Capital Flows

Capital Flows

There is a lot of fear in the United States that China will upend US economic systems and that we will find ourselves in a global order defined by the Chinese Communist State. A portion of this fear has to do with the fact that the Chinese government doesn’t protect the same rights that our Constitution upholds, and Americans have a very sensitive view toward their constitutional rights and freedoms. While I often do think the rhetoric is overblown and xenophobic, I think it is fair to be concerned about the Chinese surveillance state, whether China adheres to Western ideas of human rights, and whether China is willing to uphold the rule of law.
 
 
But Yuval Noah Harari might argue that we don’t have to be too worried about the Chinese state. Harari may look back in history and suggest that we really don’t need to fear states like Russia and China that don’t uphold the rule of law or protect private property in a fair and equitable way. In his book Sapiens, Harari presents historical examples of global capital flows to argue that dictatorial states are less trustworthy in global economic systems and ultimately lose economic respect and credibility, hurting the governments and making them weaker. Harari writes, “capital trickles away from dictatorial states that fail to defend private individuals and their property. Instead, it flows into states upholding the rule of law and private property.”
 
 
Capital flows are important because they can shape a country’s political influence, living standards, political stability, and population wide prosperity. A country that fails to uphold the rule of law, fails to protect private property, and is a threat to the lives and liberties of its people is a country that will not attract investment, Harari’s argument would suggest.
 
 
China is a big and scary country, but if China cannot demonstrate to companies and corporations that it will protect intellectual property, that it will protect individual liberties, and that it will uphold international rules of law, then capital flows will ultimately be reduced and directed elsewhere. This was seen recently when the Women’s Tennis Association severed tied with China after a female tennis player accused a high ranking male member of the Chines Communist Party with sexual assault and then disappeared. Capital flows away from demagoguery and dictatorships to more safe and secure locations, where risk is reduced and where there is a greater guarantee of liberty and freedom of person and property. Personally, I hope that Harari’s theory holds true, and that any countries on the rise adopt better governance systems to improve rule of law, personal liberties for their people, and and to adhere to human rights.
A Quick Historical Glance at Physical Dominance in Cultural Evolution

A Historical Glance at Physical Dominance In Cultural Evolution

How do you defeat an empire? What is necessary for one culture to outcompete another? How does one group of people come to dominate another? I think it is fair to say that throughout history, the important factors for empires and cultures in their quest for domination and influence has changed. At different times through the course of human existence, different traits and characteristics have been more or less advantageous, and it is hard to predict exactly what traits and characteristics of empires and cultures are the most important for success at a given time.
 
 
It is likely that in the earliest possible days of Homo sapiens, physical strength and group cohesion were the most important factors for survival. At least, it can look that way as we look back in human history and try to understand where modern impulses for tribalism and paternalism originated in our species. If we all lived in groups of 12 to 25 individuals, the groups with the strongest males who could fight off other apes and other human bands for protection, and steal their resources while they were at it, likely had better chances of survival. If your group couldn’t survive a raid or a few rabid animals, then your chances of continuing on were slim. As a result more aggressive tribes organized around a single powerful figure probably had an advantage.
 
 
But the world that Homo sapiens inhabited changed, and the social structures and organizations of the species changed as well. The environment favored larger groups of human beings living and cooperating together. With more humans in a collective society, new traits became more important than pure physical dominance. As technologies changed, such as agriculture, fencing, and other innovates that made living in a set place safer and more secure, being the most aggressive and toughest human group was less advantageous for survival.
 
 
This process was slow and took place over a very long time. Physical dominance continued to play a crucial role, but slowly faded. By the time Christopher Columbus was ready to sail, merchants and bankers were beginning to be more important than physically impressive armies and rulers. Yuval Noah Harari writes, “the empires built by bankers and merchants in frock coats and top hats defeated the empires built by kings and noblemen in gold clothes and shining armor.” The incentives had changed. Using financial resources wisely, making investments that could pay off in greater returns, and developing economies became more important than conquest and war through physical dominance. Economic competition displaced physical competition.
 
