercial ties to America or Europe.   And it is doubtful to what extent Europe will damage its own interests in the huge Chinese market out of solidarity with the US.   

For all the above arguments America’s best approach may be one of competition with proper respect for vital national interests without resorting to fruitless and damaging antagonism.  The remarkable story of America and China is that two superpowers have established a rare interdependence built on the common ground of commerce.  It is in their mutual benefit to work out their national interests without sliding into a damaging cold war.  

If an accidental visitor (let’s use the name Siya*) to planet earth took a good tour of the globe would easily come to the conclusion that the planet had been made to serve only its human species. 

A quick search would have shown that there are over 7 billion humans living in practically every corner of the planet; that they are surrounded by billions of domestic animals that provide companionship or food; that this trio of mammalian mass (of which 36% is human) comprises 96 percent of the total mammalian biomass, with wildlife mammals making up the remainder four percent.  Our visitor’s best chance to see some of this scant wild life would be a visit to a zoo rather than an excursion to the wild.

And not to forget our feathered friends, Siya would find that domesticated fowl, like chicken, turkeys, ducks, outnumber wild birds by a factor of three.  By one estimate, humans consume over 50 billion chicken, 1.5 billion pigs, 500 million sheep and 300 million cattle each year.

If Siya’s assignment of reporting back home included a historical account of how humans became the masters of planet earth, our space traveler would be astonished to discover that things did not start that way nor did humans ruled the planet for hundreds of thousands of years.

First, Siya would learn that homo sapiens was the only lucky variety of hominids to survive on earth with a smitten of Neanderthal and Denisovan DNA.  Once homo sapiens secured their place on earth, they set out to inhabit the planet with devastating results for all other species.  Siya would learn the extinction came in three waves.**  The first wave started some tens of thousands of years before the agricultural revolution.  The second wave came with farming (about 11000 years ago) and the third with the industrial revolution.  Each wave was more consequential than the previous one as it wiped out more animal species, brought others closer to total annihilation or to the point of no return. 

As long as homo sapiens developed mostly biologically just like the rest of the animal world the ecological balance was kept in a fair equilibrium.  Things changed though when homo sapiens passed the cognitive threshold that gave humans the ability to intervene in the natural environment, change it and design it to serve their interests.  Thus, every leap of cognitive and technological advancement of homo sapiens has resulted in further retrenchment of the fauna and flora of planet earth. 

How could we explain to Siya why humans separated their lot from that of nature?  Part of the explanation is that, unfortunately for the environment, human thought, secular or religious, was late in developing a nature-friendly ethical code.  Classical ethical philosophy as well as Western monotheistic religions were more preoccupied with morality among humans than human morality toward nature.***  We find more concern for nature in Eastern religions like Buddhism and Hinduism than in the Abrahamic faiths with their anthropocentric views.  Nature is also more revered in animism and paganism which attribute divine or spiritual powers and properties to nature (animals, rivers, oceans, celestial objects, etc.).  Indeed, we see this still reflected in the interaction of Indigenous people with nature.  A United Nations study has found that lands managed by Indigenous people have healthier ecosystems than lands conserved by governments.

We all have heard of Thomas Malthus and his prediction that the exponential population growth relative to the slower growth of food production would bring the destruction of human race.  Contrary to Malthus’s prediction, humans proved very smart and innovative in extracting from nature ever greater yields of food.  Malthus would have been closer to the mark had he theorized that the true danger to humans and their environment was not as much population growth as the “malady of infinite aspirations” as Emile Durkheim (the modern father of sociology) called the tendency to develop endless wants.  John Maynard Keynes would also later warn us of the dangers of aspirational wants.

Our visitor Siya would notice that humans are still driven by hubris about their ability to manage nature and an impervious sense of infinite expectations about the capacity of nature to sustain human life with abundance.   Siya would discover that humans count progress and keep a score card that only accounts for the satisfaction of their material needs irrespective of what happens to the rest of life on earth.  Many derive confidence from the belief that divine providence in the sustenance of humans will last forever because of some covenant struck between them and their God.  Others simply push aside all troubling thoughts of an ultimate catastrophe because they are unable to suppress their greed for material gratification.  And others simply don’t believe in the science of environment and climate.

But Siya would also notice something else.  That humans are not only selfish toward nature.  They are also selfish toward each other.  Siya would observe small numbers of humans living in superb luxury and gluttony and many living in appalling conditions.  So Siya would come to the sobering conclusion that the plunder of nature is not committed in the interest of all humanity but, to a great extent, for the pleasure of few.  And yet, when the earth’s ecosystem suffers all humanity pays the price whether rich or poor.  Actually, the poor pay the heavier price given the hierarchical order of affordability.  Let’s call this the negative externality of redundant wealth accumulation.

By the end of this trip around planet earth, Siya would read UN reports, government policy papers, scientific papers, newspaper editorials and op-ed columns.  One of such report from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services of the UN stresses the need for transformative changes in technological, economic and social factors if we are to arrest any further deterioration of the earth’s ecosystem.  Siya could promise to send us her assessment as soon as she had returned home.  Given though that Siya’s planet is 100 years away from earth, Siya would have said “I ‘m sorry, but till then you are on your own and don’t forget the clock is ticking.” 