 
Today we are in a world that is being characterized as feminine. Often, when this framing is applied to changes in the world it seems to have an implicit negative quality to it. But in truth, we are simply responding to continued changes in technology and civilization. Physical dominance is continuing to fall in its importance to how we live and cooperate together. Many bemoan this decline in the importance of physical dominance and character traits traditionally characterized as masculine. But the reality is that cooperation, services, working in cross-functional groups and teams, is becoming more important than in the past. This means there are different incentives which don’t always align well with traditional masculinity. I don’t think it is something to bemoan, and I don’t think we need to mourn the loss of the manly-man in human cultures. Empires were once displaced by businessmen in frock coats, and today we are seeing a similar process play out.
Scientists Foot The Bill - Joe Abittan - Yuval Noah Harari Sapiens

Scientists Foot the Bill

I haven’t been good at keeping up with the show, but one of my favorite podcasts over the last few years has been The Don’t Panic Geocast. The final segment of each show is a segment called Fun Paper Friday where the hosts discuss an unusual research study that they came across. The hosts are geologists, but they search the web and accept listener submissions for papers that are unusual in terms of what they study, the conclusions they reach, or have some sort of fun and interesting findings. I once submitted a paper that they reviewed which demonstrated that physicians who use bigger words are seen as less smart and less competent than physicians who use simpler vocabulary when talking to patients. But one of my favorite fun papers from the show, one I always seem to find a way to bring up in random conversations, has to do with blunt force trauma and beer bottles. A few years back a study was published in an emergency medicine journal which showed that more severe blunt force trauma could be inflicted by an empty beer bottle relative to a full beer bottle. The full bottle tended to shatter on impact, so while heavier, the force of the impact was dissipated in the shattering glass. An empty bottle is lighter, but less likely to shatter, meaning more force is transmitted to the body being struck by the bottle.
 
 
This study is funny, a bit morbid, and seems totally useless from the outside. It is easy to think, especially if you work a busy, demanding, and difficult job, that it was a waste of money for someone to take a bunch of beer bottles and hit a dead pig with them while measuring the force of the impact. “Someone seriously got paid to do that study?” is a common response I have gotten from telling people about this study or similar studies that might make their way to a Fun Paper Friday segment.
 
 
But the answer is yes, and the research was published in a respectable journal because there are actually important implications for fields of forensics and emergency medicine. The hosts jokingly remarked that the next time you are in a bar fight this paper will help you, but the reality is that it really might help someone better address a wound in an emergency room or better identify a murder weapon at a crime scene. The science was a little goofy, but that doesn’t mean it isn’t important. Additionally, the paper had some important structural mechanics and fluid dynamics considerations. How does a vessel react to an impact when it is full of fluid versus when it is empty is an important consideration in shipping industries, whether we are shipping soda, gasoline, or water on a space shuttle. 
 
 
Science funding, even for science that is funny and a little strange, is very important because it is science, with a foundation in basic research, which has fueled the advances in human living standards over time. In his book Sapiens, Yuval Noah Harari writes, “banks and governments print money, but ultimately, it is the scientists who foot the bill.”
 
 
Sometimes we know where the big scientific breakthroughs will come from. Anyone who was working on vaccines in the last two years knew their research was vital for human lives across the globe. Anyone working in lithium battery technology is aware that their research is going to be very important for our future. But there is a lot of science that is crucially important that we don’t recognize as important as it is. It isn’t obvious how the person researching a fungus in the Amazon could have a major impact on the world, but perhaps a discovery about that fungus could lead to new antibiotics or new mechanisms for developing vaccines. It is not clear how someone researching fluid dynamics in kitchen sponges is really going to make a difference in the world, but perhaps their findings unlock something that contributes to the design and development of ion channels in lithium batteries. 
 
 
Basic research can seem funny, but it sets a general foundation for the important work that goes into our breakthrough advances. And it is the breakthrough advances which change the world, allow us to communicate faster, improve our living standards, and allow us to do more with fewer resources. Scientists push the world ahead, footing the bill for the governments, bankers, and economies of the world. 
Where is Capitalism Today?

Where is Capitalism Today

“Capitalism began as a theory about how the economy functions,” writes Yuval Noah Harari in his book Sapiens, but today, capitalism is more than just an economic theory. “Capitalism gradually became far more than just an economic doctrine,” writes Harari, “it now encompasses an ethic – a set of teachings about how people should behave, educate their children, and even think.”
 
 
Capitalism is the basic framing through which most of us live our lives. If you live in the United States you probably get bombarded with advertisements all day long. Those advertisements are a product of capitalism (a message to get you to purchase more things and use your capital) and also reflect the general nature of the capitalistic system we live within. We praise two parent families with children who purchase the newest things, have the most expensive stuff, and take the most exciting vacations. Everywhere you look you see advertisements featuring parents purchasing things and experiences to enrich the lives of their children. You see messages about the things you could be if you spent your money on a new car, a new outfit, or traveled to a new place.
 
 
Underlying all of these messages is that the true way to exist within society is through purchases. Buy more, spend more, work more, all in service to the economy and our own consumption of materials and experiences. Those who work and produce are good, those who have lots of resources to spend and spend them freely are even better. A hermit, not working, not producing, and not spending money, is the worst thing you can be.
 
 
I think it is important to step back and recognize how many areas of our lives are influenced by something that started as a way to describe a set of economic principals. Major decisions, like where we should live or whether we should have children, are often influenced by ideals found within capitalism. In many ways, capitalism has become the end goal, and not just an economic theory. Many values have taken a back seat to consumption, or the appearance of consumption, and that can leave life feeling empty, cold, and somewhat vain.
Profits, Production, & Acquisitions

Profits, Production, & Acquisitions

I listened to the latest episode of The Readout Loud from Stat News yesterday, and the hosts of the show said that bio-tech companies have a huge amount of cash available as 2022 starts. The hosts stated that they are interested to see if any major acquisitions are announced by bio-tech companies at this year’s JP Morgan Chase Healthcare Conference.
 
 
This short discussion about mergers and acquisitions from the podcast came to mind when I re-read a short quote from Yuval Noah Harari on capitalism in his book Sapiens. Harari writes, “in the new capitalist creed, the first and most sacred commandment is: the profits of production must be reinvested in increasing production.”
 
 
Bio-tech companies, which range from major pharmaceutical companies to start-ups using artificial intelligence to better diagnose disease, seem to have a lot of money at their disposal (at least the major companies do). This suggests that companies have not been following Harari’s capitalist creed. Rather than reinvesting in their own production, companies are sitting on capital, waiting to purchase a smaller company. It is interesting to consider that major companies are expected, by journalists and shareholders, to use their money in this way. They are not expected to invest in their own research and development, but in an acquisition of a smaller company. As an example, the hosts quickly mentioned a few companies with blockbuster drugs that will soon be loosing their patent protections, meaning another manufacturer can begin making those medications. When that happens, the companies will need a new drug to bring to market to maintain profits. That new drug is expected to come from a smaller bio-tech company with a break through medication or treatment technology that could be absorbed by the larger existing pharmaceutical or bio-tech giant. 
 
 
In the capitalist system that Harari described, acquisitions doesn’t seem to fit with the idea that profits need to be reinvested to increase production. Following that model, companies wouldn’t sit on cash produced by patent protected drugs until they could acquire a new company. Instead, they would continually put their profits back into their own systems to increase productivity of their manufacturing process, supply chains, and their own drug development. Instead, what we see is cash and funding infused into smaller start-ups that can drive a particular technology or product to a point of success, and from there a larger company buys out the start-up, flushing the initial investors in the start-up with profits. This model seems to work fine, but it is distinctly different from the capitalist system that Harari describes, and which most of us probably think about when we consider what capitalism is.
Egoism is Altruism?