* Since I have no idea how that foreign planet identifies a person as male or female, I chose to name my fictitious visitor Siya from the genderless pronoun siya used in Austronesian languages.

** The three waves are from Yuval Harari’s Sapiens.  Harari calls homo sapiens an ecological serial killer.

*** This gap between religion and human duty toward nature has been recognized the last thirty years and one outlet for those interested is The Yale Forum on Religion and Ecology.  

Sickness and death from Covid 19 were visited upon many, but a whole lot more of us were afflicted by boredom.  Whether rich or poor, young or old, living in the countryside or in a city we were left with empty holes of time in our lives, holes we could not fill with meaningful activities.  And most of us I bet cursed our boredom time and again and scornfully cast it in the heap of things we loathe.

But read more about boredom and you may start having a change of heart and mind.  The New York Times had an article about boredom during the pandemic, but it looked at it narrowly as the emotion that might have changed our consumption habits in temporary or even more permanent ways.  It so happened though that around this time I was reading a book about work by the anthropologist James Suzman,* and in its pages I discovered another perspective on boredom; a perspective that is more positive and informative.

To be sure, boredom can be the mother of some bad things.  It can drive people to alcohol or drug abuse, others to binge-eating, and others yet to binge-buying (look at Amazon’s sales).  Boredom as an emotional condition can be associated with chronic depression, or inability to pay attention to things we do, or a lack of capacity to find meaning in anything.  Boredom is leisure time that goes bad.  To be bored means to be self-aware and unfulfilled.  The 19^th century philosopher Arthur Schopenhauer considered boredom to be a reminder of the meaninglessness of human existence.  Wow!

For most of us, however, the boredom we have been feeling during the pandemic is the result of the lockdown that replaced hours of work, socialization, recreation, entertainment and traveling with hours of – should we say nothing?  Full of energy and desires but nothing to do and nowhere to go.  Just the state of affairs that fits Leo Tolstoy’s definition of boredom: The desire for desires.

To have desires we must be aware of things we can do.  We must have experienced pecuniary or other pleasurable activities we desire to pursue.  And this brings us to the interesting questions about boredom.  What happens, for example, if you have a singular goal in life and you achieve it?  I knew nothing about Timothy Kim, but looking for answers to this question I came across his case.  Timothy always wanted to be vastly rich.  At age 31 he became a billionaire with his platform TubofCash.com and then he confessed he was bored!  Who runs the higher risk for boredom, a rich or a poor person?  Rich people can satisfy a lot more desires than poor people.  Does that make them more prone to boredom than poor people?  Well, I suppose it depends on whether boredom is a relative or an absolute emotion.  If it is relative, rich people suffer worse because they are deprived of relatively more pleasures than poor people.  But if boredom is absolute then rich people suffer less because they can still do some things (like ordering food from good restaurants) not available to poor people.

Instead of comparing contemporary rich and poor people, let’s compare ourselves to our hunter-gatherer ancestors.  Contrary to the popular belief that hunter-gatherers were struggling every minute of their lives to secure food and stay alive, they actually managed to be well-fed and sheltered with no more than two hours of work a day.  Remarkably then they had a lot more leisure time in their hands than their descendants who had the misfortune to discover farming and millennia later the world of machines and the intense work culture the industrial revolution brought us. 

How did they spend those hours of leisure?  The anthropologists tell us, they sat around the camp fire, slowly learning the art of socializing, mediating frictions among clan members, finding some ways to entertain each other, and eventually developing the tool that would make these activities more communicative, that is, language.

With all this free time, they had to feel bored at some point.  But we can safely guess not as much as we do. Their lifestyle was simple and their basket of desires was really small and shallow.  Not only they were able to meet their material needs very reliably and plentifully, they also had no serious desires for social status to pursue.  Their egalitarian social structure made sure that those with the potential or intention to acquire a higher status were brought back into line through shaming.

Nonetheless, boredom must have been too much to some hunter-gatherers that it set their minds loose to explore ways to escape it.  One of these mind-wandering moments discovered artistic expression.  Representational art in primitive sculptural form appeared 70,000 to 90,000 years ago, and the first cave wall paintings about 35,000 years ago.  Even Homo Erectus, our ancestor of 600,000 to 800,000 years ago, took the time (because they had plenty of it!) to put some aesthetic finish in the stony tips of their spears that was not all that necessary to their effectiveness.  Thus, boredom brought out of leisure might have possibly been the impetus for the emergence of art and language.

The comparison of our lives to those of our foraging ancestors then suggests that the negative consequences and the intensity of boredom are another curse of our contemporary life-style and civilization.  Aware of the countless experiences and pleasures that are open to us and with our bottomless basket of desires, boredom becomes so much more salient and unbearable.

Back then, thousands of years ago, when time was in abundance and not the precious good it is today, boredom played its evolutionary role by giving our innate trait of curiosity an outlet to imagination, creativity and pursuit of meaning.  Eventually though, available free time and its offspring boredom conspired to push us into food producing methods and social structures that bonded us to work, generated novel experiences and gave us a world of desires from which it has become almost impossible to escape. 

Thus, that ancient boredom that gave us the innovations that took us beyond our basic desire to just stay alive with food and shelter is now responsible for all the discontent its modern version visits upon us today.

* James Suzman, Work: A History of How We Spend Our Time, 2020.