Egoism is Altruism?

In his book Sapiens, author Yuval Noah Harari reflects on Adam Smith and writes, “what Smith says is, in fact, that greed is good, and that by becoming richer I benefit everybody, not just myself. Egoism is altruism.”
 
 
This idea seems rather mean and like it can’t possible be correct when I first read it. When I pause for a second, there is a part of me that wants to be mad at economic and political systems and complain about corporate greed and how it operates with this mindset. But if I pause for even longer and pull myself back further, I see that this idea has even deeper roots than modern American economic and political thought.
 
 
The idea of egoism is altruism doesn’t seem too far off from the protestant ethic that has defined America since its inception. The idea is that we all need to be hard-working, avoid vice and excess, and be good people in order to be rewarded by a deity. By doing our individual part we will make the deity happy, and we will help each other and our communities. When we have a whole group of people who have made the deity happy, then we are going to receive some type of compounded reward which will play out at a societal level.
 
 
This protestant idea has been a driving force for hardworking Americans with our individualistic political system and capitalistic economy. We might dislike corporate greed and we might be able to find plenty of flaws where broken markets produce rents that hurt everyone. But the egoism is altruism idea which may incentivize such corporate greed extends beyond companies and rocket riding billionaires. It is at the heart of the expectations of American society. We are all expected to work hard and achieve high standards and results. Striving for our individual best, in whatever it is we are doing, doesn’t just help us, it helps everyone. At least that is the way that our political and economic systems operate and it is how we understand ourselves relative to others. The idea is beyond corporate greed and economics. It extends into nearly every aspect of our lives and culture.
Racism & Culturism: Beliefs in Western Superiority

Racism & Culturism: Beliefs in Western Superiority

I have spent a decent amount of time thinking about the racial disparities we see in American society. I think there is pretty clear evidence that we generally underrate the historical importance of blatant racism and discrimination in the outcomes of people’s lives today, and that has created substantial racial challenges that many people fail to acknowledge. Red-lining had a serious impact of people’s ability to build wealth through home ownership. Andre Perry at Brookings has argued that black business to this day are still undervalued due to segregation, difficulties in accessing the best locations, and continuing implicit racism. Issues which seem like they belong in or only took place in the past still have influences that linger today.
 
 
Many people discount these historical factors and turn their argument toward the nebulous construction of “culture” when explaining racial disparities in the United States. This feels uncomfortably close to blatant racism to me, but is hard to argue against, especially with people who are smart and wise enough to avoid explicitly racist and discriminatory language. It is not hard to hide arguments that may be racist in nature behind a veil of cultural critiques. Yuval Noah Harari in his book Sapiens suggest that this has been an important aspect in the ideology of many Western societies. He writes,
 
 
“Racist theories enjoyed prominence and respectability for many generations, justifying the Western conquest of the world. Eventually, in the late twentieth century, just as the Western empires crumbled, racism became anathema among scientists and politicians alike. But the belief in Western superiority did not vanish. Instead, it took on new forms. Racism was replaced by culturism. Today’s elites usually justify superiority in terms of historical differences between cultures rather than biological differences between races. We no longer say it’s in their blood. We say it’s in their culture.”
 
 
I think that what is key to recognize is that both racism and culturism is used to explain and demonstrate the superiority of one group over another. That means both become a justification for discrimination and disparities. Racial discrimination and disparities are dismissed through a lens of culturism. After-all, we are accepting that black, brown, or other people could be just as good as white people (or whoever is in the majority) but they simply choose not to be as good for peculiar cultural reasons. Culturalism in this way seems to be a form of supercharged racism with a shield.
 
 
However, the result is the same. One group is celebrated over another with discrimination and disparities justified and even praised. Culture is a broad term, and it is hard to argue against. It is hard to see where modern cultures have roots in historical inequalities and discrimination. It is hard to understand why cultural practices that deviate from – or deliberately eschew – the dominant culture persist when you yourself are part of the dominant culture and have found success through such practices. It is easy to use culture as a shield for arguing that you and your group is better than another, even when your argument is essentially a lightly cloaked racist argument.
Challenges with the Scientific Process: Setting Priorities & Managing Conclusions

Challenges with the Scientific Process: Setting Priorities & Managing Conclusions

Science provides objective answers to questions about the world, but that doesn’t mean that science is an entirely objective enterprise. Science exists within a world dominated by human needs, biases, and prejudices which means that science can be impacted by the same political, discriminatory, and mistaken judgements and decisions that any other human activity can be overwhelmed by. In his book Sapiens, Yuval Noah Harari shows how this happens when it comes to selecting scientific research topics, setting the priorities of science, and when objective conclusions flow into the world where they can be used by less than respectable actors.
 
 
Harari writes, “science is unable to set its own priorities. It is also incapable of determining what to do with its discoveries.” Part of the reason why science cannot set its own priorities because science is expensive. Especially as we continue to make new discoveries, the subsequent steps require more time, energy, and resources. To discover the next quantum particle will require an even more impressive supercollider. To discover the next secret of the Amazon river will require taking new technology further up river. The cost grows, and individuals conducting research need to be able to convince those with resources to commit those resources to their particular interests. This means that science doesn’t unfold uniformly or in equal ways. As Harari puts it, “to channel limited resources we must answer questions such as what is more important and what is good? And these are not scientific questions.”
 
 
But even when good science is done, and even when accurate and objective measurements are obtained with reasonable conclusions drawn from those measurements, the impact of science can be unpredictable. Many scientific studies and results are obscure, with very few people outside a select expert community ever hearing about the results. But other conclusions can be taken out of their original context and can become part of the cultural zeitgeist. How studies and their conclusions are understood can get away from the researchers, and can be used to further specific political or economic goals, even if those goals really don’t have a real relationship to the original conclusion that was drawn. Harari demonstrates how this happened with scientific conclusions being merged with racist ideas about the inferiority of non-white people. He writes, “racist theories enjoyed prominence and respectability for many generations, justifying the Western conquest of the world.” Whether researchers were explicitly racist or not, their research was adopted by people who were, and used to justify unsavory political ends. The science became wrapped up in a political culture that wanted to justify discriminatory and prejudiced behaviors and attitudes.
 
 
This doesn’t only happen with racist ideas, though those ideas can be the most prominent and dangerous. Small scientific findings can be taken up by militaries, by corporations, and by media organizations which may use the research and findings in ways the authors could not have predicted. Research on technology that helps improve light detection could find its way into a guided missile, into mass surveillance systems, or onto the grocery store shelves to be used by advertisers. The science itself cannot control the way that results end up being used in the real world, and that can be problematic.
Science, Money, & Human Activities

Science, Money, & Human Activities

The world of science prides itself on objectivity. Our scientific measurements should be objective, free from bias, and repeatable by any person in any place. The conclusions of science should likewise be objective, clear, and understandable from the outside. We want science to be open, discussed, and the implications of results rigorously debated so that we can make new discoveries and develop new knowledge to help propel humanity forward.
 
 
“But science is not an enterprise that takes place on some superior moral or spiritual plane above the rest of human activity,” writes Yuval Noah Harari in his book Sapiens. Science may strive for objectivity and independence, but it still takes place in the human world and is conducted by humans. Additionally, “science is a very expensive affair … most scientific studies are funded because somebody believes they can help attain some political, economic, or religious goal,” continues Harari.
 
 
No matter how much objectivity and independence we try to imbue into science, human activities influence what, how, and when science is done. The first obstacle, as Harari notes, is money. Deciding to fund something always contains some sort of political decision. Whether we as individuals are looking to fund something, or whether a collective is looking to fund something, there is always a choice between how the final dollars could be used. Funding could be provided for science that helps develop a vaccine that predominantly impacts poor people in a country far away. Funding could be provided for a scientific instrument that could help address climate change. Or funding could be used to make a really cool laser that doesn’t have any immediate and obvious uses, but which would be really cool. Depending on political. goals, individual donor desires, and a host of other factors, different science could be funded and conducted. The cost of science means that it will always in some ways be tied to human desires, which means biases will always creep into the equation.
 
 
It is important to note that science is built with certain elements to buffer the research, results, findings, and conclusions from bias. Peer review for example limits the publication of studies that are not done in good faith or that make invalid conclusions. But still, science takes place in society and culture and is conducted by humans. What those individual humans chose to study and how they understand the world will influence the ways in which they choose and design studies. This means that bias will still creep into science, in terms of determining what to study and how it will be studied. Early material scientists working with plastics were enthusiastic about studies that developed new plastics with new uses, where today materials scientists may be more likely to study the harms of plastics and plastic waste. Both fields of research can produce new knowledge, but with very different consequences for the world stemming from different cultural biases from the human researchers.
 
 
This is not to say that science cannot be trusted and should not be supported by individuals and collectives. Science has improved living standards for humans across the globe and solved many human problems. We need to continue pushing forward with new science to continue to improve living standards, and possibly just to maintain existing living standards and expectations. Nevertheless, we do have to be honest and acknowledge that science does not exist in a magical space free from bias and other human fallacies.
Organization Over Technological Progress in Warfare

Organization Over Technological Progress in Warfare

“The obsession with military technology – from tanks, to atom bombs, to spy-flies – is a surprisingly recent phenomenon,” writes Yuval Noah Harari in his book Sapiens.
 
 
There is a scene in the first Iron Man film where a terrorist leader explains that Genghis Kahn was able to dominant huge regions and many people’s through the superior technology of the bow and arrow. The story that the terrorist leader tells seems obvious to us. An army with a better technology easily overpowered opposing armies with less powerful warfare technologies. The Iron Man character is a literal personification of this idea. However, that story may not be accurate, and the way we think about historical wars may overemphasize the role of technological developments in weapons of war.
 
 
Harari argues that our technological progress, our introduction of new ways to blow things up, spy on our enemies, and dominate a war, only dates back a few centuries at the most. Today we imagine that global armies and militaries have the most advanced technologies possible (and use military technology to explain phenomena we otherwise cannot), but that doesn’t mean we should apply that same framing to past human conflicts. We look at the incredible power that military technology has today and assume it always been the most advanced area of technological development. We assume that new technologies always lead to more battlefield dominance. However, this is a misappropriation of modern warfare technologies and techniques to the past.
 
 
Harari continues, “up to the nineteenth century, the vast majority of military revolutions were the product of organizational rather than technological changes.” Better ways to organize troops, to manage supply chains and information, and to command groups of people have been more important in war, Harari argues, than the things that armies used to kill each other. Our fascination with technological innovation leaves out the importance of better human organization, which ultimately may be the bigger factor.
 
 
I don’t think Harari needed to limit himself to time periods before the nineteenth century when suggesting that human organization outperformed technological improvements in warfare success rates. The Germans lost WWII in part because they were fighting a war with two fronts, and in part because they pushed into Russia during the winter time, and were limited by simple logistical challenges. Many have argued that the Japanese would have lost to the United States in a US ground invasion during the winter if we had not used nuclear weapons on Hiroshima and Nagasaki. Superior technology doesn’t mean anything if you don’t have the organizational capabilities to have that technology at the right place at the right time. Perhaps drones and nuclear weapons change this, but I think that strong organization still matters in determining whether those unsurpassable technologies are used in a reasonable and effective manner, though hopefully nuclear weapons will never again be needed in combat. At the end of the day, we like the flashy new tech, but what really drives progress may truly be improved organization – a lesson we can all think about in our daily non-warfare lives.